Hi, everyone. This is Alejandro Cremades, and today we’re going to be talking about
how to track the fundraising performance. Before we get started, make sure that you
hit that Subscribe button, and this way, you will never miss out on any of the videos that
we roll out every week. As they say, if it doesn’t get measured,
you don’t really know about the performance – what you’re doing, how you could optimize
your chances of getting that investment when you are in front of investors. In today’s
video, we’re going to be breaking it down for you and giving you the insights as to
how you know if you’re doing a good job or if there’s a lot of room there for improvement.
Let’s get into it. When it comes down to tracking your fundraising
performance, there are great tools that you can use. You can use Google Drive, you can
use Dropbox, and you can even use a CRM to know how people are engaging. How many times
are they opening your emails? What are they clicking on? All of that good stuff. Those
are things that you actually can do. Those are tools that you can get.
You want to make sure that you’re using some of those tools to see whether they’re
spending time on your deck, on your materials, or perhaps they just don’t care. When that’s
the case, you don’t want to invest more time with that lead.
Try to prioritize the time with the people that are going to be more inclined to actually
make an investment. Those are going to be people that are on your CRM, on the tool,
where you can see how they’re engaging with your interactions, with your communication.
Maybe there’s someone who is opening your email a lot of times, and maybe that’s someone
you want to invest in and more time to close them and to become investors.
When you’re out there, one thing that you want to do to optimize so that performance
is actually increasing is to have a good grasp, you and also your team, on some of the key
metrics that showcase the health of your business over the course of time. Some of those could
be the following: Accounts receivable, but not yet realized
revenue Recurring revenue including per customer,
monthly, and annual revenue Gross profit
Customer retention rates & average lifespan of a customer
Lifetime customer value Customer acquisition cost including paid,
organic, and blended Active users
Growth rate Cash burn rate
Financial runway Revenue per employee
Net promoter score One of the metrics to keep in mind is the
amount of days that you have been out there raising money. If you’ve been out there
raising money for more than three months, then it starts to become tricky. When you
hit six months is when you know that things are not working out at all.
At that point, you need to go back to the drawing board, and potentially, you need to
stop fundraising and reflect on those previous discussions that you’ve had and to try to
implement that feedback so that you can perhaps increase the chances of getting financing
from those people that you were engaging. Maybe you target them in a few months from
now with some of those changes that they suggested implemented so that you can get them excited
to jump in. Then, the number of investors committed could
be another interesting metric. Maybe they have not given you the money yet. Maybe they
need a lead investor, which is the one that comes in, puts a price tag for everyone to
jump in and invest. But, essentially, maybe what they said is, “I’m going to commit
x-amount of money to your round of financing.” Perhaps there’s a certain amount of money
committed, or there is a certain amount of people that have committed some money whenever
you get that lead investor. Those are all people that you’re going to be counting
towards understanding if there is some momentum or not.
Next is the number of investor meetings. Remember one thing. More emails, more communication
to investors may lead to more meetings, but more meetings don’t equal more money because
investors, for a living, are meeting with entrepreneurs. Who is introducing that entrepreneur?
That type of social proof and background-relatedness is critical to the investor. So, remember
that it’s not about quantity; it’s about quality when it comes to meetings.
You need to have warm introductions to those investors. But if you have warm introductions
and there are quality meetings, you can keep track on what’s the amount of those meetings,
which is going to tell you whether or not you have a healthy pipeline. It’s like sales.
You need pipeline; you need numbers. The more quality meetings, the more chances of getting
that money in the bank. Then, you want to track the number of follow-ups
with investors. How many follow-up meetings are you getting? How many follow-up Q&As,
calls, or emails are you receiving from those investors that are showing interest. That
is going to lead you to potential interest in your business, and that’s a good metric
to keep track of. The number of targeted investors that you’ve
pitched. For example, if you have a list of 150 people that you can get an introduction
to, how many of those were you able to secure a meeting with? That’s going to help you
in understanding what kind of appetite there is in the market for a business and for an
opportunity like yours. Also, the investor retention rate, meaning
those investors that have invested in your company in the past that are reinvesting,
that is going to be an excellent metric because if you have investors that have invested in
the past and that are not reinvesting in your current round, that ultimately sends a negative
signal to the market. I can tell you how many times I have seen
entrepreneurs where, unfortunately, the investor didn’t come through, didn’t reinvest,
and then other potential investors are left with thinking, “They’re not investing.
There’s probably something wrong with this business,” and they don’t end up investing.
That, in many instances, is leaving the company to die.
You want to always have those existing investors excited about the future, being up to date,
so that you have good rapport with them so that they have the trust, and they know what’s
coming. Then, when that round opens, they jump in because that’s going to tell a lot
to other new investors that you’re trying to pitch to get onboard as well.
Existing investors are great for introductions. This is another interesting metric. How many
of your existing investors have made introductions to other investors in their network. In many
cases, those investors co-invest with other investors. The venture world is very small.
Everyone knows each other, so how many of your investors have introductions to others?
Are they excited enough to grab the phone and make those phone calls so that you can
secure that round? Then you can take a look at the pitch deck
tools. There are tools, for example, like DocSend, that allow you to see who is viewing
your slides, how many times, what are the slides that they’ve viewed the most.
And there are other tools that you can use. You’ve got to be careful here because in
many instances, for those types of tools to really make sense, the investor is going to
need to input their email. To input the email, to be able to view anything, that’s friction.
Fundraising is not about adding friction. It’s about removing friction.
If you’re able to come across tools where the investor doesn’t need to input anything
to actually view what they’re seeing, that’s great. Maybe you can track the actual views
without having to track the actual individual because some people are concerned about those
tracking tools, so be careful with that, and use it to your benefit when it comes to the
views and the analytics that you may be able to have access to on your presentation.
What about your LinkedIn views? Who has viewed your profile? The premium membership of LinkedIn
is great. You can actually have access to see who has viewed your profile in the last
month or perhaps a couple of months, and that is going to allow you to see that maybe there’s
someone on that venture capital firm or in that angle group, or even that individual
investor that you’re looking to target. They’re looking at your profile. They’re
looking at your bio to see your expertise, your skillsets, what you’ve done in the
past. Those are going to be people that are engaged, that are interested in learning more
about you, in learning about what you’re building. That could be another great metric
or something to keep in mind to do those follow-ups and close that investor that has interest.
The data room that you put together, which is that room, that folder on Google Drive
or on Dropbox that you’ve created, how many people are viewing that? You can actually
track this on the analytics. You want to know how many times they viewed it. What are they
viewing the most? What kind of documents they like to download or that kind of stuff so
that it leads you to know what kind of momentum is happening because the diligence room is
one of the last steps to actually close the round? This is where they actually verify
your claims. There’s enough interest to go one step above
to really put your company through the x-ray and see if it makes sense or not to follow-through.
This is one of the last steps to actually give you the money. If you have a lot of views
and a lot of momentum in your diligence room, that is a very, very good signal.
Then take a look at the actual funnel from top to bottom. The top is when you’re getting
the introductions, and the bottom is the dollars raised. You want to see, out of the people
at the top, how many people you were able to push all the way to the bottom and give
you that money. The rule of thumb is that per 100 meetings
that you get with 100 different investors, one of them is going to tell you Yes when
it comes to making an investment. If you put that into perspective, what kind of performance
are you getting? What kind of results? So, dollars raised is an easy one, but you want
to benchmark that and put that in parallel with the people that you have at the top of
your funnel. Then, on your CRM, you want to take a look
at the percentages. So, you want to take a look at the open rates on the emails. You
have to take a look at the clickthrough rates, at the response rate and put that into perspective
and know whether or not those are good numbers if you put them with industry numbers. This
is going to help you in understanding how to optimize the language, the subject line,
the email. You always want to constantly iterate. Use different templates, different formats
so that you can see where you’re getting the best results and go all-in when you find
a certain email or language that is performing the best.
When it comes to fundraising, you’re going to have the cold approach to the investor,
and you’re going to have the warm approach to the investor. On the cold approach, you’re
going to see that that’s going to destroy your metrics because you’re going to be
having a lot of numbers, a lot of quantity, but then not a lot of investments.
On the warm side, you may have a few meetings, and that’s all it takes to actually close
the money. That’s why I’m always going to recommend that you make sure you’re getting
someone that is already in communication and perhaps in touch with that investor that you’re
looking to target. Typically, the best profile of people to make
that introduction are entrepreneurs that have received an investment in the last 6 to 12
months from that investor that you’re looking to target because ideally, those people are
still getting to know each other with the investor. They’re still in the honeymoon.
Nothing bad has happened in their relationship or in their company, and that’s why they’re
great people to open that door for you because that is also going to help to reduce the amount
of time that it takes from the first touchpoint to money in the bank.
Hopefully, you liked this video today, and if that’s the case, please hit a Like. Also,
leave a comment below, and let me know what you’re thinking in terms of tracking your
own performance. And Subscribe to the channel so that you don’t miss out on all the videos
that we roll out every week. If you’re raising money, shoot me an email at alejandro@pantheraadvisors.com.
I would love to help you out. Thank you so much for watching.