How to raise $10 million as a sustainable business
Starting any company is hard. Starting a company with the goal of making a positive impact on people and planet can feel nearly impossible. Over the past few years of building my sustainable food company, Kuli Kuli, my greatest challenge has been convincing investors that we were both good for the planet and worthy of their pocketbook.
I’ve now raised $10 million in investment from many of the best-respected impact investors and venture capital firms, and from two multi-billion-dollar food companies, Kellogg and Griffith Foods. But raising these millions has not come easy.
Starting my company as a 22-year-old Peace Corps volunteer left me without a pile of cash to tap into or a network of wealthy friends. I turned building a network into my job. I attended every networking and pitch event I could find, refining my pitch with every piece of feedback I received. I made a point of researching the potential investors in attendance before the event started and setting a goal of striking up a conversation with each investor before the event ended.
By far the most valuable fundraising skill that I’ve acquired has been the art of really good follow-up. Immediately following my conversation with a potential investor, I jot down any relevant details, often scribbling on their business card or taking notes on my phone. I write down the usual follow-ups, such as sending the pitch deck. But just as important, I record personal details such as our shared love of marathon running, or the fact that their daughter is about to graduate from high school, allowing me to send a uniquely personalized follow-up.
When done well, fundraising is friend-raising. At the end of the day, people invest in people they like. Most people like people who are like them. It’s the same reason that middle school lunch halls are often segregated by gender and race. We like to be around people who look like us, think like us, talk like us, vacation in the same ways we do. When you’re different, you have to go the extra mile to connect.
Despite how carefully I write these follow-up emails, I never expect the investor to respond. Most busy people don’t respond to the first email they receive. I use a system called Boomerang to schedule these emails to return back to my inbox in a week if unanswered.
My second email is equally thoughtful, but much shorter. I reach out and send an article, either an article about Kuli Kuli, moringa or an article relevant to a topic we’d discussed. If possible, I try to find something that connects back to one of their interests. For example, if we’d discussed trail running, I send them an article about the top 10 Bay Area trail runs with a personal note about a trail I’d enjoyed. I Boomerang this email too, this time setting it for three weeks away.
My third and final email is a question. I emphasize how much I’d enjoyed our conversation last month and ask if they’d be open to connecting in the future or if they’d prefer that I not contact them again. I don’t Boomerang this email, believing that if the investor doesn’t respond after three emails that there is a very little chance that they will invest.
I log in a spreadsheet every person who answers one of my emails. I categorize them as potential investors, advisors or sales prospects. I write down all the relevant details from my conversation with them and any email conversation we’ve had.
Getting to know you
Investors often say, "I’m not interested right now, but keep me updated." I’ve found that taking them up on this offer is absolutely the best way to get them to invest in you. People want to feel like they’ve gotten to know you. They want to have an understanding of your challenges and successes before they’ll write large checks. I use this potential investor spreadsheet to send out quarterly updates, paring down the financial information but giving enough meat that people understand how we’re growing.
My last fundraising tactic is to always introduce scarcity into a fundraising round. I never open a round until I’ve gotten at least half of it verbally committed, and then I do everything I can to "oversubscribe" it by raising more than the originally published goal. Everyone wants something that they can’t have. I use my email list to build momentum within the round before I publicly open it.
Although it takes persistence, I’ve found having value-added and mission-aligned investors to be a key part of Kuli Kuli’s success. I hope that someday they’ll be able to tell all their friends that investing in a green business was the best investment they ever made.