How NOT To Use Seedscout
(And General Rules For Raising Capital)
I am writing this post after seeing dozens of our paying users using Seedscout in the wrong way. I don’t blame them because as we’re building a new category, there is no right or wrong to use a product like ours in the beginning. Now that we’re several years into this company, I wanted to point out a few of the wrong ways I have seen our paying founders use Seedscout that I am hoping our current and future customers can avoid.
How Not To Use Seedscout
Aiming to Get a Quick Check
Some founders sign up for a 1-3 months hoping to get ROI in that span to justify continuing to pay. If you are an outsider to this industry, it could take you over a year to get your first check. Using Seedscout is not going to change that fact. Seedscout only opens the door but you still need to walk through and do the dance that is called raising capital. And getting the intro is the easier part of the process. So, if you are an outsider, do not expect to get your first check quickly. Which means budget accordingly. Seedscout is priced closer to a business conference than a SaaS tool for a reason.
Not Capitalizing on Every Meeting
When you do get meetings, are you doing what you’re supposed to be doing? Are you sending a deck/info beforehand? Did you do research on the person beforehand? Developing a relationship before pitching on the call? Setting a to-do at the end of the meeting? Following up after the meeting? If you aren’t doing these things, you are not getting the most out of Seedscout. Instead of wanting to get 100 investors meetings, aim for 20 and do them right. I promise it will be more effective.
Not Seeking To Build Relationships
Going back to the first point on this, many people use Seedscout because they want a check. Well, for better or for worse, this industry is built on that back of trusted relationships. People with trust built up where one is betting on the other. You are NOT going to get a quick check from a complete stranger. You WILL get a check from someone when they like you and you like them and you make an ask, they feel comfortable writing a check. So if it isn’t obvious, every single conversation you have on Seedscout should be a relationship-first lean. Sure you don’t need to hide the fact you’re seeking capital. You don’t need to hide the fact that you’re in the middle of a raise. But that should not dominate the subject of the conversation. In other words, you want to vibe.
Not Doing Your Own Research
Founders who join Seedscout treat the investor demographic data like gold (average check size, their interested sectors, etc). Truth is, when investors join Seedscout, they fill out their profile just trying to get to the end of the form, not being 100% thoughtful. So although we do collect data on the investors, I would ALWAYS do your own research by browsing Crunchbase, their website, and LinkedIn. And regardless, at the pre-seed and seed, SO MANY INVESTORS are generalists. Although they say they like B2B SaaS, I bet they would like Fintech or PropTech if they aligned with the founder. So refer to the data on Seedscout, but don’t treat it like the bible. Do your own research.
Not Taking Seedscout Native Data Seriously Enough
Contrary to the last point, there is data we collect at Seedscout that the investors don’t give us, but that we generate as they use the platform to help founders understand more about them. These data points include investor joined date, last engagement date, and Seedscout score. Join date means date they joined Seedscout, so you can target investors newer to the platform. Last engagement date means when they last engaged with an intro request, showing you the last time they were active. And Seedscout score is a reputation score to show you over their lifetime on Seedscout, how many intros have they taken, vs. not replied to, vs. invested in.
Not Leveraging The Seedscout Team Enough
Benny and I are here to help you. We’ve help faciliate dozens of checks, $3.7M in total, have talked to thousands of founders and investors, and are here to help you with you your raise. Every customer can book a time with us in their dashboard. If you have a questions about Seedscout, book a time. Want to talk through your raise? Book a time. Want to share your feedback on Seedscout? Book a time. We can’t help you if we don’t know what’s going on. Book a time and let’s get you going in the right direction.
Not TRYING to Looking The Part
Part of raising capital is looking like a company that has raised capital in the past. If you look too off the beaten path, you won’t get funded. There are things many of our customers do or have that have been historically non fundable. Examples being:
Non founder / CEO raising money
Raising at a “out of touch” valuation
Deck including exit slide it in
Appearing as desperate for money in every interaction
Having a company founded 10+ years ago that’s now raising money
Trying to induce unnecessary FOMO
Having an agency build your software
It’s not that any of these are dealbreakers, and this surely isn’t an exhaustive list, but every thing that screams yellow flag about your deal can quickly make it turn into a red flag. Through Seedscout, you should be able to learn what these things are and make the changes you need to make. If you are unwilling to, there’s nothing we can do about your inability to raise capital. You need to help yourself in order for us to help you.
Not Understanding the Power Of Network
Oftentimes when you’re on a call with someone from Seedscout, you may seek something from them. There are many times where they won’t be able to help you with your direct ask. Still, there is a very good chance that they know someone that can. At the end of each call, see if there is someone they can connect you to. Note, they may not be willing to but it’s always worth the ask. Networks are powerful, and every person you are talking to has one. Don’t forget that.
If I was going to summarize this whole post in three points it would be to manage your expectations, put in the work, and to be long term minded when meeting new people. If you can follow the point in this post, you will be more successful on Seedscout. I wish you luck building your relationships and hope it brings good things to you in the future. Not on Seedscout yet? Sign up today.