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How Many Investors Does One Need To Close a Round?


Written by: Ash Narain and Apoorva Puri  | Marquee Equity

40–50 is the average number of meetings it takes to raise a $1M+ round of capital.

No matter who you are or what round you’re raising, most people are going to pass on investing. That’s just how fund raising works.

There have been examples of billion dollar + companies that initially had to meet 200+ investors to close their initial round.

Inmobi — a Softbank backed unicorn which started in 2006, was initially passed by hundreds of investors before raising capital from KPCB and haven’t looked back since.

Here is a quick read on Inmobi Founder, Naveen Tiwari talking about how VCs weren’t excited about their space in the initial years, leading to a tonne of rejection.

Here is Brian Chesky, Founder of Airbnb, which is now valued at $30 Billion+, sharing a few of many rejection emails they got from investors while trying to raise their seed round.

Here’s a quick read about Josh Hix, Founder of Plated, who initially were turned down by 200 investors before getting a yes and who went on to raise $100M for his company and later sold it for $300M

So, fundraising by nature works in a way where most people say no for various reasons and which is why you need to come up with a list of 40–50 investors who are relevant to you. You can ascertain their relevance by

Just like sales.

Like any sales process, fundraising requires a funnel of interested investorsand a working of that funnel to reach a buying outcome from one or more people in that funnel.

How many investors should you be talking to?


Ideally, you want to have 40–50 qualified and interested investors in your funnel.

Once you have them, they should be graded on the basis of their relevance to what you do, their stated interest, the value they bring in addition to the capital and alignment of vision, as shown in the image above.

As you move further into the “VC decisioning process”, most of these investors, for various reasons, will either slow down on their engagement with you or drop out for the current round — and that’s how it’s supposed to be.

You need to prioritise them by their engagement levels (more on how to gauge that).

The VC decisioning process:

The Great First Meeting + Getting Ghosted after

The first meeting with an investor is where you introduce them to your company and get introduced to their firm.

You will find most investors to be super friendly and polite during this first meeting.

It is much harder to get a prompt second meeting with the same investor. Most investors will usually invite you in for a second meeting 9–12 months after the first one, to get an update of how things have progressed at your end.

So, entrepreneurs report having had excellent first meetings with investors, only to be “ghosted” by them for months on end.

However, even investors who are genuinely interested in pursuing a deal with you, could take time to move forward — leaving you feeling ghosted.

Please note, them not responding immediately to emails or not giving an immediate second meeting are not signs of them not being interested.

While your company and raise are the centres of your universe, their attention is divided in several directions and you need to keep showing up to keep their interest alive and to move the process further.

Here is a post from the legendary Mark Suster of Upfront Ventures — about how VCs spend their time and how to keep them engaged

And as Mark says in his post and I quote:

“If you didn’t have chemistry on the first meeting it may not be able to be salvaged. Sometimes there just isn’t a fit. But if you had a cracking meeting and know that they loved you … don’t take the love for granted. Get back in front of them and remind them why they loved you in the first place. Again and again and again until the cash is in the bank.”

That being said, there are a number of indicators that help you gauge investors

How do you know an investor is engaged?

There are many signs that can be read in order to gauge an investor’s interest. It is important to be mindful about said signs as they can help you in grading investors and figuring out how to allocate your most precious commodity, your time.

A more pronounced sign is obviously landing a second meeting or a follow up phone call, asking you to meet their portfolio companies or a colleague can also be positive signs of engagement.

Other indications include — wishing to speak with your customers, wanting a product demo or a financial walk-through.

Once you manage to grab their interest it is crucial to hold it till the bottom tip of the funnel.

It seems pretty obvious as to why you should not put all your eggs in one basket and keep feeding the top of the funnel, but you must also keep in mind that the a bird in hand is better two in the bush.

The end of the process is when the investors make up their mind if they want to invest their time and money in you and hence it is of utmost importance that you do not let the engagement run dry.

It is essential to address all their concerns — keep them updated about new product development, present them with new analysis of your pricing strategy, future revenue projections, etc. Remind them what got them interested and that you are worth it!

An Amalgamation of Sales and Marketing:

A successful round of fundraising is a harmonious blend of sales and marketing. We have spoken extensively about sales but the value of marketing cannot be underestimated.

An article on platforms such as the WallStreet Journal, TechCrunch can help you secure a second meeting with a potential investor.

Marketing is a powerful tool that can be used to steer the investor’s interest.

The Bottom Line:

Have enough relevant investors in your funnel and prioritise those who are most likely to get on board with you and keep them engaged throughout the process.

Need help building your investor funnel?

At Marquee Equity, we have created a cost and time effective, one stop solution for entrepreneurs to get investor ready and then meet the best investors in the world — in a private one to one setting with investors as opposed to a banker or a platform.

Equally effective from Seed-IPO.

Track record — 750+ fundraises in 18 months, with $3 Billion+ in deal value with several success stories in Silicon Valley, New York and beyond.

If you’re in the process of raising or closing a round, or building your decks and models, we can help you get there faster.

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