How To Survive And Thrive In A Funding Round
Editor’s note: Tomer Tagrin is a co-founder of Yotpo, a social reviews platform for e-commerce websites.
When my co-founder Omri Cohen and I started Yotpo, a reviews and marketing solution for e-commerce, raising funding was new to me, like it is for most first-time founders. Three rounds and $13 million in funding later, I’ve learned a lot about the process.
First of all, funding can be really painful. When someone tells me they had a “fun” or “easy” time raising money, I’m like “Let’s be real, it was awful.” Some people have compared it to dating, I think it’s more like IDF boot camp — you’re overwhelmed, you’re scared, you’re constantly at the whim of other people, and you don’t know when you’re going home.
One thing that helps is to remember is that investors don’t just invest in metrics, they invest in the people and the dream. A company can be great, but if the founder is a dick and investors can’t relate to him or her and their vision, they won’t invest. I’m an engineer and I apply that mindset to everything I do, but when you’re raising money it’s all about connecting with people on a deeper level.
It’s easy to get wrapped up in the tactics, buzz words and numbers, but in the end it’s about people–you need to create an emotional experience for the investors, so they feel connected to your company, they are excited about it, and they want to be attached.
I started my presentation for our seed round with a clip from an episode of Louie (Late Show: Part 1), where he laments Louie-style about having to be a consumer and spending time on Amazon reading reviews about something you want to buy.
First of all, the clip was relatable. Everyone’s been through the experience of reading tons of review on Amazon and coming across a long, detailed one and thinking “Who the fuck even wrote this?”
Second, it was relevant. It was an easy segue into talking about how crucial reviews have become and how every online store needs them to compete. (At that point, we were still focused on social graphs and showing reviews from within your social circles, we’ve since pivoted into focusing on generating tons of trustworthy reviews and leveraging them for marketing.)
And third, it was funny — right off the bat, Yotpo stood out; people had an emotional reaction and became connected with what I was presenting.
I did my research on every investor, to make the pitch personal to them. I knew one guy was really into bikes. So, in the presentation all of the examples were about buying a bike or bike accessories online — this immediately made Yotpo relevant to him. Showing investors how a product is useful for them is also a great way to make an impression.
Funding can seem so impersonal and cold but there’s no reason it has to be that way. Keeping the process human is good for your sanity, your potential investors and for your company.
Image credit: Shutterstock/Taiga