Can You Outsource Startup Fundraising?

One thing I wanted to do at Kindara, and that I think is natural for CEO’s to want to do is to outsource fundraising.

After all, as a CEO I outsourced lots of things: Marketing, product, engineering, finance etc. But try as I might I could never manage to outsource fundraising.

I tried a few times: I had conversations with investment bankers who promised to introduce me to investors. I talked to fundraising consultants who said they would find investors in exchange for a finders fee. But none of these avenues ever proved fruitful.

And as I raised more rounds for Kindara I realized the reason: While these consultants and bankers might have connections, I realized pretty quickly that even if they introduced me to folks, every investor wanted to speak to me the CEO and decide whether to invest or not based on talking to me.

I realized that no matter how many people I hired to help with my fundraising, I was always going to be the bottleneck. The speed of the campaign and it’s success or failure were always going to come down to me.

Connections are great and they help, but the real meat of a fundraise is doing meetings and bringing everyone together to get a deal done. So when I realized this I decided I better get really good at fundraising.

Since I could outsource everything else in the business except fundraising, I decided and vowed to get really good at it. And ten years later I have the same perspective.

Unfortunately (for the many founders I speak with who want to outsource their raise) I’ve come to the conclusion that you can’t outsource fundraising. You can hire investment bankers or brokers or people with connections, and all these can help, but as the CEO you still need to get the deal done. You need to be committed with your time, your mind and your soul.

Sometimes in my conversations with founders I hear things like “How about if I give you 3.5% of my round to raise it for me?” When I hear this I know I’m i) talking to someone who hasn’t raised before and ii) I know it will never work.

Let me show you why: Even if (imagine for a second) I for some reason accepted this dubious proposition and found all the right investors for this person’t company, and told them how great the company and the CEO are. At the end of the day what’s the first thing each investor is going to ask?

“Sounds great, will you intro me to the CEO?”

And then the success of the raise will again come back to the CEO and how savvy and skilled they are at putting a round together. So unfortunately what I’ve learned is that you can’t outsource fundraising.

BUT I’ve also learned that you can practice it, learn about it, and get really good at it. Even if you weren’t born with natural skills in this area, you can learn the skills. Just like marketing, product, finance, HR, and sales, fundraising is a collection of learnable skills that can totally transform the trajectory of your company and your trajectory as a CEO and leader.

And if you do commit to learning the skills, you’ll have a super-power and the confidence of knowing you can go out and raise as much cash as you want for your current company or whatever project you take on next.

This is the whole idea behind Fundraising Mastery: I want to help create entrepreneurs who are total badasses at fundraising. Because you can’t outsource it, if you are a founder the only option is to not do it, or get really good at it. Those are your options.

We’d love to hear your thoughts, please reach out and tell us your stories about outsourcing your raise.

Sharing is caring:

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Group reaches towards the stage

How To Close Investors For Your Seed Round (Part 2)

In today’s post I’m going to address the final step of the 7 step process of doing super effective investor meetings: The final close. As a reminder the 7 step process is:

Step 1: Engage
Step 2: Build Rapport
Step 3: Qualify
Step 4: Enroll
Step 5: Handle Objections
Step 6: Test Close
Step 7: Close

Read More »

Get the Ebook: How to Meet & Close Angel Investors

Get the Ebook

Subscribe To Our Newsletter

We’re always sending out useful info for founders who are up to big stuff in the world.