Have you received an email that sounds like this?
“It looks like you have made good progress. We are fully invested through Q1 of 2017 but are raising funds for our next round.”
Do you always feel like you’re waiting for funding? You are actually. We all spend more time waiting for funding at the beginning of a new business than almost any other cycle of the business. Those who can find a way to shorten that wait, win sooner.
So What Does This Response Really Mean?
Here are a couple observations about this “we don’t have any investable cash” kind of response.
1. They complimented you about good progress. That is a good sign.
2. They don’t have any dry powder right now. Meaning, that they don’t have any investable funds but they are actively reviewing possibilities which means the funding is likely to come at some point.
3. They took the time to email, mention future funding and that could mean they’ve kept you on their possibles list for the future. If nothing else, you’ve made an impression.
Do I Need To Respond To This Investor?
I recommend that you keep them on your list of people to send updates to, but they should be a low priority until they have investable funds. You should spend time with investors that ARE in a position to write a check. Pursuing investors today that are NOT in a position to write a check is a HUGE waste of your time, and time is your most precious asset right now.
However, you will want to continue keeping them informed because they like you (they sent you a compliment), and they could be a source of warm introductions.
In short, don’t burn any bridges and move on to the next investor on your target list.
Take These Actions Next:
1. Review your target list of investors and prioritize them based on the BEST MATCH for your company’s stage and vertical industry. If you don’t have a target list yet, click here for a free tutorial on how build one.
2. Fundraising doesn’t have to be chaotic. Watch this Video to get control of your campaign.
3. Ask us to review your ‘Dream Team” Investor list and provide feedback on it.
4. Download our free SmartMoney PlayBook