Are fundraising and sales the same?

Most founders who know how to sell naturally have a pretty good understanding of how to fundraise.

Of course there are differences between the two, but fundamentally, you have a business who wants money for their thing, and you have a person who may or may not give them money for their thing.

And in any situation like that, there are a few key factors that determine whether or not the person buys in.

So here are three things that are just as true in fundraising as they are in sales:

1. Trust trumps all

It doesn’t matter how good your product is OR how good of an investment your company is. If either an investor or a prospect questions if you’re telling the truth, it’s over.

2. Proof > promise

Even if someone trusts you, it’s hard for them to justify an investment that isn’t backed by data.

In sales, that’s case studies. With fundraising, that can be a number of things. It can be your history as an experienced founder, proof that customers want your product, or any proof that you’re willing to do difficult and/or unconventional things to make your business work.

3. Urgency & scarcity drive action

In sales, prospects will tell you they need to “think about it” for as long as you let them. VCs and angels are the same.

If they think there’s very little demand for your funding round and don’t believe you’re moving very fast, they’ll table your deal and prioritize the ones they’re scared of missing out on.


And possibly the biggest similarity: if the value of your product is bunk, the deal’s off.

If it doesn’t really drive value to the customer, customers obviously don’t want it. And if customers don’t want it, VCs don’t want to invest.

I wrote some tips to highlight your product’s value in your deck in one of my earlier newsletters here.

Good luck with your raise and watch out for next week’s email!

Best,

Nathan