“How are you getting into seed rounds with just a $10k check?” Here’s how…

Help a Founder, Win a Deal

A couple of months ago, I met an amazing founder I’ll call “Jim”. Jim had recently left one of the best hard tech startups in the world.

Now he was kicking off a fundraise for his new company.

As soon as I met Jim and saw what he was building, I got really excited. And I was pretty sure other investors would be too. So I asked him…

“Are you looking to meet other investors?”

“That would be a big help!” he replied.

How a Tiny Investor Squeaks Into a Great Deal

Within a couple of hours, I had messages out to VC firms all over America. Soon, Jim had half a dozen VC pitches on his calendar.

Fast forward a month…

When I first met Jim, his round was in the early stages. Now, it was oversubscribed. I guess he crushed those pitch meetings!

“Can I invest $10k?” I asked Jim.

“Sure!” he said. Not long after, I had the wiring info in my inbox.

Passive Investors Get the Scraps 

Now, imagine if I had played this another way…

What if after I met Jim, I just told him to let me know if he gets a lead investor. No help, no intros, no nothing.

Would Jim have ever come back to me?

Maybe.

But I don’t like my odds.

But I wasn’t passive. I did all I could to get Jim lots of meetings and help him close his round.

Reputation Is Access. Access Is Everything.

My help was just a tiny part of getting the round closed. The credit goes to Jim and his incredible team of builders.

But as the Beatles say, “I get by with a little help from my friends.” 

And if Francis helps you before he’s even an investor in your company, wouldn’t you want to let him onto the cap table?

My check being probably the smallest in the entire round didn’t matter. It was the help I could offer that won me the deal, not the cash.

This is how you get into great deals. Give the founder a reason to take your money!

Helping Founders Isn’t Just for Little Guys

And never forget, the big boys have to demonstrate value too.

Do you think a super talented founder just takes any term sheet a VC throws at him? Not likely.

The best companies often get multiple term sheets. The founder then picks which VC firm he wants to work with.

The most helpful VC usually wins the deal.

Wrap-Up

Helping founders raises your chances of getting into great deals. It’s also a lot of fun.

If Jim becomes a big success, I can say to myself, “I had a tiny hand in making that happen.” 

If you want to invest in great companies, help a promising founder. You might be surprised the access that you get in return.

Founders: What help do you need? Investors: how do you help founders?

More on tech: 

3 Ridiculously Easy Things Every Investor Should Be Doing

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