4 dirty little secrets that will get you funding for your startup

4 dirty little secrets that will get you funded

This time I’d like to share with you 4 dirty little secrets that will get you funded. This topic is good both for fledgling entrepreneurs, and for investor wannabes. When I first started out, I couldn’t tell a difference from a real angel, and an angel investor, and there was a lot of trial and error on my behalf. I did manage to raise $240.000 ($100.000 from American investors) from 6 angel investors, and government grants, which is a lot for a startup coming from Eastern Europe. Hopefully this post saves you a few hours, a couple hundred bucks or some embarrassment. I know there are more than a few entrepreneurs coming into Shark Tank that don’t know this.


1. If you have preorders (lots of them) or orders, you have a proof that the market is craving for your product. Five thousand dollars worth of orders won’t get anyone’s attention. You really have to have a lot of money coming in, or proven potential. If your product/service is low cost, you have to have a ton of them.

Like everything else in the Universe, if you are not growing, you are dying.

It doesn’t matter if it’s a one-time purchase, or a monthly subscription, high LTV or low LTV as long as there are a lot of them to hint that the company is worth over a million dollars. If the valuation of the company is lower than $1M, it’s hard for an investor to imagine further growth, and a return on the investment. There has to be growth! Growth first, investment second, not the other way around.


2. If the team is complementary (technical + business) or (design + business) or a third combination for your particular type of project, and has a good enough track record you have a good chance of attracting investors. Someone has to pull this idea off, and by someone, that means the founder.

Investors can help, accelerate and connect, but the founders are the ones that have to pull it off.

You have to build it, and sell it. Peter Drucker said that business (this includes startups) is two things: innovation and marketing. As founder(s) you are responsible for both.


3. If you know something “they” don’t, a.k.a. have a secret weapon, a.k.a. an unfair advantage like a proprietary system. That’s right, if you have the power the pull the Houdini trick on your competition, it will definitely attract some investor interest. Sometimes that scrappy guy/underdog look can help you stay below the radar, but you need to have that special sauce.

Barcelona has Messi, Chicago Bulls had Jordan, who do you have?

When you are good at something and making money, there are so many companies entering your field you have to have a secret weapon. IPhone – Galaxy, Mac – PC, MySpace – Facebook, the examples are limitless. I bet that for every product on your table right now, there’s a competing product.


4. If you have the No Matter What. Some entrepreneurs have that “no matter what” attitude, and investors love that. Do you want to know why? Clients also love that attitude. The opposite sex loves that attitude. Business partners love that attitude. No matter what, wins every day, every week, every month, every year. No matter what is called resourcefulness. It’s when you don’t have money for a marketing budget so you take out your magic hat and your guerilla-marketing ad goes viral and brings sales.

No matter what is called “against all odds”

It’s when you have mononucleosis, your company is running out of money, and the service isn’t ready to ship, but you raise another $50.000 to survive through the winter. No matter what is called tenacity. It’s saying no to your old friends (“let’s go grab a beer”), and getting no’s from clients and investors.

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26 Fundraising Questions for Startups

I have been an Internet entrepreneur since 2006. Co-founded and sold a small web hosting business. I am the CEO of WhoAPI and Webmaster.ninja. I also own 25 small websites in various niches.
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