Entrepreneurs who have had successful exits have a unique perspective on early-stage companies and founders' dilemmas. Here are tips directly from the newly-exited source.
A few years ago I became acquainted with Veev, the spirits company, through Carter Reum (one of the founders) at his home nestled in the Hollywood Hills. After driving a mutual friend from the airport to his home, I remember leaving with two bottles of vodka and a variety of Acai seed bracelets. It was really good vodka.
Since that day, I noticed the brand everywhere - it was more surprising to not find Veev at an event then it was to find it, and having signature cocktails at few hot restaurants around Los Angeles - it was a phenomenon.
Cut to today, Veev has grown into one of the most well known vodka companies in the U.S. and founders Courtney and Carter Reum have been honored by Goldman Sachs and Inc.'s 500 Fastest Growing Companies and 30 Under 30 for their entrepreneurial journey.
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Most recently, they have achieved every founder's dream - an acquisition - and are on to the next project, a fund called M13, that will focus on ideation, creation, and launch of startups. I had a chance to speak with Courtney Reum about this new venture and got some valuable advice to share with early-stage companies looking for investment - possibly even investment from him!
Between the Reum brothers, they have personal investments in companies such as SpaceX, Warby Parker, The Honest Co., Lyft and The Bouqs - so it's safe to say they know how to spot a winner. And the more insight the better when developing your fundraising strategy.
For so many of you, dear Inc. readers, raising money is on your immediate agenda. Even I am beginning to think about the funding strategy for my newest company, so it's important to keep these things at the top of your mind before you begin.
1. Everyone has an opinion
Years ago, a friend told me, "raising Angel money is more of an art than it is a science. If you ask five different Angels what they think about your idea, you are going to get five vastly different opinions." The higher up in the funding process the more it becomes numbers and strategy oriented.
In the early stages, you are selling an idea and yourself. You are answering the question, "are you the person who is going to execute this best?"
According to Courtney, the pitches they receive at M13 should have a mix the following to get his attention.
2. Identify two to three points of commonality
Surprisingly, many people still use the "spray and pray" method and abandon the idea of tactical pitching when they're rushing to get money. Spend the few extra minutes to read about the background of the investors you'd like to speak to. It shows.
"There is a fine line between annoying and pleasantly persisting," said Courtney. If you really know your audience and you've taken a moment to research what makes them interested in a product there is nothing wrong with following up and keeping them in the loop.
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3. Cold emails are totally OK!
According to Reum, if he's the right guy for the product (and you'd know this if you did your research) there is nothing wrong with a cold email if you truly have no one in common. It's always better to get a warm intro, but don't let it discourage you if you can't.
4. How will you scale?
Reum looks for companies with semi-frictionless scaling. Meaning, have you thought through all of the ways you could scale (and what could possibly cause friction?). Have the answers - and if you don't, perhaps it could be time to re-evaluate.
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5. Don't confuse urgency with rushing
Many, many, many founders make this mistake early on. I'd be willing to bet that at least every first-time founder did this at one point before learning the cold hard lesson. According to Reum (and I agree 100%), "moving with a sense of urgency to build, scale and execute your plan is a necessity, but the moment you rush, you miss key insights and potentially the window of opportunity to pivot. Thoughtfulness is the key to success."
Overall, there are many parallels between pitching to new business, media and investors, the key is to remember who you are talking to and what is going to appeal to them, and them alone.