Over the last few months, as I finished the fundraising for Backupify, my perspective has changed a lot. On the one hand, I was able to raise money without a business plan or any financial projections. That felt good. On the other hand, I learned some things that changed my perspective on the fundraising process. When I go through it again for our next round, and for future startups, I will approach it much differently than I did this time. So I thought that now, while these thoughts are all still fresh in my head, it would be good to write about my experience going from a newbie to the VC scene, to the CEO of a VC backed company. If I wait too long, I know I won’t remember things correctly, so this post is about what I learned and what I would suggest to those of you going through it for the first time.

There Is No Right Way To Do It, But There Are Wrong Ways
Posts that tell you what VCs look for should be taken with a grain of salt. In my experience, they all look for different things. At best, that post tells you what that particular investor wants in a company and team. I sat in front of VCs who thought I was crazy for not having a business plan. I was asked “how can you run your business if you don’t have a written plan?” I also sat in front of VCs who said “glad you didn’t waste time writing a plan, because we wouldn’t read it anyway.” It’s really more of an art, not a science. It’s kind of like dating. What I mean by that is…

It’s Not About Convincing Them, It’s About Whether There Is A Natural Fit
I always thought the goal was to be so smart and savvy in the presentation that some skeptical VCs would be won over by my impressive arguments. It doesn’t work that way. They either like you and your idea, or they don’t. It’s like dating because your goal in dating is not to convince someone who is a bad match for you that somehow you are really a good match. That’s a recipe for divorce. It’s really about finding the person that is naturally a good match. Same way with investors.

A perfect example is to look at the questions I got after each presentation. If someone said “interesting, but why does anyone want to backup Twitter?” I knew instantly they weren’t a fit. They saw the small version of Backupify. They saw where it was, not where it could be. The people who eventually invested realized after just a few slides that it wasn’t about backing up Twitter at all.

Look For Vision
The best thing that can come from your presentation is lots of ideas generated by the potential investors. When investors start asking questions like “what if you could do X?” or “have you thought about creating a feature for Y?” that is a really good sign. It means they get it. It means they can add value. It means they are a good fit.

Moving the Needle Trumps EVERYTHING Else
I’ve been involved with startups that spent months working on a business plan to go out and raise money. And I’m not knocking plans overall. They can definitely be a great exercise in thinking through your company. But the single biggest thing you can do to impress these guys is go out and move the needle on your business every day. Mark Suster says entrepreneurs need to Just @#$% do it, and I couldn’t agree more. There are so many people who think they want to be entrepreneurs because it sounds fun to run your own company and “be your own boss” (which isn’t true anyway), one good way to weed them out is to see who can move the needle without many resources. All VCs know you could do more if you had a boatload of money, so to go in whining that “we can’t do anything because we don’t have money” is a waste of time. Figure out how to maximize what you have. Investors see all kinds of people who have day jobs, little free time, little spare cash, but big ideas. Most of those people don’t move the needle. Others figure out how to do it. Those people get funding.

At Backupify, we did whatever we could with the little cash we could scrounge up. We got free labor at times, we used whatever connections or resources we could find, we nagged people to help. At times, I felt embarrassed showing the product to people because it sucked so bad. But look, even if you have no cash, you always have time and creativity. Find a way.

When I presented at the Open Angel Forum in L.A., I told investors if they were interested they had to talk to me before 10pm (the presentations ended at 9, I think) because I was leaving to catch a redeye to Boston for a morning presentation to a VC firm. Somebody in the back yelled “I love it.” Many of these angels were in your shoes once, and they love to see you display the same suck-it-up, gritty determination that made them successful. Show them you are going to do whatever it takes. Move the needle. Eventually someone will fund you.

Practice, and Listen
I did my presentation a BUNCH of times. The first time I presented to an investor group, I had 30 minutes. I went 40 and only got through half my slides. Each time it got better. Each time I revised the slides to make them clearer. It was boring as hell, but it’s exactly what you have to do to get better. It’s the same stuff you do on the product and marketing side, just apply that mindset to your slide deck. And most importantly, listen to the feedback. Early stage investors see tons of startups, and as a result, they build great filters for what works and what doesn’t. They aren’t always right, but their experience in the meta-patterns around what you are doing may be helpful, so give it serious consideration.

Be Yourself
David Cohen commented on my drinking a beer during my OAF presentation. It’s not something I would generally recommend that you do, but for that specific event, it just fit. It’s very tempting to listen to potential investors tell you to be this way or that way, but in the end, you have to be yourself and you have to be comfortable around them. Once you get funded you have to make lots of hard decisions and the last thing you want to do is built fake rapport with investors, because that is going to lead to lousy discussions about serious problems.

The point of all this, and the reason I wanted to dump this out of my brain while it was fresh, is that many of the people who write about startups have either been it so long (or else have never been on your side of the table) that they look at it through lenses that won’t work for you. Don’t think that there is some magic bullet, some secret phrase you can say or slide deck order you can use that will make it easy to raise money. It’s never easy, not even when you have a good idea. That’s the point. That’s why so few people ever do it. That’s why the best thing you can do is to accept that and just trudge forward trying and trying and trying.

Reading about things and doing things are very very different. If you want to learn to raise money, the best thing to do is go try to raise money. It will suck. But at least now you know you can skip that business plan.

I flew to L.A. the night before the event to present Backupify, and spent part of that Thursday with one of our integration partners. I spent the rest the of the day tweaking my presentation based on feedback from Jason and Tyler (chief strategy guy at Mahalo).

The event was held in Bel Air at the house of a successful entrepreneur, and I’m not sure what I can disclose about that, so I won’t say any more except that the house was awesome. Jason even joked that we could probably fund our startups by stealing just a couple decorations from the house. The entrepreneurs all arrived early and we gathered in one room of the house and exchanged business cards, notes about funding, and pitches about each company’s business. Companies included Tiger Tag, Wakemate, Citysourced, Postabon, and of course, my online backup startup.

The angels gathered outside on an open patio with lots of food and booze. It was a rockstar group including Chris Sacca, Ron Conway, Mark Suster, and some people representing early stage funds. The angels mingled while Jason and Tyler talked to the entrepreneurs about how the pitches would work.

Backupify was the second company to pitch and at the last minute I scrapped my slides and just went through a product demo. I also took a beer with me when I went up to present which seems a little odd when you think about it but it fit the mood of the event. (Plus I can’t get Fat Tire Ale at home, so I snapped it up while I could.) Pitching to this group was awesome because they get it. They understand companies at this stage and they asked great questions. They automatically saw the bigger vision most of the companies were shooting for, and didn’t ask a lot of questions about financial projections and business plans and stuff that really should be left for a later stage.

The format was 15 minutes per team, with the last 5 allocated to questions. When the event was over, the angels and entrepreneurs mingled. My only feedback to Jason and Tyler is that at future events they make it more clear how interested angels should interact with startups. There was a little confusion around that issue but in general, angels started talking to the companies they liked.

All in all, Backupify was contacted by 8 angels over the next week, when we really only needed 2 to finish out our round. So overall, from my perspective, the event was a huge success. Jason is extremely pro-entrepreneur, and in addition to contacts and funding, the night was filled with good startup stories and advice for building companies at this early stage.

I realize the angel superstars that attended this first event won’t make every OAF, but overall, I think the quality will remain high and future chapters of OAF will be a huge success.