"As a former startup sales road warrior, I learned a lot of lessons about pipeline size, conversion metrics, sales cycle times, etc. You know the old sales saying ""always be closing""? There's an investment equivalent for tech companies that says ""always be raising."" You're always looking to win new business, and you should always be thinking about not only where your capital is coming from, but when you’ll need it and how long will take to access it.

BDC, Deloitte & Communitech delivered a VC Readiness bootcamp last month that discussed fundraising. There are a lot of parallels with sales pipelines and investment pipelines, including how many people you need to pitch to in order to reach your objectives, qualify interest, and generate demand. One of the important parallels that is grossly underappreciated is keeping your prospective investors “warm,” just as you might with potential customers. For instance, sharing high-value marketing content with future buyers let’s you keep in touch with them and top of mind. Likewise, there’s value in keeping up a regular cadence with investment prospects with whom you've discussed potential partnership.

Dave Caputo (angel investor and former Sandvince CEO) shared with me recently that he regularly hears first-time pitches and while they may not be a fit for him immediately, could develop into an interesting opportunity for his portfolio down the road. Yet he says he almost never hears back from companies once they've pitched if he hasn't indicated his interest in the moment.

There's this strange paradox: Investors rarely say a flat out ""no"" when they’re approached by an entrepreneur. Usually the investor’s response is a ""not now based on your 'x',"" where ‘x’ refers to some measure of progress with the entrepreneur’s company. The thing is, entrepreneurs often don’t follow that up with a progress update.

Warm leads are always better than cold. If you're building a network of investors who know and like your story, and you're taking their advice and gaining momentum, the easiest and most efficient method of raising funds is have those parties come back to the table.

Caputo’s advice for entrepreneurs is to keep a mailing list of every potential investor they have talked to and send them a monthly or quarterly email update. It's a simple, low-cost thing to do. If you're organized about your business, you should already be reporting on all of your key metrics, milestones and challenges, and taking a pause to summarize them for your influencers and potential investors is a great opportunity to reflect on your strategy and get feedback. You can also include requests for introductions to people you need to connect with, referrals, and advice on specific topics.

A suggestion on the content for an update to an investor might be as follows:

At a high level: What you said you were going to do, what you did, what you're going to do.

In more detail:

    • Highlights

        • Planned and unplanned accomplishments, PR, etc.

        • Key hires and customer wins or partnerships

        • Closed or committed investments
    • Lowlights:

        • Milestone misses explained, product delays, competitive risk etc.

        • Help needed (investors like to see how they personally add value)
    • Metrics in period and year-to-date, including monthly recurring revenue, customer acquisition cost, loan-to-value ratio, churn, gross margins, burn, pipeline, etc – whatever is key to understanding your business
    • Fundraising updates: Who's in, how much, what's left, what terms, timeline?
    • Contact information

There's a ton of science that speaks to the effectiveness of reinforcement in many different contexts. Being a squeaky wheel and offering up regular opportunities for financial suitors to engage with you will surely make your path to finding capital shorter, easier, and more effective."