How to Leverage Herd Mentality in Fundraising + Fundraising Fieldnotes 12.6.22

Drive Momentum for Your Fundraise

Author

Jason Yeh
December 06, 2022

Before we get to this week's essay...

Have you heard of "SAFE stacking" or raising a round of capital on multiple SAFES with increasing valuations? This has been a strategy highly touted but only vaguely explained.

The changes to the fundraising market over the last 6 months have impacted all strategies including this one.

On December 20th, I'll be leading a live workshop walking through the ins and outs of using multiple SAFES when fundraising. I'll go through the why (and why not), when, and how of SAFE stacking.

Don't miss out ➝ lu.ma/SAFEworkshop

On to the fieldnotes...

Take a look at this video:

Efeito manada.

That's what explains why a group of crossfitters running by a cafe in Brazil caused a stampede of people to follow thinking they needed to escape something.

Also known as "herd mentality" in English, it’s what drives humans to copy the behavior of others around them with little reason. A stampede on a sidewalk in Brazil is a more extreme version of something you see a lot with hot restaurants and stores. People will stand in line simply because of… people standing in line!

This phenomenon can be used to encourage collective action in a variety of fields and is the basis for many powerful fundraising strategies.

Read through these examples and see how herd mentality plays a part…

Angel Army

The Angel Army strategy is a strategy I’ve written about that leverages angels as the starting point for a fundraise (https://www.adamantventures.com/blog-post/building-an-angel-army). By kicking off a fundraise with an "army" of credible angels, you borrow credibility and assemble a group that larger investors will feel comfortable following. In other words, you create a herd of angels for the masses to follow. This is one of the most effective ways to build momentum for your fundraise.

Social Media as PR

Social media is not just cringey dances and shit posting. It's a platform to spread ideas and initiate a digital following.

With social, everyone can be their own PR firm and create a digital herd promoting and pushing their company: https://www.adamantventures.com/blog-post/how-social-media-drives-investor-interest

*Need inspiration on what to post? Download our resource pack: 14 Social Media Posts That Get You Noticed By Investors

Calendar Density

The grand daddy of fundraise strategies. Calendar Density has everything to do with creating “efeito manada” within investor groups.

With a well established group of investors all looking at your deal during strict availability windows, you’ll have created calendar density. In this situation, VCs are forced into a herd. As they look to their left and right, they’ll feel other investors running towards your deal and the undeniable urge to follow😳

Wrapping up, leading the pack

Read through these examples of herd mentality in fundraising. Herd mentality is a powerful tool to create collective investor action and can be used to accelerate fundraising success. Understanding the pull of the herd for investors will help you create more situations that drive capital to your front door and put you ahead of the pack to close a round.

Smart Twitter Takes

Lots of startups leverage YouTube. And if you leverage YouTube, it turns out thumbnails are important!

Sounds simple but for many overachieving, introverts…this would be an incredible super power

P.S. 🆒, thanks for the heads up

Did you like today's post?
With your feedback, we can make sure we're covering the topics that are most useful/helpful to you. Click here to give us feedback:
Powered by Typeform