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How I Helped a Blockchain Startup Get a Pre-seed Investment of $500K

Every entrepreneur has gone through something similar to this:

*Blockchain Entrepreneur walks into the Daily Stand-Up*

Blockchain Entrepreneur: We need to raise investment asap. What do we do?

Employee 1: Let’s start a bulk email campaign!

*Blockchain Entrepreneur sends 10,000 emails and waits.”

“Three days later — nothing.”

“One week later, still nothing.”

*Domain gets restricted*

Blockchain Entrepreneur: We need a better approach, or we’re going to sink.

Employee 2: We should approach investors in events!

*Blockchain Entrepreneur approaches an investor in Bitcoin 2Go, pitching his idea*

Investor: Ehemm…okay! Here’s my card. Send me an email, and we’ll talk.

*Blockchain Entrepreneur sends the email and waits*

*Nothing*

Blockchain Entrepreneur: Dad, do you know what blockchain is?

And with the recent downturn, the economy has taken, these scenarios might be more frequent.

“Make me laugh.”

As usual, I was meeting with a potential client, a blockchain startup. They have this interesting product, which is basically a framework that helps in blockchain gaming development. They were looking to expand their business and get some investment.

There are various good ideas that I get to hear every other day. But, no matter the idea, sometimes the vision doesn’t sleep on me. Don’t get me wrong, my client’s product is remarkable, but what made the cut for me was that they genuinely made me laugh in that first meeting. I felt connected on a friendly and professional level with them as a team.

Talking business with them was time well spent.

Now it was time to roll up my sleeves and get the job done.

Let’s get to business: Raising funds 101

When cooking pasta, you need water. When raising investments, that water is updated market research. When talking to an investor, you need to be aware of the market at that very moment.

I did thorough market research to ensure they were updated with the latest trends and news. The blockchain market changes every other day, so it was important that they stay on top of these updates.

You can cook spaghetti, but some people like penne.

The second step is to polish all the documents. They already put a lot of effort into creating the pitch deck. We had to remove what wasn’t needed and enhance their essential values.

Were there things we disagreed on?

Yes, they were. They will always exist when working with people. For instance, at one point, we didn’t agree on whether we should add the advisors or not. They were taking three pages out of the pitch, which seemed too much. However, it was important to them, so we found a middle ground; we only added a few of the relevant advisors. At the end of the day, they needed to feel the most comfortable with their deck.

I always stay behind my expertise; that’s why they hired me. Yet I make sure I’m expressing the full vision of my client and who they are. In the end, they liked the deck, and I was confident in presenting it to potential investors. So, moving to step number three — where does one find potential investors?

“Where are you, my dear investor?”

I was referred earlier to Dovemetrics, a crypto fundraising database and a gold mine of investors. It has a huge database of investors in the crypto-tech world. Targeting the right audience is the key. There’s no pitch I can sell if there’s no problem to solve. So I knew that people in Dovemetrics were all ears for good blockchain ideas.

The next challenge: start a conversation.

“Hello! I’m talking to you.”

I go about getting that first interest in a few ways. First, I talk business; thus, I walk into rooms where business is handled.

“Who doesn’t check their email, right?”

I tested a few bulk emails with a new domain I purchased. Sending many emails might be considered spam; you wouldn’t want that, especially for your personal email.

So, I only sent batches of 10 different personalized emails. I’m not a fan of cold emails and calls anyway —I consider them the least efficient method.

However, I gave it a shot and sent a few introductory emails. What is extremely vital is what this email contained.

It was a short introductory email that contained: my name, where I’m located, and that I have a very interesting client in the blockchain industry that is working on a gaming framework.

Was there a return on my time investment? Yes, I saw a 10% response rate. Not bad, yet not the best.

The Investment Disneyland — Linkedin

I realized that sending emails, however personal it is, is not putting me in the best negotiation position. Hence, I turned to the Disneyland of the business world — Linkedin.

I found the targeted group of people from Dovemetrics on LinkedIn with my sales navigation account. Now that tool is a miracle worker. It’s one thing to send an email and another to spark a conversation.

My pitch was the simplest. I made sure not to oversell. I wanted to strike the line between “This person needs my investment desperately.” and “Wow, they are probably not needing my investment because they are very successful.”

“I’m Al, a 10-year business consultant in Zurich. I’m working with a client in the blockchain gaming industry, and they have this product that provides an innovative framework for blockchain games, which I think could match with your investment firm.”

Then I waited…

In comparison with email, this approach had a 40% response rate.

Those responses led to a few meetings, and in a couple of months, we were scheduling more serious calls.

“What? You are scheduling a call with one of our competitors?!”

I believe in the unconventional route, which somewhat follows me in life. One of the calls was actually with a competitor. A big firm in the blockchain gaming industry-very interested in investing.

My team was a bit skeptical, and who wouldn’t be? However, I told them to just go with the call and decide later.

They did, and it was a successful one — an agreement of $500K in the pre-seed round.

“How can you do it?”

More often than not, it can be perceived that getting an investment is the most complex math equation. And it is as much as it is not. So how to do it right?

Step 0 — Do you need an investment? Or do you want it?

Assess whether you need an investment to grow or to survive. That makes a difference in the approach and strategy of raising investments. Scale and know your position in the market. Do you have the means to invest in an investment strategy? Are you merely scared of spending some of your savings and hence looking for an investor?

Step 1 — Market Research

Making sure my client is on top of the latest market trends is critical. Investors need to ensure the accuracy of the financial projections, and there’s no way to beat around the bush except, sometimes, with strong market research.

Step 2 — Killer Pitch Deck

Update your pitch deck. An ugly shirt in an interview might be a deal breaker. So can an ugly pitch. Keep it short but informative; don’t cut crucial information just for the sake of it.

Step 3 — Target the right person; you probably only need one.

I used the right tools, reached out to the people most likely interested in my client, and personalized the communication. Always envision this happening in the real world; then you will be able to see why a bulk BCC email campaign to investors would not work.

Step 4 — Persistence

Sometimes I see a 10% return on investment and sometimes a 40% ROI. The same effort gets poured into both channels, and it takes persistence to see the fruit. You can get thousands of rejections, but you only need one affirmation to make a billion-dollar company.

Finally, my golden rule is that I’m the link and am only responsible for introducing my client to the right investors. The rest is on the founder and affiliates of the company. Focusing on my expertise helps me give my all and deliver what I promised initially–raising investments.

Yet, with the right mindset, an entrepreneur does not need my support and could very well be much more successful while pitching their own startup.

Note: This article is only aimed to help you raise investments. It is not intended that you would approach me later and ask me to get investments for you. I reject almost 95% of the companies that approach me for active investment raising, mainly because they only need to trust themselves and pitch perfectly.

If you have any questions in terms of advice, I would love to help out in the comments.

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