Here at ReadWriteStart, we’ve been following the Open Angel Forum closely as Jason Calacanis’ project moves from city to city bringing angel investors and worthy startups together in one room. The first event in Los Angeles was of particular success to Backupify, which provides backup for your online social network data, including Facebook, Twitter, Delicious, WordPress, Gmail, Basecamp and many other services. Following the event, the company raised a Series A round of $900,000 from Calacanis, Chris Sacca, First Round Capital and a few others.
Earlier this week, CEO Rob May posted his take on the process of raising funding from VCs, which he likens to dating. According to May, pitching to VCs is not about forcing your idea down their throat and convincing them why they should invest in it; if a startup and a VC are meant to be, it will be more like love at first sight.
“They either like you and your idea, or they don’t. It’s like dating because your goal in dating is not to convince someone who is a bad match for you that somehow you are really a good match. That’s a recipe for divorce,” says May. “It’s really about finding the person that is naturally a good match. Same way with investors.”
One thing that May did much differently than other entrepreneurs seeking funding is that he approached investors without a business plan. While he doesn’t recommend this as a solution for every startup, he does find that in his case, not having a business plan did not really hinder his efforts.
“I sat in front of VCs who thought I was crazy for not having a business plan. I was asked ‘how can you run your business if you don’t have a written plan?’,” says May. “I also sat in front of VCs who said ‘glad you didn’t waste time writing a plan, because we wouldn’t read it anyway.’ It’s really more of an art, not a science.”
Another less standard practice May chose to include in his presentation at the Open Angel Forum was not a special slide on his pitch deck or a certain phrase; May drank a beer while presenting. Again, he doesn’t suggest this is a solution for everyone, but he uses it as an example of how to relax and “be yourself” when pitching to VCs. They are very experienced at talking to startups and any good VC knows how to spot when you are full of hot air, and they will call you on it.
“It’s never easy, not even when you have a good idea. That’s the point. That’s why so few people ever do it,” says May. “If you want to learn to raise money, the best thing to do is go try to raise money.”
Photo by Flickr user apol3.