When constructing a new building, the parts that no one sees are often the most important, and the same goes for business. Laying a solid foundation might not be the most glamorous part of starting your own venture, but without it, all other efforts will be in vain.
The connections you make, the money you raise, and the plan you lay out are all dependent on your dedication to setting strategic goals and doing everything in your power to achieve them. But even before that, you have to start with the why.
In an exclusive interview with 33voices’ Jenna Abdou, Boost VC CEO Adam Draper shares his insight for budding entrepreneurs and founders on how to get off the ground, secure funding and stay dedicated as a startup or small business.
Though Draper works with Bitcoin startups as a part of Boost’s startup accelerator program, his advice transcends Silicon Valley and is equally impactful for the small businesses of America.
Why You Have to Be a Cockroach
Abdou begins by asking Draper what insight he can provide on the key components [of an accelerator] that startup hopefuls should look for before applying.
Adam Draper: The advice is the same I would give to any entrepreneur. Number one is build the thing—try it. Try the minimum viable thing and see if there is a need for your product. Focus on one problem, rather than solving everyone’s problem. And be enthusiastic. Pick something you’re really excited about because starting a company is probably the hardest thing anyone can do. When the going gets tough, you want to keep going and you want to be the one who keeps going.
We have a saying that ‘we fund cockroaches’. The goal of a startup should be to build something incredible, but to not die in that process. Cockroaches are good at building, teamwork and not dying, so we want to find the scrappiest, best entrepreneurs who are super passionate about what they’re doing, which we define as cockroaches.
What Makes a Cockroaches Successful?
Next, Abdou asks Draper what the defining success factors of "cockroaches" were. Though Draper responds as a venture capitalist or Angel investor would, the reality is that these are the questions any business should ask itself before going after funding. They are:
- Is the market size big enough?
- Is the team capable of building what they say they want to build?
- Is the timing right? Is it too early or too late?
- If this team was running out of money and living in their parents basement, would they still be building this product?
Draper went on to say that they look for “the why” a company is doing what they’re doing, not the how.
It's All About Teamwork
Abdou: You’ve said that entrepreneurs have good days and bad days, often within the same day. How do you personally cope with that when you have to keep moving forward?
Draper: Having a great team around [s important]. Solo founders have a hard time getting through the early days because they get lonely. When the going gets tough, my partner [co-founder Brayton Williams] and I talk, we fight, we build. As long as you have someone you’re in the trenches with, it commits you to the overall vision.
Ask For Advice, Get Money Twice
Abdou: You said you were rejected by over 150 VC's when you were raising money. You emphasize that headlines only say how much a company raised, not how hard it is. Can you elaborate?
Draper: Fundraising is extremely difficult. I emailed probably 3000 people when I was fundraising, I met with about 300, and I ended up with about 40 people who said yes. If you look at me on paper—I grew up in Silicon Valley and know a lot of random people around here—and it still took 12 months from opening to closing of my funding. I don't think a lot of people understand how much work goes into fundraising, or what people are looking for when fundraising.
From an entrepreneurs perspective, right now it's really popular to be a startup, so it's even important to standout as a startup right now. You really need to create great progress, great metrics and show your enthusiasm. When you're fundraising, the best advice I could give is:
- Know why you're doing it (obviously)
- Get a product out as soon as possible, and get early indicators that the product is needed in the market
- As an investor, when someone is excited about their product, you can't fake it. The excitement rubs off. Be enthusiastic about what you do, and be excited about solving a problem in the market.
Abdou: What's the best way to stay in touch [with investors]?
Draper: I encourage our startups to send a monthly update to all investors they've ever met. Investors invest in lines, not dots. You need to have multiple data points on a line in order for an investor to feel like there's enough momentum to invest. And it's a way to keep in touch with a lot of really great people.
Abdou: You made a great point about having the ability to be memorable but to not overdo it. What is the line between being memorable and going overboard?
Draper: It's about knowing your audience. Some people want the numbers, some people want the story. Great investors have the ability to receive stories and understand where the product is. They're seeing 10 companies a day, and you have to some how standout amongst those companies. They will be thinking about the last five meetings they had before talking to you, so you want them present. Ask them about their day, their daughter, whatever you can to get them in the "now."
Different investors are looking for different things—not all investors are the same. Them saying no might just mean that they can't add value, but they might know someone [that can]. Keep in touch and build great relationships.
Once you have the why, the team and the product, what comes next? Enthusiasm can only get you so far. Draper shares the insight that in the startup world, "our job is uncertainty... starting a company is like being thrown into the middle of the ocean and having to build a boat while also finding where land is. You have to do everything at the same time."
There's no doubt that it's exhausting and terrifying to be in this position, but there is a map of sorts—the setting of goals to keep you on your path to land. 33voices also spoke with numberous other startup CEOs and founders to get their insight on how to best set achievable goals. Check out their Slideshare below to gain more insight on how to increase productivity, set goals and much more: