Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, offers candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at firstname.lastname@example.org.
Q. I’ve built very nice relationships with some of my clients, some of whom have helped test and give feedback for my newest venture, an app in the same space as my consulting business (dating). Some of them do angel investing, or they know people who do. I’m currently fundraising for my app; is it inappropriate to ask them if they can help introduce me to investors?
—Founder of a new app
The answer is no, it is not inappropriate at all.
When people have an amazing experience with someone—and on something that matters—they are open to and excited about an opportunity to work together again.
I can think of few things more important than finding a soul mate. If you helped facilitate that, or helped your clients find happiness, they have a bond with you. You have already worked on something meaningful and purposeful, and now you should figure out what you can do together to help people find more harmonious relationships and make the world better.
Approaching these people to invest in your latest venture is not to take advantage of them or their connections but to continue to do impactful work together. I imagine some of what goes into your app is a result of the magic you created with them.
Don’t be afraid to reach out and ask them if they are interested in helping or if they can help you reach their friends. As you approach these people, make sure it comes across as a gift—not as an ask. This is an opportunity you have to work together again and build something amazing together. You could also offer these people something special, such as an advantage. This could be getting a discount to a future round if they invest now. (This can be through a SAFE—a simple agreement for future equity—or something else.) You can offer this to your former clients, as well as the friends to whom they introduce you. Just be sure to be fair. Everyone who comes in at the same time should get treated equally.
Like all founders, you have to have confidence when you approach people for money. You have to have so much conviction in your product and what you are doing that you are putting all your time and energy into it. You are fundraising with the intention of giving them an unbelievable return and reward. Yes, there is risk; more startups fail than succeed, but any potential investor will measure their appetite for risk, and it is their right to say no.
There’s a fine line between giving a gift and making an ask. I’ve found that giving gifts is a lot more fun than making an ask, but at the end of the day you still have to be bold and grow your business. Go after this the same way you have built your offering thus far, with the belief that you are bringing something worthwhile to the world and helping people improve their lives.