How This Tweet Got Me $2 MILLION For My Startup

A couple years ago, I was able to raise $2 million for my startup, all because of a single tweet. There are plenty of entrepreneurs who can raise money quickly because they already know all of the big VCs, but this was cold outreach to an investor that I'd never met before. But I knew this would work because I was using a three step framework that is pretty much guaranteed to get you a meeting with a VC if executed properly. Fundraising is often confusing and frustrating for early stage entrepreneurs, but it doesn't have to be. Follow the steps outlined in this video and you'll be having pitch meetings with plenty of venture capitalists in no time. I've raised money 10 different times now, and even though each time was slightly different, every successful fundraise follows this same fundamental pattern. Today I'm going to tell you how I raised $2 million for my company using Twitter. It's a pretty funny story actually. Here's the tweet that brought in $2 million. If it looks underwhelming, that's because it was designed to be. A venture capitalist had tweeted about some research that they were doing and I simply replied saying that they missed one important piece of the puzzle and I could help them. Even though that Tweet is only 17 words, there's actually a lot going on there. So let's break it down and work through what you need to do as an entrepreneur to win the attention of venture capitalists. Everyone thinks that they need to be a massive influencer in order to leverage platforms like Twitter to raise money, but that's just not true. Most entrepreneurs are far too busy to grow a serious following on social media. And and in an odd twist, growing a massive following can actually hurt your credibility. There's a great saying that goes the rhetorical style of any Twitter account that continues to gain followers converges on that of a fortune cookie. And I've certainly seen this in practice. Endless growth requires endlessly broadening your appeal, but that leads to a kind of lowest common denominator type of content that anyone can understand. Entrepreneurs need to be experts in their fields, and if you're working on something truly new and disruptive, there's a good chance that the industry is extremely small. Consider crypto. At the early stage, most of the conversation about Bitcoin was hosted on small forums and completely inaccessible to general audiences. You had to have strong software engineering chops to even follow basic discussions, but that was actually a positive signal to investors. So instead of becoming a fortune cookie account and constantly tweeting variations of Work hard and anything's possible. I've always focused on talking about complex topics where I can actually push the conversation forward, even though those tweets aren't likely to go viral anytime soon. At the time that I posted that tweet, I barely had a thousand followers. But you could quickly skim my profile and know that I had experience in consumer startups. And that was enough to pass a quick check by someone visiting my profile and wondering, is this person legit? So before you fundraise, it's important to really know your industry inside and out. You don't need to be creating loads of content, but if you're going to use a particular platform, it's good to establish a solid track record. And that's step one. Become an expert and people will want to hear what you have to say. There's a great saying that goes if you want to be interesting, be interested. When you're working on a new idea, you should be voraciously consuming information related to that idea. Sometimes this means taking classes on the subject, but other times it's just taking the time to read books, blog posts and technical papers to really understand where the cutting edge is in your industry. Once you know your industry cold and are ready to start networking with venture capitalists, it's important to focus on finding founder VC fit. A lot of entrepreneurs get caught up chasing celebrity investors, but that's actually a huge mistake for two main reasons. The first is obvious. Famous investors are flooded with pitches all day long so it'll be hard to break through the noise. But the second reason is actually more important here. Famous investors who don't know about your market or aren't interested in it are less likely to be helpful. It can be tempting to just look at the Midas list of top venture capitalists and think everyone on there would be an incredible addition to your company. But a VC who is focused on biotech may not be able to help at all with a crypto project and vice versa. You need to focus on finding investors who have specific experience in your industry. Look at who's funding companies that are like yours, and then start to follow and engage with these folks. And instead of just aiming for whoever has the biggest name, that's exactly what I did. When I was raising money. I stumbled upon someone who worked at Greycroft Partners who was hyper focused on direct to consumer e commerce companies. His name was Teddy Citron and he had only been in venture for a few years. He has a sharp eye for e commerce companies and new trends, but he's not exactly a household name in Silicon Valley, at least not yet. That didn't matter though, because I was focused on founder VC fit, not strictly big names. And this is step two. Engage with investors who are actually experts in your industry. When you find investors who are active in your industry, it can be tempting to try and pitch them immediately, but coming on too strong can often be a mistake. I always think of that scene in Star wars where Han Solo is flying past Darth Vader's ship.

Don't get jittery, Luke. There are a lot of command ships. Keep your distance though, Chewie, but don't look like you're trying to keep your distance. I don't know. Fly casual.

You don't want to look desperate for funding, but you also don't want to look like you're hiding the fact that you're desperate for funding. Just fly casual and start having actual conversations with VCs about what's going on in your industry. So that's what I did. I started engaging with Teddy on Twitter first by reposting some research that he'd done on the industry. He had essentially collected every subsector of the direct to consumer e commerce space and organized them into a massive Google sheet. His post had done well on medium and he certainly didn't need me to signal boost it, but this little shout out put me on his radar. My tweet only got three likes, but one of those was from him. Five weeks later I followed up by replying to his original post about the spreadsheet saying Love this post. There's one category you missed though. Happy to chat about it if you're interested. Teddy had clearly spent hours pouring over industry data, and he definitely thought that he had considered every possible segment. But I knew that he had missed one critical area, and it happened to be the industry that I was currently trying to disrupt. Big tobacco. My co founders and I had been grinding on our new idea, called Lucy, for over a year at this point, and we knew a lot about the tobacco industry. Cigarettes kill millions every year, but the tobacco industry still generates over $1 trillion per year. Year. A trillion with a T. Teddy had outlined dozens of micro industries with market sizes as small as $4 billion, but he had completely missed tobacco. There was good reason for this. No startups had really attacked big tobacco before, so there wasn't much buzz in Silicon Valley about the opportunity. That was exactly why we liked the idea so much. Smoking was a huge problem, and solving it would clearly have a positive impact while still being a Good. Good business. Now I could have just said, hey, you missed tobacco. You should add that to your sheet. But that strategy would have failed. Building intrigue is one of the most powerful communication skills. I try and do it in every YouTube video I make, first by getting you, the viewer, interested in what I'm about to discuss before diving into the details. I knew that anyone who had spent that much time researching e commerce companies wouldn't be able to resist the opportunity to learn about a new area that they hadn't considered before. This is step three Build intrigue around what you're working on so the investor wants to learn more There's a reason why murder mysteries are so popular. Just open up Netflix and you'll see dozens of shows about mysteries. Humans are hardwired to seek out answers to unsolved questions. It's basic human psychology. But I didn't just leave them hanging. I offered a clear solution. A way to make his analysis more complete and and learn about the missing category. Just chat with me. Adding a clear call to action there is critical Venture capitalists get flooded with requests for meetings all day long and their schedules are packed with back to back calls. The easiest way to get a meeting is to offer something of value in return. Setting time aside for a meeting creates a cost, so you need to offset that with a benefit. Every VC knows that most meetings won't result in a good deal. These meetings are risks that they take in order to find the next great company. As an entrepreneur, you can offset that risk by guaranteeing that they will learn something interesting that they didn't know before. Even if the investor winds up passing on the deal, they leave knowing more than they did at the start of the meeting. And that's valuable to someone whose job it is to understand markets. My plan here worked perfectly. I had established myself as someone knowledgeable in e commerce, found an investor who was uniquely interested in e commerce, and then piqued their interest and offered to help them expand their understanding of e commerce. Following these three steps will make cold outreach to investors way more likely to succeed. Investors get flooded with pitch decks to their emails all day long, so you need to stand out. Building relationships slowly and then leveraging human psychology to ensure that you get a meeting is vastly superior to spamming investors and hoping that they respond to you. When you start fundraising for your business, it's useful to think about the process like a funnel. At the top of the funnel you have all the investors who could possibly fund your business, but you need to narrow that down to just the investors who would be a good fit. Once you have that list, you need to get meetings with them. It's impossible to get an investment out of every single meeting. Even incredible companies like Facebook and Google had meetings where investors investors passed on the opportunity to invest. So your job is to make sure that when you reach out to an investor, they take the meeting. Following this three step plan will make sure that you get those meetings and don't waste your time reaching out to dozens of investors who just ignore you. Now to be fair, when I sent this tweet, I already had a pretty significant startup experience under my belt. I'd co founded Soylent and raised over $75 million for that business. But I really think that doesn't matter all that much. When I was still in college, I I used the exact same technique to get in touch with Jim Breyer, who had led the Series A in Facebook and I'd seen giving a talk at Stanford alongside Mark Zuckerberg in 2012. Breyer and his fund Excel partners were riding high off of the Facebook investment, but I was still able to chat with him on Twitter just by following his work and sending him the occasional thoughtful message. It was super inspiring at the time and a big reason why I felt that starting a company in Silicon Valley would be a great move for me. So regardless of your background, if you can become a true expert in your industry, investors will want to talk to you. It's really that simple. So get out there and start pitching, but don't look like you're pitching, you know, pitch casually. If you want to talk about fundraising strategy for your startup, just leave me a comment below or DM me on Twitter and please check out this recommended video. The YouTube algorithm thinks that you'll really like it.