If You Want Money, Ask For Advice (If You Want Advice, Ask for Money)

In the world of investing, there’s an ongoing debate over whether the team or the market size is more important for startup success. While those two elements compete with each other, this blog post won’t definitively answer that debate. Instead, I want to point out that neither of those are the product, which ranks far lower when investors decide whether to invest in a company.

So why would anyone ever think they can just call up an investor, pitch an idea and expect the investor to say, “Let me grab my checkbook”? To connect the dots: they’re not all that interested in your idea, they’re interested in the team executing the idea and the market for it. Both of those things take time and trust to properly explain. 

This is why so many founders, when asking for money, are surprised to receive a response along the lines of, “Sounds interesting, keep me posted! Oh, and here’s some advice!”

First off, this isn’t a bad thing. The investor is starting to build a relationship with you! But if you’re looking for quick cash or don’t understand the underlying subtext, this can be super frustrating. If you want to short circuit this response, start asking for the advice. Eventually, it will lead to money.

You may be sitting there thinking, “But Eric, I need money right now,” and, well, I look forward to working with you on your next company. If you’re two months from the end of your runway without a compelling story, and you haven’t been building relationships with investors for months, for lack of a better phrase, you’re fucked.

Don’t want to be fucked? Start building those relationships and finding ways to meet new investors now. And every day for the foreseeable future. One of my favorite aphorisms is “The best time to plant a tree was 20 years ago. The second best time is today.” The effort you put into relationship building WILL eventually bear fruit and pay dividends. So make it a priority.

For some people, that sounds awful. If that’s you, it’s possibly time to step down as CEO. Once you get on the high-growth-or-die startup train, you’ll be constantly raising capital until you sell the company, IPO or go bankrupt. And if you’re thinking, “we just raised a round, we’re done for now,” nope, error, wrong. Few investors, whether they have already invested in you or have an interest in investing in the future, EVER want to hear that you’re done raising capital. You always need to be adding fuel to that fire in the name of rapid growth.

If you do your job and constantly reach out to investors, you’re going to get a lot of advice. This is natural as they want to give you something, yet they don’t know you well enough to warrant an investment. So they’ll offer perspective and suggestions.

When they do, be like my friend and frequent co-founder Todd Sampson. When we were raising capital for MyBlogLog, he would always make sure that our dev team was available via instant messenger to handle rapid requests. I remember a meeting years ago with Fred Wilson of Union Square Ventures. Fred told us that he’d heard something about how orange CTA buttons get more clicks on websites than blue ones (turns out, there’s a fairly robust debate around this topic.)

While we were talking, Todd pinged our lead developer Steve over AIM (yes, I’m dating myself here) to make our buttons orange and push the change live. As the meeting wrapped up, Todd turned his laptop around to show Fred the new buttons on our site and asked “Were you thinking something like this?” Fred’s responded, “Yes, just like that! You should do that!” When Todd clarified that the change was already live, Fred was floored. 

Todd has a theory that we should all adopt — in any conversation, you can find a suggestion or piece of advice that doesn’t matter that much and is fairly easy to implement. And his best practice is to do that thing as fast as possible, then tell the investor you did it. I mean, we didn’t have a strong opinion about the button color, and if Fred thought orange would work better, why not try it? 

Rapidly implementing investor feedback immediately builds an emotional tie between the investor and your company. Maybe they didn’t invest capital, but they invested an idea, and now their idea is a part of your idea. They suddenly have a vested interest in your success, and you can use that later to get actual capital investments.

Additionally, trust is purely a function of time. It fundamentally boils down to three steps:

  1. Say you’re going to do a thing
  2. Do the thing
  3. Let them know you did the thing

Rapid iteration shortens the amount of time necessary to complete this feedback loop and, believe me, when you start implementing investor feedback, they often have plenty more, each time getting more and more emotionally invested. PRO TIP: this also works with journalists and future hires. Your biggest advocates already see themselves as part of the team.

If you still don’t believe me that relationships are key to funding, here’s one more story: 

After MyBlogLog sold to Yahoo!, we got the band back together to build its spiritual successor, OneTrueFan. We rapidly found a lead investor and in filling out the round, I sent an email to a dozen people with whom I had a relationship— previous investors, previously interested investors, people I had broken bread with and people I had seen shows with. Of those 12 people, eight were immediately willing to put money in, and the other four were apologetic about not being able to at that moment. With one email, I quickly filled out the round. 

Then, I sent an email to 12 new investors — my “reach angels” so to speak — and introduced myself and OneTrueFan. 

“Hi, my name is Eric Marcoullier and I’m the CEO of OneTrueFan. I sold my previous company to MyBlogLog to Yahoo! a few years ago and I’ve reassembled the founding team to take advantage of everything we’ve learned since. We’ve already launched the product and have great early traction. We’re raising $1.2M and, frankly, the round is already oversubscribed. But I will move heaven and earth to get you in this round because I’m primarily interested in what you bring to the table beyond capital.”

Of those 12, I met with just six of them. Of those six, every single one of them said, “Wow, this is exciting. Let’s stay in touch, we’ll invest when we know you better.” Every. Fucking. One.

As Todd likes to say, every single person whom I’d previously gotten drunk with (yes, on girly cocktails) was willing to invest in my company. Those who hadn’t had that magical experience said, “next time.” Whether that’s true or not, it’s directionally accurate. Investors invest in people they trust and trust comes over time. Start the conversations now, so that the money will come when you need it.

— Eric Marcoullier


Today’s post is one of the oldest aphorisms in the startup community and it has never been more true. Yes, there are some opportunities to strike right now with post-COVID “future of work” type startups, but by and large there has been a “retreat to safety” where investors are focused on traction and known teams.

If you’d like more personal feedback on your own fundraising strategy, please shoot me an email at eric@marcoullier.com or visit my coaching site at Marcoullier.com.


(Photo by Marcus Neto on Unsplash)

Leave a Reply