How to Build a Fundraising Sales Funnel for Your First Startup Investment

Securing your first investment check requires more than just a great pitch—it demands strategic relationship-building and systematic execution. Milana Lewis, CEO and co-founder of music tech startup Stem, shares her proven framework for early-stage fundraising success.

The Power of Early Relationship Building

Milana’s journey began a decade before launching Stem, during her tenure at United Talent Agency (UTA). While evaluating tools for UTA’s clients, she identified a critical gap in financial management solutions for artists—an insight that would later shape Stem’s mission.

Her role at UTA Ventures, the agency’s investment arm, provided unexpected advantages:

• Exposure to high-profile investors like Gary Vaynerchuk and Scooter Braun
• Opportunities to cultivate authentic relationships
• A platform to share her entrepreneurial aspirations

“Start raising a year before you start raising,” Milana advises. “Build relationships and data points long before you need them.”

3 Key Strategies for Fundraising Success

1. Bring Investors Into Your Journey Early

Milana’s approach to investor relations:

• Shared regular updates about Stem’s development
• Sought advice during the ideation phase
• Maintained transparency about her entrepreneurial goals

This long-term engagement meant that when fundraising began, some investors required just a 15-minute conversation to commit.

2. Systematize Your Outreach

Milana’s disciplined process for each funding round:

1. Create a Lead List: 100+ potential investors
2. Discovery Phase: Track responses to key questions in a shared spreadsheet:
   • Investment focus areas
   • Recent portfolio additions
   • Market opportunities they’re watching
   • Typical check sizes
3. Prioritize Prospects: Focus on investors with:
   • Relevant stage focus
   • Existing relationships
   • Potential to attract other backers
4. Create Urgency: Compressed 60-day timelines with back-to-back meetings in key cities

3. Transform Rejection Into Intelligence

During Stem’s COVID-era fundraising round:

• Conducted 65 introductory calls
• 28 progressed to next stages
• 21 ghosted, 16 passed

Milana’s rejection protocol:

• Requested referrals from investors passing due to timing
• Gathered detailed feedback from declined offers
• Used insights to refine pitch materials and strategy

The result? A successful round closed with five committed investors.

Key Takeaways for Founders

1. Start early: Investor relationships take years to cultivate
2. Systematize everything: From lead tracking to meeting schedules
3. Leverage rejection: Every \‘no\’ contains valuable data
4. Create scarcity: Time-bound processes drive decisions

Image Credits: Nathan Beckord

By approaching fundraising as a long-term relationship-building process rather than a transactional pitch, founders can significantly improve their chances of securing that crucial first check.