Friday, November 12th 2021 (14 days ago)
When most people think “startup,” they envision success in Silicon Valley, New York City, and other major coastal cities.
It’s true, these metropolitan hubs are fraught with blossoming startups, investor money, and generally more social media relevance than that of a smaller Midwestern city. As a result, most people assume it’s easier for founders to raise funds on the coasts than in the flyover country.
However, most people fail to see the advantages of raising funds in Midwestern cities, such as Forecastr’s hometown of Louisville, Kentucky. While every geography comes with its challenges, raising significant cash at fair valuations in the Midwest is certainly plausible, and we have a few tips on how to do it.
If you read our last blog post, “The Art of Friendraising,” you already know that networking and building investor relationships are crucial to a successful fundraise. This remains true in the Midwest; your network may prove even more indispensable in a less populated city because you simply have fewer options.
However, because the startup scene in Louisville, for example, is much smaller than that of Los Angles or Seattle, that network often proves more tightly knit, which in turn makes other locals more accessible. Once you build a solid relationship with one or two significant investors, you obtain the golden key to most of their connections. The tightknit startup communities in these Midwestern cities enable easier access to local angels than on the coasts.
First, Midwestern founders should scan the local horizon and identify key local players. Begin to build relationships with other founders and investors who connect often within this network. Because these startup communities likely congregate regularly, take advantage of every opportunity to fraternize with their group and many doors will open.
It’s no secret that in the Midwest everyone seems to know each other. Even more, the startup community seems to revolve around networking and mutually beneficial support. Use the Midwestern mindset to your advantage and build your network.
Because Midwestern areas often do not offer all the advantages of coastal startup hubs, they often compensate with local entrepreneurial organizations designed to help founders grow their network and learn about the space.
A simple Google search for entrepreneurial support organizations in your state will reveal greater access to local startup communities. The organizations may lead to pivotal contacts for your startup and opportunities toward press coverage to increase access to capital in your region.
Do not shy away from getting involved – lean into these opportunities to become part of the network you hope to access. Oftentimes, big fish in the local pond make more of a presence in these organizations than you would find in a huge metropolitan area.
Accelerators provide portals for Midwestern startups to access coastal investors.
Regardless of region, accelerators provide startups with powerful market validation. Simply gaining acceptance to a higher-tier accelerator will attract angels to your fundraise.
To achieve truly exponential growth, you will soon need to branch outside even a well-cultivated local community. Particularly for startups in the Midwest, a strong accelerator program may provide the extra validation and support you need to achieve nationwide network expansion.
While accelerators often grant a small sum of cash to their startups, the greatest benefit exists within the networking opportunities and mentorship that accelerators provide. Check out our blog post on the value of accelerators to learn more about when and why startups should consider joining one.