This Email Helped Me Raise US$1 Million
Be prepared to play the long term game
Raising money is a long term game. Don’t expect to raise money fast. You need to build a relationship with your future investor, and that takes time. It’s like getting married. Usually, people date for a while before so they can know each other better.
However, I didn’t know about that when I started as an entrepreneur. I used to see a lot of news about entrepreneurs raising money, and it looked to be fast and easy, especially in Silicon Valley. After two years of founding Cupcake Entertainment, my gaming startup, I had an opportunity to go there. I’m from Brazil, and that was my first international trip.
It takes more than 3 weeks to raise money
I participated in a 3-week program for startups in Silicon Valley. At that time, my company wasn’t profitable yet, and I was desperate to raise money to keep my company alive. The program I did was a paid one, which reduced my runaway. However, I believed that I was going to be able to raise money in 3 weeks. I was so naive.
During the program, I learned about the long term game that raising money is. I went to a lot of events and talked to a lot of investors. 3 weeks passed by, and I couldn’t raise money. The positive side is that during the program, I learned about the world of international accelerators.
I applied for the Startup Chile program, and after a few months, I was accepted. The program supported the startups with working spaces, mentoring, and US$40,000 (equity-free), which helped me keep my startup alive. During the program, I met more investors, and in the end, we were making money with our two games. We became a profitable company.
How can you build a relationship with investors?
During the Startup Chile program, I started to send a weekly report email to my three employees sharing the revenue of our two games. I always liked the idea of having transparency with the financial side of the company. Our games were starting to make money, so it was good for them to see how their work helped the company grow.
After Startup Chile, I joined another accelerator program. The program was called Game Founders, and it was focused on gaming startups. They supported us with working spaces, mentoring, and US$15,000 (for 9% equity). Because of the equity, I decided to add the program partners in the weekly report email. It was also good for them to see how we were doing.
After a few weeks of sending the weekly report, something came to my head: what about sending this email to all the investors and mentors I have met so far? The email was straightforward. It just had the revenue from the week of all of our games and some other small info. I already was sending it every week. It took me less than 5 minutes per week, as we had a spreadsheet with all our revenue data that showed us the numbers for each week.
How I validated the email
Every new investor and mentor I met I added to our email list. I wasn’t using any email tool like MailChimp or ConvertKit. I was adding all the contacts on a group on Gmail. Sometimes, someone asked to be removed from the list, as there was no option to unsubscribe. If the person wants to be out of the weekly report, it means he doesn’t want to help us.
Once in a while, someone replied to the email congratulating us on our numbers. However, I wasn’t sure if the weekly report was a good idea or not until I participated in an international event. Some people told me that they were enjoying getting the weekly numbers. I was surprised. The weekly report was really working.
We changed how we showed the email's info quite a bit since the first one I sent. We wanted the email to be easy and fast for everyone to understand our plans and how we were doing. We also asked for feedback, which helped us understand better what the people reading valued the most.
The payoff
At the end of 2016, we broke revenue records for 10 weeks in a row. Every weekly report we sent was a new victory. After sending the 10th email, one of the investors from the list replied saying that he wanted to talk to us. We had met him one year before. We talked to him and two months later, we raised US$1 million.
Even after raising money, we continued sending the weekly report. It was good for our team, investors, and mentors to see how the company was doing. Our goal was to sell the company eventually. Raising money wasn’t the end. We still had a road to run and relationships to build.
After we faced a crisis in 2018, where I fired 60% of my company, I stop sending the report for a while. When I came back, a mentor of mine called me to ask how I was. He told me that he thought more about my company when I was sending the weekly report. It was something fast for him to see. He usually talked more with me and asked how I was when I was sending the reports. That was nice feedback about how the report helped.
Remember, raising money is a long game
It was nice to see how the Cupcake Weekly Report helped us raise US$1 million. It’s important to emphasize that it took us much more than three weeks to close the deal with our investor. We met him in our first week of the Game Founders program, September 2015, and we closed the deal in February 2017. It was a long game.
If you want to raise money for your startup, be prepared to play the long game. You need to build relationships, and that takes time. If you want to be reminded more, you can try sending a weekly report to all the investors you have met, as I used to do.
