Fundraising Is Not a Numbers Game

Moshe Rivodeaux
5 min readMar 29, 2023

As someone who has raised money for multiple startups and deals and now runs a CleanTech Venture Studio, let me tell you that most people are clueless when it comes to fundraising. They’re all like, “Look at my amazing company!” and “This market is HUGE!” without considering what the investor really cares about. It’s like trying to get a date by just talking about yourself and not asking any questions about the other person. Spoiler alert: it doesn’t work.

This is a crucial mistake that can cost you the funding you need to take your business to the next level.

Pitching vs Making a deal

Don’t pitch. Make deals.

So what’s the difference between pitching your company and making a deal? Well, pitching your company is just one part of making a deal. In order to make a deal, you need to know how to sell it. You have to emphasize what the investor will get out of it.

Simply explaining how big the market is won’t cut it. More than 90% of companies fail within three years, anyway. Therefore, you need to explain not only your capital journey and how you plan to capture the market, but also how that will affect the stock, how the investor will recover their returns, and what benefits they will receive, but most importantly, you have to show how investing in you is aligned with what THEY believe.

When it comes to building relationships, it all boils down to understanding the investor and what motivates them. This means shifting the conversation from yourself to them. Start by talking about the investor first, ask questions, and try to understand their values, goals, and personal motivations. While it may be challenging to connect with everyone, most people will open up to you if you focus on what’s important to them.

Is cold outreach dead?

Nowadays, many startups are raising funds through cold outreach and cold emails. While there is nothing inherently wrong with cold outreach, it is important to approach it in a thoughtful and strategic manner.

Before reaching out to someone, it is crucial to conduct thorough research on their background. This includes understanding their investment history, the success of their past investments, the number of investments they typically make in a year, their areas of focus, and any personal presence they may have (such as writing blogs or articles). Reading some of their work can help you understand how they think and what they value.

But how do you reconcile the philosophy that fundraising is a numbers game? It’s often said that you need to have at least 200 conversations to raise money, isn’t it?

Well, fundraising is not really a numbers game. It’s a relationship game. If you know how to build relationships, the numbers always tip in your favor. For some projects, I have raised money at a 100% conversion rate just because I knew how to build relationships. I didn’t have to reach out to 200 people. I only reached out to the six people that I really needed to reach out to.

Find Alignment or Walk away

After connecting with investors, we discuss and build a relationship. If we find that there is no alignment, I simply do not pursue the opportunity. It’s important to remember that when you know how to build a relationship, the other party feels understood. There is a difference between simply listening and making someone feel genuinely heard. I strive to ensure that others feel understood so that when I speak, they know that I am not only thinking about myself but also considering their perspective.

Fundraising involves two key elements: research and approach. It is important to carefully select the individuals to reach out to, rather than blindly contacting everyone in your database.

How to choose the right investors

You may be wondering, “How do I choose the right people to contact?” Well, the key is to find individuals who are involved in your industry. For instance, if I’m leading my team in seeking retail-focused funding, we typically seek out smaller, angel-level investors, especially key ones that can bring 2 or 3 additional ones with them.

If we are targeting companies in clean energy, we reach out to mid-level oil workers and offer them the opportunity to stay in their field while simultaneously evolving with the industry. At times, we approach senior executives of companies my portfolio companies have big contracts with and encourage them to invest in the future of their own business. After all, the more our business grows, the more we can support theirs.

When selecting specific investors, it’s important to reach out to those who understand the problem you’re solving the best. For energy projects, senior engineers are often the most knowledgeable about the technical aspects and may have the financial means to invest. Additionally, if you have half a million dollars from 10 conversions, you can be confident in your ability to attract investors.

When it comes to professional and institutional investors, there are thousands of funds available. So, how do you select the right one? Look at their available capital versus their deployed capital. This will be an indication of how often they deploy capital. Additionally, if they produce a lot of content and frequently communicate with others, they’re more likely to have a system in place to evaluate deals outside of their network.

Asking questions

Let’s discuss building relationships. The key is to ask the right questions. When we talk about “building a relationship,” we don’t mean discussing the weather or the latest golf tournament. Instead, ask questions that are relevant to the industry, such as how they invest money, what’s important to them, what sectors they are most passionate about, what personally drives their decision to invest in a specific field, and what their general thoughts are on the industry. Remember, you’re talking to people. Once you find alignment, connecting and networking become easier. Some people struggle to turn conversations into deals, I would say it’s a single crucial skill for any CEO. Learn when to listen and find the right timing to make the ask. Often, it’s as simple as asking, “Would you consider an investment in us?” at the precise time.

Keep in mind that the act of raising money is more of an art than a science. There isn’t a single approach that will work for everyone. The key is to adopt a strategic approach, foster connections, and recognize when it’s time to step back. Therefore, go ahead and acquire those funds with confidence!



Moshe Rivodeaux

Entrepreneur, Dealmaker, and investor. During my career I’ve raised over $4B for startups and led the creation of more than $500M in traction.