Fundraising Fails: Stuff I Did Wrong When Raising Early Stage VC

Let's get this out of the way first: fundraising was never one of my superpowers.

My first two startups, I was a "founding team" member, and while I wrote and edited a bunch of our IPO docs, I had nothing to do with raising capital.

My third startup had already raised $18M when I got a "battlefield promotion" to CEO and pitched 50 VC's on a recapitalization and pivot. We got two to the finish line and lost them both to the incumbent.

And my fourth startup had 200,000 installs in the app store and a couple million in pent-up investor demand before I took the co-founder/CEO role and raised our seed.

So when I say I got a lot of things wrong when I went out to raise multiple times for AdXpose and Dwellable, I'll caveat by saying the teams I worked with at the time helped make up for my shortcomings, and we did end up with funding and, eventually, liquidity events.

That said, having now seen a thousand+ decks and pitches from the other side of the table, I am constantly reminded of mistakes I made. Painful as it is, I thought I'd share a few of them here in case it helps founders avoid them.

Mistake #1: Lack of Practice

I did not run the deck enough times with friendlies and small angels before pitching my target investors. Your first 20 pitches will be rough. Figuring out where you get hung up, which slides don't deliver, where the narratives falters, what questions pop up consistently; all this helps you tune the pitch for go-time. Not networked into a bunch of angels yet? No worries: pitch your old colleagues, potential customers, anyone with a head on their shoulders and a willingness to engage will work. I could have pitched a bunch of 5th graders and benefited - just saying things out loud helps you hear what works.

Mistake #2: Ugly Slides

I did not hire a designer for my deck. At least not at seed. My seed deck was so bad, my seed VC forced me to use a designer for our A deck. Information design matters immensely when you are asking each slide to communicate a big concept concisely and simply. Also investors are human and humans love beautiful things - if your deck is well-designed and has a strong narrative and content, you'll have the edge over those that sit blandly on the page. Never mind that design speaks to brand and marketing sensibility: consumer decks especially need to be imbued with the spirit of your identity.

Mistake #3: Lack of Conviction

I let investor feedback whipsaw me. I replaced slides based on one investor's feedback, then again on another, and by the time i saw a third investor, they wanted the first version! This is why running the deck with 20-30 friendlies is so critical: you'll settle on the version of your story (and the supporting facts and figures) that YOU feel confident in, and develop the muscles to field the questions from folks who want different info, or info presented differently (aka the appendix).

Mistake #4: Failure of Imagination

I was too conservative with my projections. The deal sponsor at the Series A VC I was pitching took me aside the night before the partner meeting and basically told me to double the numbers. His (paraphrased) words were: "Kirby, we're haircutting your projections by 50% no matter what, so you need to throw out the largest number that still retains a few ounces of credibility." Especially at the early stage, nobody is going to hold you to your year 2-3 projections. This is not a budgeting exercise, it is a modelling exercise: if everything goes exceedingly well, what does growth look like? And how do you think about the drivers of the model? You don't get credit for being conservative here.

Mistake #5: Pointing at the Scoreboard Too Early

I focused on the numbers even though they were nothing special. I was insecure and felt like the traction metrics we had would carry me through these scary, anxiety-inducing meetings. But you need to remember, especially at Seed and Series A, *everyone* has good numbers (if not revenue, then freq of use or rocketship growth), that's the price of admission to the meeting. Product market fit, while it's the grail for zero-to-one stage founders, is really just the first inning for companies chasing outlier outcomes.

Overall, I mostly failed to communicate what the VC needs to believe (assuming you can capture lightning in a bottle and it's an opportunity size that supports a massive outcome) about the founder: are you the person with the vision of home-run success, the strategy to see the best path ahead, and the execution chops and tenacity to get the company there? A well practiced narrative, great design, conviction about your story, aggressive goals, and focus on vision and differentiation over raw numbers will all help investors see your ability to be the unique founder who can navigate their way to outlier success.

Luckily, I had incredible co-founders who investors wanted to back so badly they looked past my lukewarm fundraising skills. That's a great hack if you can swing it, and why the best thing you can do for not only your company but your raise, is to find an incredible co-founder or two.

Otherwise, get your story straight, work the process, and good luck!

And for those who are brave enough, share your own worst fundraising mistakes in the comments, and let's help founders avoid the pitfalls.