Seth Goldstein & Michael Simpson - The Secret of Raising Money


ou can raise money easily...
You just have to know the rules….

I opened the email and my heart rate skyrocketed. The message read:

“Hey Seth and Michael - I’m in for $200,000. I will sign and wire by Friday. Excited to be on board.” [investor name redacted]

Friday came... and Friday went. But no money showed up in our account...

Days later, the investor who sent the email told us he had to withdraw…

I was stunned. Seth was not...

See, I had assumed that when investors commit in writing, it means you will receive money. Not so. Thus began my education about how fundraising really works, and when I learned for the first time (of many) that “It’s not over until the money’s in the bank...”

My name is Michael Simpson. I'm a co-founder of DJZ and the co-author of The Secret of Raising Money, which I wrote with Seth Goldstein...

Seth has raised $100m over the last twenty years, has sold two companies, co-founded Turntable.fm and was Fred Wilson’s first EIR. So I was lucky to learn fundraising at the heels of the world’s best…

"SETH GOLDSTEIN: THE MASTER FUNDRAISER"

"Seth Goldstein has been a master fundraiser since I met him in the mid 90s. He has finally gotten around to sharing his secrets with the rest of us"

FRED WILSON, CO-FOUNDER OF UNION SQUARE VENTURES

But we don’t all have the good fortune of working with someone like Seth... Instead, we rely on blogs to help us understand what fundraising is like. But here’s the thing:

Tech Bloggers Create The Illusion That Fundraising Is Easy...

“Payments Startup Clinkle Raises $25 Million Seed Round...”

“Music platform Splice nets$2.75 million...”

When you read the tech press, it seems like everyone is raising millions of dollars all the time. That there is too much money to go round. That all startups are literally swimming in cash...

Reality is very different. The odds of you raising money from any given VC fund are around 0.5%...

For 3 years, Andy Dunn, CEO Of Bonobos, was 30 days away from being unable to pay his rent and 90 days from his company running out of money. He managed to stay afloat by raising tiny angel checks from 100+ angels.

The AirBnb founders famously sold cereal boxes in order to stay afloat…

Despite what the media will have you believe, raising money is a complex game with a specific set of unwritten rules. These rules can be broken, but if you walk into the process unaware of what they are, you stand very little chance of being successful….

I’m based in San Francisco, and many of my friends are entrepreneurs. Any time one of them goes out to raise money, I watch as the fundraising process takes over their life. Product development grinds to a halt…