Let’s talk about the psychology of the fund-raising process.

He called me on Sunday morning, it was a holiday. He needed to share the pain: the Japanese VC promised to transfer the funding money to the company bank account but recalled his decision without notification. The VC decided to wait for the next round to join.
The CEO has only couple of months’ salary pay in the bank. The feeling of lost, disappointment and shame was huge.

An incredible amount of investor capital is flowing the tech market. In the last month alone Israeli startups have collectively raised hundreds if million dollars with value estimation of over 10 Billon dollars.
The frequent media announcements of a large round of finance closing fill us with feelings of admiration, fulfillment, envy in those who succeed in benefiting from this flow of money, as if without effort or hard work.

But often, underneath the vail of glory of closing a round lays an exceedingly difficult mental and psychological reality. This is a dizzying period that tests the personal resilience of the founders and their ability to continue to hold a growth mindset while hearing “no” over and over again. This process forces us to deal with the internal voice that echoes over and over again: “I’m not good enough”, or: “the truth will come out…”, “I don’t have the killer look, the killer talk”.
The question lurks – “why others seem to succeed so easily while I don’t?”. The feeling of the CEO that everything is on her shoulders and she needs to deal with this on her own. Dozens of calls, tens of meetings, pitches, tough questions, turn-downs, “it’s too early”, “it’s too late”, “its not IT”
Some find asking others for money to be an unbearable position. They seed it as being needy, begging – putting them in a place they simply don’t want to be in.

So I want to tell everyone, as a psychologist who supports tens of founders as they go through rounds of fund raising: Everyone experiences these feelings. You are not alone. It is not only you.
It is indeed a very hard, complex and sensitive process. Part of it has to do with the product, the market, the technology, the story and the team. But part of it is based on your psychological state.

I won’t expand here on the strategic planning of the round, how to improve the deck and sharpen the pitch – all these are important. I want to focus here on how to strengthen your mental/psychological base in order to succeed in the round:

  1. Understand that you are not alone in this process. Everyone experiences these feelings and you are not unique. Everyone works very hard. Only the lucky few close a round without a deck on their second VC’s meeting. It’s like meeting a mother at the playground who’s baby began to sleep through the whole night at the age of one month. Da.
  2. Share the experience as much as possible so that you are not ashamed of the rejection. Talk about the frustration and the disappointment.
  3. Identify your internal voice, understand what it is telling you. Embrace and strengthening within yourself with positive and empowering voices, connect to past successes and wins. Choose to ignore or put aside the self-doubts.
  4. You are not equal the money you raised. You are much more than that. This is not what defines you!
  5. Learn from each experience, see every meeting as an opportunity to learn and grow even if the answer is negative. Seek to understand what they actually told you and what you can do to change and improve for the next time. focus on how you progress and improve from event to event (growth mindset) and not how in comparison to others you are less successful (fixed mindset).
  6. Understand that the VC market is dominated by men who have created a culture and a set of expectations of what they want to see in founders.
  7. Learn how to play the game. This does not mean to lie or betray your truth and say things that are simply not true. It does mean to practice the delivery, persuasion and cantered presence. It does mean improve, and polish the content, language, and presentation that the VC market has defined and expects.
  8. Build a support system of colleagues, peers, family, partners that help you to find your inner strength.

 Good luck