This is the second post in our “fundraising out loud” series, which starts here.
I could feel my stomach clenching in anger as I watched the potential investor start to lose interest.
I kept smiling and asking questions, but inside I was fuming: “don’t they get it?! Our food system is in serious trouble without new solutions, and we’re running out of time!” When I hung up, I found myself tempted to call a friend to nurse the pain of rejection with a dose of righteous blame: it was the investor’s fault! But I knew in my gut that this wouldn’t help.
Instead, I had to not only pick myself up and move on to the next call, but also acknowledge the truth: it was my fault the call had gone horribly wrong.
This call happened a couple of years ago when we were raising Tenacious Ventures Fund I. Since then, I’ve talked to dozens of founders in the same situation: an investor call has gone badly, and they want to vent and blame the other side.
In agtech, it often sounds like this: VCs lack conviction for deeptech solutions; VCs just don’t get how agriculture works; and VCs won’t do the work to get comfortable with business models that push beyond common Silicon Valley templates.
I’ve also seen that most founders know how to move past blame, dust themselves off, and get on with the next call. And this is important, because there will always be frustrating fundraising calls and investors who just can’t yet see the world you’re creating.
But what I’ve learned is that fundraising is ultimately a sales process, and sales is about focusing on what motivates the person across the table. In preparation for raising Fund II, we’ve defined our target investor personas in a framework that helps us tailor our narrative for each conversation, focusing on what's important to the person across the table without losing our authenticity.
I’m sharing it here in the spirit of our commitment to “fundraise out loud” and in the hope that seeing a framework in action can help other founders avoid similar mistakes.
There are three overlapping drivers for why someone would partner with Tenacious Ventures.
Knowing what the drivers are, and how they intersect, can have a big impact on each call’s success.
My experience is that when I’m talking to someone who is motivated by all three drivers, the conversation goes the easiest as I can focus on “why Tenacious” and “why now.”
But only looking for people at the center of the diagram would mean missing out on potential partners who could add value to our community and help us unlock more impact. So while the sweet spot is all three, what I’ve learned is that I’m looking for investors who believe in at least two out of the three drivers, and that I need to adapt in real time to tailor my narrative differently depending on which two.
Persona #1 believes in the need for new approaches to innovation along food and agriculture value chains, and that emerging technologies and new business models are key.
Despite this, Persona #1 often struggles to keep pace with the rapidly growing agtech ecosystem, realizing it can be a full time job to scout and evaluate solutions, especially in less familiar areas.
The key to tailoring the narrative for Persona #1 is remembering that even though we believe that impact and returns are intimately linked, returns alone may be more important to them, and that’s ok.
Persona #2 believes that the next wave of billion- and trillion-dollar companies will be climate tech companies. They recognize that these mission-focused companies will have access to the best talent and will look for investors who have a deep understanding of the relevant technologies and market dynamics.
Though Persona #2 is focused on decarbonization, most of their investments have been in crowded sectors such as energy, smart cities, and mobility, rather than agri-food tech where you have to deal with complex natural systems.
Our focus when talking to Persona #2 is on the opportunities that exist in agri-food, and how our sector-specific model and focus on “agtech 2.0” de-risks access to this underinvested space.
Persona #3 believes in the imperative to decarbonize the food system as well as scale up ecological solutions. They also focus on solutions that can help farmers and value chains globally to adapt to climate change.
Persona #3 is often more familiar with addressing climate change through a not-for-profit investment model, and is often skeptical that venture capital firms are paying more than lip service to impact.
In tailoring the narrative for Persona #3, we focus on how unlocking the power of private sector solutions and incentives can accelerate impact, and build confidence by demonstrating how impact is in our DNA.
In fundraising, it's easy to focus on what drives you as a founder.
For me, impact and returns go hand in hand. I believe that the threat of climate change, combined with the potential of rapidly emerging technologies and digitally-native business models, presents a massive opportunity for transformation. Given most of my waking hours are spent trying to realize this opportunity, it makes sense that it’s tempting to focus on my personal "why" when I'm talking about what we do.
But not everyone sees the opportunity the exact same way I do, and getting angry at this doesn’t help.
Instead, flipping the story in my head from “they don't get it" to “it's not you, it's me” changed everything about how I’m going about raising money for Fund II. Now, when I notice the investor losing interest, rather than getting frustrated and feeling like I am out of options because "they don't get it," I can focus on all the options that I do have to tell our story in ways that address what’s important to the person across the table.
Of course, there are times where I still don’t get this right, but now that I am quicker to acknowledge that it’s me, not them. By taking responsibility for how my actions impact the outcome, rather than attempting to change something entirely outside my control (the other person), I have a never-ending opportunity to learn, iterate, and improve.
Because ultimately, while I can't control the investor across the table, I can control me.
To learn more about investing in Tenacious Ventures Fund II and our vision for a digitally-native and climate resilient food system, get in touch here. Early-stage agri-food tech startups looking for funding, reach out here.
Disclaimer: The information in this post is not investment advice or a recommendation to invest. It is general information only and does not take into account your investment objectives, financial situation or needs. Before making an investment decision you should read the information memorandum and seek financial advice from a professional financial adviser. Whilst we believe Information is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statue which cannot be excluded.