The Fundraising Experience That Changed How We Do Business
Raising money for your startup is a necessary hassle. It’s one I know well, having raised capital for my previous businesses and now of course for Cortado Ventures. When all you want to do is get back to running your business, the long wait and being “ghosted” can be a drag on your mental energy. Over 10 years, I have raised capital directly from an institutional investor, from large and small private equity firms, family offices, individuals, and even mezzanine finance. But these experiences gave me insights for how to better serve the star of the show: the entrepreneur.
When we started Cortado Ventures, I reflected on what my experience was like and how I should make it better for entrepreneurs who meet with us to raise funds. We wanted to make the process more efficient so they can get back running their business as quickly as possible. The entrepreneur is key in our fund strategy: every decision about portfolio companies starts from an understanding of the founders’ needs — that’s where investment decisions are made. And after meeting with them? We will do what we can to help them succeed because we know firsthand the challenges ahead in running a business.
Raising capital is a process that starts with thoughtfully contacting hundreds of potential investors. From that, you hope to hear back from most and land dozens of productive meetings. Most likely though, you never hear back with so much as a “no thank you.” Or if you do land a meeting and think it went really well, half the time you never hear back even after several follow-ups.
Let me use my own experience with my previous company as an example. Out of about 30 initial introduction meetings, I heard back from about five. Four of those five were follow-up requests (most resulting in an eventual term sheet), and one was gracefully declining and offered their reason why and some feedback. That means the other 25 “ghosted” me — never responded or follow up after that initial meeting. Only one gave that valuable feedback, which we incorporated to improve our business plan and pitch.
At Cortado Ventures, we decided to be like that 1 in 25, providing quick and meaningful feedback. We always strive to respond quickly. If there is not a fit for us to invest, we try to give feedback describing why, and even offer alternatives and introductions for the company to find that perfect fit investor. We even developed our own smart form for entrepreneurs to tell us about their company in less than 3 minutes, after which the entrepreneur can usually get an answer that same day. This form also helps us quickly understand more about the company, so we can provide meaningful feedback and referrals.
We recognize we won’t always get it right. Like the entrepreneurs we invest in, we’re always learning and improving. In an industry defined by rapid change, Cortado Ventures’ culture is driven by our entrepreneurial heritage.
Cortado Ventures is run by founders and operators. We know what it’s like to conceive of, fundraise for, and operate a company. I’ve raised direct institutional, family office, private equity and even mezzanine financing. When we started Cortado Ventures, I reflected on what my experience was like and how I should make it better for entrepreneurs who meet with us to raise funds for their business. We wanted to make it a better experience — more efficient but also more personal than the traditional approach.
If you’re innovating in one of our core areas (energy, transportation/logistics, materials/manufacturing, future of work, life sciences) and are raising a pre-seed, seed, or series A round, reach out to us today.