10 Steps To Securing Your First 1 Million

Currently for every £1 invested, 88 pence goes to male only teams, ten pence to mixed teams and just 1 pence for all women-founder teams and if current trends sustain it is going to take 25 years for all women teams to even reach 10% of all deals made.

So, in light of the investment landscape gap, here Stack World Founder Sharmadean Reid breaks down her top ten tips for raising your first £1 million.

Step 1: Have A Thesis Or A Vision Of The Future

In the 10 steps to raising your first million dollars, the absolute first step is to have a thesis or vision of the future. We talk about this a lot at The Stack World, about vision setting, about really understanding your vision, mission, principles, doing your guide to working with me, all of this work.

Because what investors are really looking for is that you intellectually understand your market, your point of view on it and how you want to help shape it. So many people who come from an academic background will have a hypothesis, but they might not necessarily have a practical application in the real world.

The fun thing about being an entrepreneur is that you get the opportunity to do both. So start thinking about your vision for the future. I would recommend that you start a private blog for yourself as you are thinking. I did this for 18 months before I even started thinking about fundraising. I would write things like the way I see it is, the evolution of my industry is, so I laid out an industry from.

I also wrote out my company's beliefs: what we believe is, and we will be the company that… Remember to be concrete in what you are saying, be adamant. I'm not saying we want to be the company that does. I'm saying we will be the company that does.

Step 2: Cultivate Your Founder Market Fit

The second thing to think about is cultivating your market fit. So founder market fit is having absolute deep domain expertise. You want to know everything about your business inside and out.

Starting from the bottom, going back to the drawing board and thinking, I want to learn more about this. So if you are in an area where you don't have a direct qualification or direct work experience, you wanna go out and get it.

Then while you are learning or as you are learning, you need to start sharing your thesis, sharing your ideas, sharing your vision for the world. Do this constantly in tweets, blogs, every time you go to a party and you are asked Oh, what are you working on?

One of the things I used to do very regularly is blog on Medium. So if you search on Medium for my name, you'll effectively see a whole bunch of blog posts about why Beauty Stack is going to change the world.

This was massively helpful for investors who are Googling me because what they're seeing is that I've thought about it, I've gone through an intellectual process or, or a critical thinking process about why this business should exist. I knew what the market was saying and why I was the best person for it.

Step 3: Research Investors And Build Sale Funnels

Once you've got your founder market with your vision of the future, you've cultivated your founder market fit, then you need to start researching investors and building a sales funnel. Now, people don't really ever think about it, but fundraising is basically sales. That's it.

Investors have sales materials, just like you have sales materials for the thesis of the world that you've created. They've also created a thesis of the world, of the type of companies that they're gonna invest in and why.

I came from a beauty/fashion background. I didn't know any rich people. I didn't know any investors, and I would say I had the exact same function that you do and everything is Googleable. I was constantly using Google for all of the questions that I had – I didn't know how to make a sales funnel, so I just Googled it.

What you wanna do is start stalking their Twitter, their podcast, their decks, their blogs, and making notes in your funnel. I find Twitter is where all of the people in VC congregate, they use it a lot.

When you listen to podcasts with the investors that you want to connect with, you start to hear their language. Then you can mimic their language. You start to learn what's important to them, what their vibe is like.

Step 4: Get Your Data Room In Order

Okay. Step four, get your data room in order. A data room sounds very glamorous, but it's just simply a Google folder or a Dropbox which has all of the different important components of your company documents.

Think of it as a filing cabinet. That's all it is. Don't stress about it. There's this amazing blog post by Cheryl Foyle, which you can Google on why startups should build a data room before fundraising. And what she's helpfully done is create a checklist.

So spend a decent amount of time getting this data room in order because it truly, truly is going to save you a lot of headache. I spent ages on my first data room and now I just have to update it and tweak it where necessary. It's a really, really important part of the fundraising process.

Step 5: Cold Intros To Create Hype

Cold intros to create hype. Now a lot of people hate doing cold emails, but it's totally fine. I didn't know anyone in the investment world and I had to get people to know me. So cold intros might be direct emails, it might be messages on LinkedIn. Some of the best that I've seen are just simply newsletters.

What you want to do is write a cold email that just gives the top line figures, don't make it too long. You're say: Hey, this is the company, this is what we are raising, this is the traction we've got so far and you want to link to the deck.

Step 6: Create A Killer Pitch Deck

Now, back in the day when I was fundraising, I didn't know about Canva. I don't even know if it existed, but today, nobody has an excuse for an ugly pitch deck. So let's talk about the format. The number one format that I've seen for a pitch deck is Sequoia Capital.

The Sequoia Capital pitch deck template is absolutely golden and I one hundred percent recommend that you Google it. One of the other things you can do is Google some of your favorite companies' pitch decks.

To hear Sharmadean’s indepth take on how to build out the perfect pitch deck watch the full video here

Have multiple formats of your pitch deck and have your pitch deck on your phone ready to send at any moment. I've sent my pitch deck at parties. I’ve sent my pitch deck at four in the morning at a rave. I've sent my pitch deck on a mountain in Italy – I always have it on my phone ready to go.

I prefer to have a PDF or a canva link. I actually hate using DocuSign, and the reason is I can't zoom in on my phone. When you are doing your pitch deck, you want to look at it on your phone to make sure that the pitch deck can be easily viewed on the go. You don't want anyone to have to zoom in, move things around, et cetera.

I would also consider doing a YouTube video of a private one minute pitch where you talk through your pitch deck or you do a little elevator pitch and then you've got the link to that ready to send.

Step 7: Get Your Team Ready For Your OOO

The next thing is get your team ready for out of office. If you are a solopreneur, your team might simply be your family and friends, it might be your company. Whatever it is, you need to tell them that you're going to be AWOL for two to three months.

When you are able to step away from your business for at least two months, you wanna get them to understand that they need to operate by themselves. You need to have things ready.

When you are able to step away from your business for at least two months, you wanna get them to understand that they need to operate by themselves. You need to have things ready.

It's really, really important that they let you fundraise, right? You can't run a company and fundraise at the same time effectively. You have to focus on fundraising and get it done.

Step 8: Tell Everyone You Are Fundraising

Tell everyone you are fundraising. There is sometimes shame and nervousness around asking for money. For me, there was this huge psychological barrier considering I had been so independent for so long that I had to now sit across a table usually from a man and ask them for money, and I found that so uncomfortable. But you miss 100% of the shots you don’t take.

You need to shout from the rooftops that you are fundraising. You want to be able to spread by word of mouth that you are open to receiving money, and this is an opportunity to invest in your business. You don't want your business to die because you're shy, shamed, embarrassed.

Think of it as you are doing them a service and favor by letting them invest in your business.

Step 9: Pitch and Tweak

Number nine is pitching and tweaking, pitching and tweaking. Having a pitch deck and fundraising is not a static activity. I probably had about 30 different versions of my pitch deck, and what I would do is number them.I had all these secret codes at the end of the file, so I would know what version of the deck it was and who I'd need to send it to.

Number one, have a fundraising window. Do not be fundraising forever. You can have a four month fundraising window and you need to close a round within four months, and what you want to do through your cold intros, your emails, your thesis, all of that, is you wanna set up 30 calls in week one. You want those calls to be 30 minutes. They should all be on Zoom.

You're gonna be sitting on Zoom for 5, 6, 7 hours a day, right? You want to schedule those 30 calls back to back and do it in an intense process. The reason you want to do that is because a.), you need to sniff out who's not interested and just get them out of your process, but b.), all the investors chat to each other all the time.

They're chatting, chatting, chatting, and you want to create this kind of whirlwind of activity that is all around you and your business. The reason I love doing the calls is because I can put Post-It notes all around my computer of all of my stats, all of my key phrases. I tend to not do the first meeting ever in person.

The second week, you want to do 10 calls. Those are follow up. They might be follow up calls and they might be new calls, but basically they're the investors that are more of a higher tier.

So then you wanna get all your calls in week two, and then finally your five calls in week three. These can be hours long. So when an investor's really interested, it might be like, okay, I want you to meet the partner, or I want you to speak to my boss, et cetera. What you want to do is narrow it down, narrow it down, narrow it down. Then finally, and only then would you want to start doing in-person meetings because you ain't got time for that like this.

TOP TIP: Never send your deck on a Monday. The partner meetings happen all over the world at the same time, and that's when all the partners go through all the pitches and they decide what they're gonna invest in that week. If you get invited to pitch a partner meeting you've done most of the work, you're on your way.

To Learn how to move forward with the term sheet stage watch the full video here…

Step 10: CLOSE THE DEAL

The final tip that I'm gonna share, which sounds really obvious, but people don't do it, is close the deal. When you've had your strip window and you've got your docs ready, you need to remember that rich people and VCs are rich.

Their salaries are insane. Rich people are busy and they, and this is for angel investors especially, there are angel investors who will say, yes, I'm gonna write you a hundred grand check, and then they'll go on holiday and then you can't get in touch with them. So you need to keep following up, following up, following up and creating FOMO and closing that deal.

I remember, I angel invested in a company and while the fundraising was happening, the founder sent out a newsletter to all of those investors, with updates to the business just to keep that momentum going.

One of the things my investors said is, you should mention the domino effect and the fear of missing out. Once you've secured one cool angel, everyone else follows.