Why Does Funding Begin with “Fun?”

I’ve always wondered why funding begins with fun.  Those three letters.  F.  U.  N.  Fun.   For entrepreneurs, seeking seed capital means meeting with numerous VC firms and sometimes dozens of angels… fun?  Telling the same pitch over and over again…  taking time away from more immediately impactful endeavors like recruiting and customer development…  the endless follow-ups and inevitable radio silence… fun?  And then there’s hearing “no” constantly – perhaps that’s why funding ends in “ding,” as it’s the repetitious sound of hearing reasons for why not, instead of why.

Maybe fundraising isn’t supposed to be fun, after all.  But that doesn’t mean it can’t be productive beyond obtaining the capital itself:

  1. Running a great fundraising process involves crafting real story and not just a pitch.  This end-result can take additional time to develop, but having completed it, it can be beneficial in more than dealing with just potential investors.  Having a crisp story about the vision behind a business can be leveraged multiple times with other constituents to effectively reach customers, partners, press, and even potential acquirers with the right communications message.
  2. Fundraising encompasses trial-by-fire circumstances which almost always necessitates professional development.   Unless Sales just runs in the blood, running a fundraising process will naturally hone those skills.  These soft-skills of persuasiveness undoubtedly make one a better leader.
  3. A process which is inherently about meeting people… provides an excuse to meet people. Fundraising is about evangelizing a vision.  Along the way there will be encounters where the story resonates in conjunction with a real personal connection.  Sometimes these people don’t become investors, but rather than quickly moving on, these people can be co-opted into useful allies to help in other ways.  Introductions to customers, long-term advisors, business development partners can result from the fundraising process, as those early conversations turn into real relationships.

Yes, often the best part of fundraising is the end of it.  That’s the fun part – getting back to spending 100% the time building a company.  But there can real benefits that come out of a fundraising process if you’re proactively seeking them as a by-product beyond just adding cash to the bank account.

David Beisel

David Beisel is a co-founder and Partner at NextView Ventures. He has been focused on early stage Internet startups his entire career, both as an entrepreneur and venture capitalist. As an investor in the digital media space, David was most recently a Vice President at Venrock and previously a Principal at Masthead Venture Partners. Prior to becoming a venture capitalist, David co-founded Sombasa Media, an e-mail marketing company best known for its flagship product BargainDog. Sombasa was successfully acquired by About.com where David served as Vice President of Marketing. David holds an MBA from the Stanford Graduate School of Business and an AB in Economics, magna cum laude and Phi Beta Kappa, from Duke University. He also founded and leads the Boston Innovators Group, an organization which holds quarterly entrepreneur events drawing a thousand attendees.

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