Every entrepreneur wants more money to start their business. Knowing how to raise startup money has been a secret art. Now there’s a great road map to seed funding thanks to a guy named Brendan Baker and a young-ish company called AppMakr.
But they had no idea how challenging it would be.
To reach their goal they contacted more than 170 people: angels, VC, intermediaries, and investor groups of every kind. More than 130 times, the guys heard “no”. Just 14 times in six months they got to a “yes”. (Take a look at these 3 slides. Click any graphic to enlarge… links to complete file follow later.)
If networking with 170 people sounds like a lot of work, it is. It’s easy to focus on the 134 “NOs” and forget that AppMakr actually did pretty well: 14 out of 170 is an 8% success rate. Yes, it took 6 months. But in the end they had $1 million to fund their dream.
Are you willing to work hard for 6 months for $1 million?
Before you jump in, here’s the pretty cool lessons that AppMakr learned. This is my synopsis but if you are headed toward fundraising, I encourage you to watch the full slide show, below!
- Give Groups Time: Seed funds made larger investments than individuals but took longer to decide. I guess that’s not surprising: there’s multiple people involved in the decision and seed funds need to be very careful with their money. The lesson: go early and be patient. It’s worth it.
- Pay Attention to Passion: AppMakr called the most influential people “SuperNodes”. These people not only wrote checks, but brought in other investors. The key to identifying them? Passion. If the investor gets excited about your deal, feed the passion.
- Get Personal: The biggest single lesson was to get face-to-face with investors. Investors they met in person pledged an average of $11,000… more than 4 times as much as people contacted by phone or email!
If these three lessons were all they learned, it would have been worth the 42 amazing slides in this presentation. But for my hard-core entrepreneur readers, there are at least 5 more lessons: Here’s Brendan Baker’s complete Anatomy of Seed presentation (or PDF) and other presentations from brendanbaker.
Dedicated to your (Seed Funded) Profits,
PS: 2020 Update: AppMakr has apparently discontinued operations. I guess that’s proof that even a great startup faces real challenges. If you’re looking for a good alternative for making apps, try https://appinstitute.com. According to their team, “AppInstitute is a mobile app builder that allows small businesses to create apps without writing a single line of code. Their drag-and-drop app maker features food, drink and product ordering functionalities, customer loyalty programs and the ability to send push notifications, among other features.”