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Developing a Systematic Process

As you start the raise process, one critical piece is to develop a systematic process that delivers results in a replicable, consistent and predictable manner. The below view illustrates the various steps of a successful raise process:
1

Recurring Process to Identify & Qualify Investors

Founders need to build a systematic process to identify and qualify strong-fit investors. The process needs to push fresh energy into the top of the funnel on a recurring basis every week and/or month.
For guidelines on identifying and qualifying investors, refer to this section.
2

Land Introductions

Once the right mix of investors are identified, founders need a systematic process to land introductions. The critical aspect is to ensure that the process delivers results on a. recurring basis.
For guidelines on how to build access, refer to this section.
3

Convert First Calls to Due Diligence

In the final step of the process, founders need to convert some of their first calls with investors into due diligence. After tracking a large number of raise processes, our estimates suggest that between 10-50% of first calls should convert into due diligence discussions in which the investor wants to dig in and evaluate the opportunity for a potential investment.
The endeavour to raise venture rounds is best viewed as a process and not as an event. Instead of putting too much weight into a few conversations, founders are best served by focusing on running the right process. In order to manage the raise systematically, it is important for founders to have general clarity on the process that they want to follow. The below visual illustrates a recommended process: The visual provides a decision-making framework for common scenarios in the raise process. Instead of getting stuck on the dead-ends, users can view these as inevitable “resting points” for many investors that are either not leaning or, or that they are unable to access. The below table expands on the key decision points in the process to ensure a high-velocity approach:
Process PartScenarioRecommended DecisionRationale
Identification & QualificationThe investor does not meet one of the criteria identified by the userDisqualify the investor and move onIt is critical to spend time on the right investors
AccessUser is unable to identify an intro path and/or get an introTemporarily move the investor to “Unable to Access” and move onThere are probably many other investors that are a strong-fit and that you can easily access
ProcessInvestor has gone silent and/or has not responded to the last follow up emailMove the investor to the “Leave for Next Round” stage and move onIt is crucial to know when an investor is not leaning in, and to focus efforts on ones that are are leaning in
A key component here is to move on when an investor becomes unresponsive. Statistically, most investors that a user pursues will not lean in. To find success, it is important for users to correctly discern when an investor is leaning in (versus when they are not). For investors that are not leaning in, users should stay in touch and build the relationship for subsequent financings. For investors that are leaning in, users should prioritize these discussions, and spend most of their time in this part of the process.

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Process Velocity

A high-velocity pipeline is one in which new investors move through the different stages at a rapid pace. By bringing process excellence to identifying and accessing investors, founders can develop a high-velocity rhythm to maximize the odds of success. In order to run the fundraising pipeline at a rapid pace, founders need to develop up-front clarity on how to tackle given situations. With the above process, users know exactly how to respond when unable to access a given investor, or when an investor stops engaging.
In our experience of observing thousands of raises, a high-velocity process is the most predictive element that defines the probability of a successful raise. Founders that raise tend to move through the pipeline 5x faster than those that end up not raising.