The founder of Captain, Demetrius Gray, has raised an impressive $107.3 million to date, but he’s not a first-timer. Although his first startup, WeatherCheck, didn’t work out the way he envisioned it, that company paved the way for his current success.
“The incentives were mismatched,” explains Gray.
His current startup, Captain, advances money to contractors for home repairs after natural disasters, then gets reimbursed by insurance companies or the government.
The idea resonated with investors: Using the methods described below, Gray was able to raise $100 million in venture capital and $7.3 million in private equity.
I gathered bits of valuable knowledge that he shared with me about his experience raising capital, honing pitches and networking, as well as the strategies he found most useful as a Black founder.
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Fundraising as a black founder
Gray has developed many mentoring relationships, especially in the black entrepreneurial community. He says he often sees black founders stop trying to raise money too quickly.
He says everyone should hear ‘no’, but it’s important to keep pushing. Eventually you will find an investor or fund that loves what you do.
His second tip is all about putting on a show: being memorable is the difference between getting passed over and funding your startup.
“It’s a performance,” he says. “The black community [is] a community of many entertainers and athletes. Listen to Serena Williams, Mike Tyson, Floyd Mayweather, LeBron James — the greats — and treat it like a performance.”
Three ways to increase
Gray breaks down the methods he used to raise money into three steps:
“People see the headline: ‘$107 million raised.’ What they don’t really understand is that it was a progressive process of building relationships over time that made that possible.” Demetrius Gray, Founder, Captain
Use Tier 3 investors to get pitch perfect
It’s the norm to aim for top investors on your cap table, but Gray says you shouldn’t discount smaller VCs. He used several Tier 3 VCs as a sounding board for pitch feedback.
“Most VCs would be a bit shocked to know they’re being used that way, but it happens a lot. We have perfected the field [with] smaller funds and lesser-known VCs,” he says.
As long as you’re not totally barking up the wrong tree, this tactic probably isn’t wasting any VC’s time either. Smaller checks can still come from lower level VCs.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.