“They said a $5 million valuation was way too high.” I was chatting with a great founder from Tokyo last night. And I could hardly believe what I was hearing…

Dealing With Investors With Crazy Expectations

We’ll call her Sarah. 

Sarah is raising for a SaaS company with some strong early traction. They’ve jumped out to $300,000 ARR in just a few months.

But even for a strong startup like this, raising money in Japan is really hard. If you’re raising anywhere outside SF or New York, you might be having the same problem.

“They were looking for a $2 million pre-money valuation,” Sarah said.

“But if you’re raising $1 million, you’d be selling a third of the company!” I said.

“I know! That’s what I tried to explain to them.”

Find Yourself Some New Investors!

When the investors you’re pitching just don’t get it, it’s time to find some new ones. Here’s what I suggested…

“You need to broaden your funnel of investors.” I said.  

“Find everybody in Japan that invest at your stage. You also want to look for VCs in the US that write checks in Japan.”

Finding Better Investors

I recommended using OpenVC to find new investors. It’s a great way to find the right investors for your company. 

Look for people who invest in your country, stage, and market. 

Sarah will filter for investors who write checks into early stage SaaS in Japan. She’ll want to avoid pitching folks who only invest in America or only do late stage.

How to Run a Fundraising Process

Fill your investor funnel with 200 names — a mix of VC’s and angels. 

Work your way down the list. Send a brief, personalized message to each one. Here’s a guide I wrote on how to do that.

Stack all the meetings in one week, if possible. Create a sense of urgency. 

If you’ve got a team of builders and some early traction, you should get at least one term sheet. 

Wrap-Up

Maybe you’re not in SF or New York. Maybe you feel like you’re on the outside, looking in. 

But there are investors looking for companies like yours! You just have to find them.

If the investors you’re talking to have unrealistic expectations, don’t worry. You don’t need them.

All you need is one investor who gets it. 

More from the blog: 

38 Words Got This Founder on My Calendar — Here’s the Cold Email Formula That Wins

Ghosted by a VC? Here’s What to Do.

Why Some Founders Raise Millions with a Text — And Others Can’t Get a Single Check: Traction vs. Track Record

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