Fundraising money takes hard work and absolute resilience. If you haven't already experienced it yourself, listening to cringe-worthy pitches and tough questions on shows like Shark Tank is enough to make anyone crumble.
It's all worth it for the final number that will help propel your dreams, though. Closing a round is music to a founder's ears -- and the Drone Racing League's founder, Nicholas Horbaczewski, is probably feeling great after recently securing $20 million.
This company launched a year and a half ago and it's a professional drone racing organization that broadcasts these crazy -- you guessed it -- drone races. Who knew that what started out as a videography hobby for many could diverge into a multi-million dollar racing company?
Horbaczewski, who's also the league's CEO, admits that although it's a constant hustle, entrepreneurs looking to raise money need to have one distinct attribute:
"Make sure you're passionate about the business and the mission. If it works, you're going to live and breathe this company you're starting. You'll talk about it all the time - while pitching investors, recruiting employees, conducting interviews, speaking on panels, engaging with customers and partnering with vendors. You'll need to convince all of them about your passion for the topic, and fake passion is easy to spot a mile away."
From there, he shares his tried-and-true method of how any founder could follow suit:
Don't Do It Alone
Even if you're a solopreneur, recruit your dream team or initial hire to join you for the journey. If you're partnered up with a co-founder, they should be at these meetings, too. Since you'll be dealing with investors who have been in the business for a long time, they're going to expect you to step up to their plate.
"Find people to support you with deep experience in fundraising; they can be an existing investor, board member, banker, lawyer, and/or a very experienced entrepreneur. Just make sure they can really commit the time to getting into the weeds and helping you as you begin to think about terms and round composition."
Look For Great Partners, Not Just Investors
Many entrepreneurs equate fundraising to dating. Initially, founders have to persuade investors that their company is going to be the next big thing but pending interest, investors have to persuade founders that they will be providing the best term sheet.
As a founder, after you've hooked your funding team, make sure that they will be there to support you beyond the monetary value at hand. Here's Horbaczewski again:
"When the round is closed and the dust settles, these investors will now be your permanent partners. What will they add to your business? How will they help you succeed? Do you want to work with them closely for a long time? You only get so many chances to bring in an investor; any investor you take that does not add value to your business is a wasted opportunity."
Learn From Every "No"
Just like in dating, fundraising can also bring rejection. It's important not to take it personally -- sometimes, your company just isn't a fit for their mission and that's okay. Other times, Horbaczewski notes, it's best to toughen up and find out why investors weren't attracted.
"It can be tough to call someone back who just said no, turn off your pitch and have an honest conversation about their concerns," Horbaczewski says. "But it's worth it."