How To Raise Millions For Your Startup: A Q&A With The Authors Of Get Backed

Get BackedP&Q: The book seems to focus on the importance of relationships. What are some things startup founders can do to avoid those potentially burnt relationships and build good ones?

Loomis: We care deeply about relationships. And the book really started off with Evan and I just trying to take care of our friends. More often than not, we’d get an email from an excited friend that would say, “Hey Evan, I’ve got this really cool idea, what should I do?” And our first measure of counsel for them typically was, ‘Think of this like you’re raising friends. Don’t think of these investors as money dispensers. Try not to put them in some sort of elite status where you immediately become nervous of them or standoffish. Think of them as friends and crowdsource. Get out there and ask for a lot of advice from smart people. Be playful with the feedback you get. Don’t hold on too tightly to it.’

That type of advice ended up working very well because you have to get in the fundamentally right mindset about people to seeing them as wonderful. They’re also curious. They’re interested in ideas. They’re interested in contributing to your idea. They want to make the pie bigger and that’s how the fundraising process typically works. That’s opposed to me giving you a pitch with the investor quiet on the other end of the table and 20 minutes later I say what do you think about my deal. But real fundraising and the best fundraisers are people who are playful. Kind of as in Baehr. They are curious. They ask good questions. They make it an experience that they invite the investor into.

That’s the fundamental thesis of this book. If I were to distill it down to two words, it’s great friends…first.

Baehr: Uh, Loomis, that’s three words.

Loomis: Well, I had two and then…you know…yeah, I messed that one up.

Baehr and Loomis: (laughter)

P&Q: What can our readers do to start building relationships and get ahead of the game if they plan on starting a venture either while in an MBA program or quickly after?

Baehr: I have an MBA from Harvard and was really involved in the startup community when I was there and I think I have been surprised at two things. Number one, the really small number of startups that emerged out of Harvard. This was a class of maybe 950 and I can think of maybe a dozen startups from classmates. I think that trend is increasing, but the reality is, it’s pretty rare that companies get started and funded out of business school. Consulting and banking are still massively dominant sectors that your classmates will go into.

This leads to my second point, as I think about all the people that have been very helpful to building the businesses I have built and raising the capital I have raised, less than 5% of them I met through business school. My peers in business school worked in consulting and banking and my professors from business school teach corporate strategy. None of those things are helpful for building a startup.

Loomis: Whoa, hey, this sounds kind of depressing.

Baehr: No, it’s the truth. And here’s the takeaway. It is really important to build a network of people that can help you meet the specific needs you’ll have in launching a company. If you’re going into business school, you should be spending time with people in the computer science program. You should be meeting local angels and venture capital firms in whatever city you’re in. You should be participating in business plan pitch competitions. Because those activities expose you to networks of people that will be much more specifically helpful to actually launching and raising capital for your business.

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