Note: I published a post titled “Relationship Management for Your Startup” on January 13, 2014at Tekedia.com. This post is inspired by that one, and portions of this post are exactly identical to the original. It appears the post at Tekedia is no longer online. This post updates that one, with lessons I have learned since that time and advice I share with first-time founders with whom I have the privilege of meeting as they embark on trying to build their startups.

How should an entrepreneur manage the relationship with investors who say “no” to that entrepreneur’s pitch for capital? As I have noted above, I first tried to tackle this question in a post in 2014.

Before I suggest an answer to that question, I will propose some assumptions.

1. The interaction between the entrepreneur and the prospective investors has been one of respect, and professional courtesy. In other words, you have not been treated badly or insulted by any of the investors you have met.
2. The investors you have met are honest people, who would tell you if there is absolutely no instance under which they would invest in your startup. They do not have to tell you why, although it would be great if they did.
3. Irrespective of how things play out now, there is every possibility that you will speak with investors at a subsequent stage of the current project you are working on, or, Insha’Allah, you will become a serial entrepreneur who seeks funding for a new startup in the future.

If my assumptions hold true, then it does not work to your advantage to “cut-off” an investor just because that investor did not fund your startup during your current round of financing. This is especially the case if that same investor might be able to invest in your next round of financing – for example, a venture fund which makes institutional seed-stage and series A investments, but which passed on your seed-stage round of financing.

Every venture capital fund’s primary responsibility is to make money for its limited partners. Venture capitalists do not invest because they like an entrepreneur or an idea, or because they feel obligated to provide capital. No. Venture capitalists invest in entrepreneurs and startups that they believe will make them money, lots of money . . . enabling them to fulfil the obligations they have made to the LPs in their fund.

It is your responsibility as the entrepreneur to connect the dots, and to help the investor understand how they will achieve that aim by investing in your startup. That is a very difficult task. Dealing with the inevitable rejection that comes with fund-raising for an early stage startup is jarring, for anyone . . . and it is especially so for first-time founders.

Are there any hacks that a first-time startup founder can use to make the journey less fraught with frustration? I think there are. Below, I share some suggestions.

Preparation is key; It is better to be over-prepared than it is to be under-prepared.

It is easy to assume that one will be able to tell one’s story in a way that makes sense to one’s audience. That’s a fatal mistake. If fundraising is important for the startup’s survival then founders should practice the pitch . . . Fundraising is about narrative and storytelling. Founders must practice telling the story until it becomes second nature.

This involves both qualitative and quantitative aspects of the startup’s story. It is important to note that this kind of storytelling differs from others in the sense that a startup founder seeks to persuade the listening audience to take a specific action that will work to the startup’s benefit. Write a check. Become a user. Become a customer. Spread the news about the startup’s product. I do not know if there’s a recommended amount of time that one should devote to preparing for something of this sort. When founders ask me privately for help preparing for a do-or-die pitch that is a few months away in the future, I recommend 80 – 100 hours of preparation; something like 1 or 2 hours of daily preparation devoted to making sure they know the story inside-and-out and that telling it is as normal as breathing. I also recommend that they practice delivering the pitch to different types of audiences to get input on the delivery from different points of view.

When founders ask me privately for help preparing for a do-or-die pitch that is a few months away in the future, I recommend 80 – 100 hours of preparation; something like 1 or 2 hours of daily preparation devoted to making sure they know the story inside-and-out and that telling it is as normal as breathing. I also recommend that they practice delivering the pitch to different types of audiences to get input on the delivery from different points of view. Toastmasters International is a useful resource for this, but founders will need more than Toastmasters offers.

Research is key; Know who you should be talking to.

It is easy for a first-time founder to get suckered into thinking it’s imperative to speak with “every investor known to mankind” . . . Meeting lots and lots of investors can really give a founder’s ego the kind of massage that market realities aren’t willing to dish out without herculean effort from the startup. Also, an investor’s willingness to “meet for coffee to discuss your feedback on our model and your perspective on the opportunity” can seem like positive confirmation that the founder did not make a huge mistake by pursuing this goal of creating something from nothing.

Here’s the thing; That is not always true. Often an investor might just want to find out what’s happening in a given market, and coffee with a founder who has initiated the meeting is a low-cost way of getting educated by someone who’s currently and actively solving problems in that area.

Obviously, the opportunity cost of such a meeting is far higher for the startup founder than it is for the investor.

What is a founder to do? Think carefully about which investors have the highest propensity to invest in the startup; at this stage, given its current levels of traction . . . within the timeframe in which the startup must raise capital. Create a short-list and focus primarily on those investors who fit the bill. This is easier said than done since investors do not often state their investment parameters publicly.

That said, for founders in the United States there are a few tools one can use. Shai Goldman, currently a managing director at Silicon Valley Bank, has created an open-source GoogleSheet’s document that is a good starting point. Samir Kaji, currently a managing director at First Republic Bank, has also created a body of research on micro-vc that is another great starting point.

These two pieces of work complement one another quite well, and should be every first-time founder’s BFF every weekend after the decision to build a startup has been made. There are other pieces of information that a first-time founder should use. These two are especially key . . . but also most likely to be unknown to most first-time founders. I maintain an email I send the founders I encounter who evidently could benefit from having these resources at their fingertips. I will post links to those resources at Hack Your Startup: Pitch.

I spent some time explaining why this matters in The Path To Disaster: A Startup Is Not A Small Version of A Big Company – The Office Hours Remix.

It’s nothing personal, it’s just business; Manage your investor relations with email.

After every meeting with a potential investor, or quite frankly, with anyone who could be helpful to your startup in any way, I think it makes sense to ask if they would be willing to be added to a “Friends of Awesome Early Stage Technology Startup” email distribution list. The most common response will be “Yes. Please add me to your distribution list for updates.” These updates will be very general in nature and should be a stripped-down version of the email updates that investors in the startup get. No confidential information should be included in this email – only information you do not mind being in the public eye.

While the periodic updates are interesting on their own, to my mind they are not the point of this exercise. The primary purpose of this exercise is to split the universe of so-called “Friends of Awesome Early Stage Technology Startup” into three categories.

First; the people who unsubscribe from the updates. I do not know a more explicit signal that they have no interest in what the startup is doing but simply did not have the courage to tell the founder so directly. There’s no point devoting much more energy pursuing these people.

Second; the people who have not unsubscribed but have never engaged directly based on a prompt in any of the periodic updates. It is probably worth sending people in this group an email saying you are going out to raise a financing round for which they might have interest based on developments since the previous round . . . If they do not respond after two or three attempts . . . Move on.

Third; the people who have engaged with the founders after an update was sent. Perhaps the startup needed to hire an engineer and they responded with a recommendation or offered to share the job description with their network . . . They have demonstrated some interest in what you are doing. Even if they do not invest themselves, they are likely to be a positive reference to someone else for whom there’s a better fit. Focus on these folks.

These 3 suggestions are the big ones. I make other suggestions to founders I meet in person. Those are minor in comparison. For example, don’t let a friendly investor who passed on investing in a prior round for a specific reason find out about a new round in which they might still be able to invest with only a week left before your anticipated close. It’s unlikely they can conclude their due diligence that quickly.

It’s not personal Sonny. It’s strictly business.                                          – Michael Corleone, The Godfather

Financing a startup’s operations is a crucial part of every founder’s responsibilities . . . In fact, it might be the most important. If financing from external investors is part of the plan, then founders need to find ways to make it less of a hit-or-miss affair. I hope these suggestions provide some food for thought about how to do that effectively without spending an inordinate amount of time.

Further Reading

1. When The VC Says “No” – a great discussion by Marc Andreessen. You must read this.
2. Dear Dumb VC – a post by Andy Dunn, the founder of Bonobos and Red Swan Ventures.
3. As Populist As it May Seem, 98% of VCs Aren’t Dumb – a rebuttal by Mark Suster of Upfront Ventures.
4. How LinkedIn First Raised Money (and Endured Rejection) – a post by Lee Hower.

The majority of sub Saharan countries have no access to reliable weather forecasts, which is a serious constraint for farmers’ planning and timing of farming activities (e.g planting). The lack of accurate forecasts is particularly distressing given the recent changes in weather patterns, exacerbated by global climate change, negatively impacting traditional farming practices, where indigenous knowledge is no longer relevant.

As a result of climate change, large parts of West Africa is experiencing changing weather conditions and increasing occurrence of extreme weather events (e.g. floods and droughts). These changes are disrupting typical farming patterns, and a lack of knowledge of how to protect against effects makes smallholder farmers particularly vulnerable.

This is where iska comes in.

iska is built on a disruptive technology allowing for much more accurate prediction than seen before in West Africa. Iska™ has shown an 84% accuracy rate over 2 rainy seasons during 2013 and 2014, compared with global competitors that only reach 39% in West Africa.

Unlike most weather service providers, Ignitia does not only repackage existing weather forecast data for customization, but has developed its products from scratch; since no reliable weather forecast system existed in the region.

The governing physics driving the tropical atmosphere differs from existing model practices and occurs on a different scale. Ignitia’s tropical weather forecast is based on proprietary algorithms developed over 15 man-years by its scientists.

Iska was created by Sweden-based Ignitia, and it came second at the first Agricultural Innovation Investment Summit run by USAID held in Washington, DC in June.

Ignitia now wants to expand into other West Africa countries using a $2.5 million grant from the Securing Water for Food challenge funded by the governments of the United States, Sweden, South Africa, and the Netherlands.

The board of telecommunications equipment giant Ericsson has forced its CEO, Hans Vestberg, to step down today with immediate effect after the board agreed that he wasn’t the person to turn Ericsson around.

Ericsson said that Vestberg, who led the Swedish firm for seven years, would be replaced in the short term by chief financial officer Jan Frykhammar.

It’s a tough period for the company that had sacked thousands of workers this year alone following the stagnant nature of the market for its product. In addition to the lay offs, it added that it is still looking to drastically cut costs.

President Muhammadu Buhari has nominated Akintunde Ibitayo Akinwande, a professor in the electrical engineering and computer science department of the Massachusetts Institute of Technology (MIT), as the executive chairman of the Nigerian Electricity Regulatory Commission (NERC).

He is a professor in the electrical engineering and computer science department of the Massachusetts Institute of Technology, Cambridge, MA. He received a B.Sc. (1978) in electrical and electronic engineering from the University of Ife, Nigeria, a MS (1981) and Ph.D. (1986) in electrical engineering from Stanford University, Stanford, California, according to his academic profile.

He joined Honeywell Inc. in 1986 where he initially conducted research on GaAs Complementary FET technology for very high speed and low power signal processing. He later joined the Si Microstructures group where he conducted research on pressure sensors, accelerometers, thin-film field emission and display devices.

Akinwande joined MIT’s Microsystems Technology Laboratories (MTL) in January 1995 where his research focuses on micro-fabrication and electronic devices with particular emphasis on smart sensors and actuators, intelligent displays, large area electronics (macro-electronics), field emission & field ionization devices, mass spectrometry and electric propulsion.

He is a recipient of the 1996 National Science Foundation (NSF) Career Award. He has served a number of technical program committees for various conferences, including the Device Research Conference, the International Electron Devices Meeting, the International Solid-State Circuits Conference, the International Display Research Conference and the International Vacuum Microelectronics Conference.

Akinwande holds numerous patents in MEMS, Electronics on Flexible Substrates, Display technologies and has authored more than 100 journal publications. He was a visiting professor at the Cambridge University engineering department and an Overseas Fellow of Churchill College in 2002-2003. He is a current member of the IEEE Nanotechnology Council.

He is from Offa, Kwara state.

The commissioners:

Musiliu Olalekan Oseni (south-west nominee): BSc economics (first class) from University of Ibadan in 2007; MSc energy economics and policy (with distinction) from University of Surrey, UK, 2010 and PhD in business energy economic in 2015 from the University of Cambridge, UK. His doctorate thesis was on “Self-Generation and Payments for Quality of Service in Electricity Markets”.

Dafe C. Akpeneye (south-south nominee): A 2001 law graduate from Obafemi Awolowo University. Currently the Director, Regulatory Services/General Counsel, West Africa for PricewaterCoopers Nigeria.

Okafor Frank Nwoye (south-east nominee): He is a professor in the department of electrical engineering, University of Lagos. He is a specialist in power systems and control.

Sanusi Garba (north-west nominee): Bsc engineering, ABU, Zaria, 1974; master’s in industrial management, University of Birmingham, 1980.

Nathan Rogers Shatti (north-east nominee): Former commissioner for finance in Adamawa state. Fellow of Chartered Accountants, Shatti was formerly with Exxon Mobil in several countries in Europe and East Africa before becoming manager, treasury and banking services in Mobil Oil Nigeria PLC in 2006. He graduated in accounting from ABU in 1990.

Moses Arigu (north-central nominee): Currently the GCS Partner vice-president (capital markets technology and operations), Royal Bank of Canada. Before then (between 2007 and 2010), he was with JPMorgan Chase (Investment Bank, New York). He was also with Credit Suisse (Swiss Bank, New York), from 2005 to 2007.

Verizon acquires Yahoo for $4.8 billion. The US wireless carrier has been expanding online content and advertising since last year’s AOL deal, and sees value in Yahoo’s billion users, even though other investors do not. The deal will be announced before markets open in New York.

Under the deal Verizon will get Yahoo’s online assets including search, mail and instant messaging, along with its ad technology. Various real estate holdings will also be included.

We hope they keep the name Yahoo!