A lot of you have probably heard the advice to fail fast. I am a big supporter of this idea. It's something that a lot of first-time founders and young entrepreneurs have a hard time embracing. I know I did.
The challenge comes when you enter the unpredictable world of entrepreneurship after succeeding in very regimented disciplines like junior sports, math competitions, traditional schooling, and large company promotions. The idea of failing is anathema, especially among people who also grapple with imposter syndrome.
But failing is, as you’ve probably heard in a lot of cliché advice, your gateway to true evolution and transformation. Failing allows you to see what exactly doesn’t work and pushes you to the point of improving yourself and your company.
In the pursuit of product-market fit, failing fast is essential. You may have convinced yourself that the design in your head is flawless, but the only way to discover what the market actually desires is to place your failing product into a customer’s hands... as fast as you can. Once you experience the failure, you can collect feedback, fix the parts that didn’t work, and have a chance to launch an iterated version again.
The concept of failing fast also applies to fundraising. One of my fundraising keys is pursuing “calendar density” in your first meetings. A tightly packed week or two of meetings helps create an environment that adds a positive signal to the process and encourages investors to move faster. Knowing that other investors are simultaneously considering your deal is a powerful psychological influence. In addition, the back end of those processes, no matter the outcome, is far superior. They cause a fundraise that is going to fail for whatever reason to quickly fail. No wasted time in the “fast fail”.
Don’t be afraid of the “fail” part of “fast fail.” It’s better than the alternative slow-death fail that I see many fundraises suffer through. This is when a founder finds one or two investors to pitch, then searches for the next targets to pitch after a pass and daisy-chains a process together.
This is a recipe for a slow, painful fail. In this scenario, a founder is always one-off pitching investors hoping to convince them without the competitive pressure of a herd. Even when done successfully, the founder wastes time and has zero negotiating power when they finally find an interested investor.
When I run into these situations, I almost always advise the founder to pause their fundraise. Stop fundraising and dedicate themselves to reaching a new milestone within the business. Even the tiniest of milestones allow a narrative change which you can package back up and use to start again.
Failing fast in the fundraise allows founders to reset the narrative, compile a refreshed list of investors to go after, and then go back out with a stronger, more organized push. Although slightly scary, it is far better than bleeding out.
Fail fast in fundraising.