How to Engineer FOMO and Raise an Oversubscribed Round

From Good Idea to Scalable Business

Many founders start with a good idea. Few translate it into a company that can raise $50 million. The journey from a concept to a venture-scale business requires a specific mindset and a series of deliberate, often difficult, decisions.

Christer Holloman, co-founder of the fintech platform Divido, provides a masterclass in this evolution. His experience at Glassdoor, a company that scaled to 1,000 people and a billion-dollar acquisition, reshaped his perspective. He learned a critical lesson: VCs don't fund ideas that might generate $10M in revenue; they fund ideas that have a credible path to $100M and beyond. This "think bigger" mindset is the foundation of any successful fundraise.

Find Your Wedge: Partner, Don't Compete

The "buy now, pay later" (BNPL) space was already crowded when Divido was conceived. Instead of launching another consumer-facing lender, Holloman identified a non-obvious entry point: empowering the incumbents.

He saw that aspiring BNPL players faced two massive hurdles: raising huge debt facilities to lend money and navigating the brutal process of getting a banking license. The insight was simple but powerful: instead of fighting the banks, sell them the software to compete in the BNPL space themselves. Divido was born as a white-label SaaS platform, the "picks and shovels" for the BNPL gold rush.

How to Find Your "Picks and Shovels" Angle

Map the Value Chain: Who are the players in your target industry? What critical functions do they need to perform? Where are the bottlenecks? · Look for Drags on Growth: What prevents incumbents from innovating faster? Is it regulation, technology debt, or operational complexity? Selling a solution to a major drag is a powerful value proposition. · Identify Non-Core Needs: What is a company good at, and what does it wish it could just buy? Banks are good at managing risk and capital, not necessarily at building slick user interfaces. That gap is an opportunity.

The Painful-But-Profitable Pivot to Enterprise

Divido started by serving small and medium-sized businesses (SMBs), quickly amassing over 1,000 customers. This is a common starting point for startups: go after the long tail, close deals quickly, and show traction.

The entire trajectory changed when Lenovo came knocking. Landing one massive enterprise client forced a painful but critical decision: go all-in on enterprise and abandon the SMB segment that got them started.

This isn't just a sales strategy change; it’s a company-wide transformation. Moving from a high-volume, low-touch sales model to a low-volume, high-touch one impacts everything.

The Reality of Enterprise Sales

Selling to enterprise is a different sport. A sales cycle that was once a week long can stretch to 12 months or more.

A typical enterprise deal isn't one "yes." It's a dozen "yeses" from different stakeholders across legal, compliance, security, finance, and product, followed by a six-month due diligence process, and then a nine-month implementation.

Are You Enterprise-Ready? A Checklist

Product: Can your product handle enterprise-grade security reviews (like SOC 2 compliance)? Does it have features like single sign-on (SSO) and role-based access controls? · Team: Do you have a patient, experienced salesperson who can navigate complex organizations? Do you have solutions engineers who can handle deep technical due diligence? · Capital: Can your balance sheet survive a 12-18 month sales cycle with no revenue from a deal? You need the runway to invest in a deal that might not close for a year or more.

How to Engineer a "Hot" Round and Get Oversubscribed

Raising $50 million, especially through a crisis like COVID, doesn't happen by accident. It happens by design. Holloman used a playbook to create competitive tension and investor FOMO (Fear Of Missing Out).

Step 1: Master Your Narrative

Before your first meeting, you need a crisp, 15-20 slide pitch deck that tells a compelling story. It's not just a list of features. It’s a narrative that answers:

The Inevitable Future: Why is your vision of the market’s future certain to happen? · The Unfair Advantage: Why are you the only team that can win? What is your unique insight or technology? · The Economic Engine: How does the business make money at scale? What are the unit economics?

For Divido, the narrative was clear: "Every bank and retailer will need a BNPL offering. Building it is slow, expensive, and risky. We give them a best-in-class solution, instantly."

Step 2: Engineer FOMO Systematically

FOMO isn't magic; it's process. You can’t just tell investors a round is "competitive." You have to make it feel that way.

Sequence Your Meetings: Don’t talk to your dream investors first. Start with friendly VCs or those less likely to be a fit. Use these meetings to refine your pitch. Group your most-desired investor meetings closely together, within a 1-2 week period. · Find a Lead: Your primary goal is to get one respected firm to issue a term sheet. This lead investor validates your company and sets the basic terms, creating a focal point for the round. · Run an Update Process: Send a concise, weekly update email to every investor in your pipeline who hasn't said "no." This is crucial. It shows momentum and reminds everyone that the train is leaving the station.

Hope you're having a great week. Quick update following our conversation:

Product: We just shipped the new dashboard for our enterprise clients. · Pipeline: We’ve advanced to the final commercial stage with the large European retailer we discussed. · Round: The round is coming together well. We had 8 meetings last week and are now in deep diligence with several funds. We are expecting a term sheet by [Date, e.g., Oct 21st] and plan to close the round shortly after.

Step 3: Leverage Oversubscription

When you run a tight process, you often get more interest than you need. This is called being "oversubscribed" and it’s a position of immense power.

If you’re raising a $5M round and have $8M of interest, you can:

Raise Your Valuation: Go back to your preferred investor and negotiate better terms. More demand means you are a more valuable asset. · Choose Your Partners: You get to pick who is on your cap table. You can optimize for VCs who provide the most strategic value, not just the ones who said "yes." · Signal Strength: Announcing an "oversubscribed round" is a powerful signal to the market, future employees, and potential customers that you are a winner.

Build Authority Before You Need It

The source article notes that Holloman published a book. While not a path for everyone, the underlying strategy is critical: build public authority.

Whether it's writing a book, publishing a newsletter, speaking at conferences, or being active on LinkedIn, establishing yourself as an expert in your domain warms up every future conversation. When you reach out to an investor or enterprise client, they already know who you are. You’re not a cold email; you’re a recognized authority.

How to Apply This This Week

Re-evaluate Your Market: Are you competing head-on, or have you found a "picks and shovels" angle to serve the big players? Spend two hours this week mapping your industry's value chain. · Audit Your Sales Process: If you serve SMBs, calculate the real cost to acquire and support one. Then, identify one "dream" enterprise client. What would it take to land them? The answer will reveal if you need to consider a pivot. · Draft Your "Momentum" Email: If you're fundraising, write a draft of your weekly investor update right now. What three bullet points will you share to show progress and create urgency? If you don't have good answers, you know where to focus.