Fundraising - the nuts and bolts

Dear founders,

a number of companies that I support are currently fundraising, so I thought I write about the topic.?

Raising capital can feel intimidating but with the right preparation and approach, it doesn't have to be so daunting. Here my top tips on how to successfully raise your round:?

• Vet your investors as much as they vet you - research their investment styles, track record, and reputation in the founder community. Ask founders who recently?raised with them about their experience. Cultural fit is important. Also, customize your pitch for each firm, different VCs prioritize different things.
• VCs have different incentives than you - they run a portfolio strategy and are looking for $1B+ outcomes. Therefore, when pitching, you will have to talk about the biggest and most ambitiouis vision of what the company could be.
• Optimize for the "medium success case" - there is a large spectrum of outcomes that are life changing for you & your team, but immaterial for investors. So in order to optimise for this medium success case, raise at a fair, but not crazy valuation.
• Dilution & price don’t matter that much in the beginning - in the beginning your startup is worth nothing, so your efforts are better spent on finding investors who increase the probability that it will be worth something. Once it's worth?something, it's the right time to worry about dilution.?
• Maintain momentum and punctuality - follow up promptly on next steps. Send thank you emails, requested docs, meeting notes as discussed. Have your Data room and legal docs (cap table etc.) prepared in advance. Shows preparedness and avoids delays in closing.
• Play long-term games with long-term people - if you are doing this right, you are building a company for a decade, if not longer. Your lead investors will have a significant impact on the quality of your life for that time. Make sure you build authentic relationships before fundraising. Investors want to back founders they genuinely like and trust.

Whether you're just starting out or getting ready for your Series C, these strategies will give you an edge with investors. You've got this!

Feel free to reach out if you have questions or need support in your fundraise.

5 Tweets to feed your mind?

#1

Hehe.. it takes one to know one ;-)?

#2

Before the release of ChatGPT 3, few of us would have predicted how much white collar jobs would eventually be threatened by AI.??

#3

On the topic of AI, this tweet went viral this week. Bottom line: more and more researchers believe that AGI / Superintelligence is coming in the next 5 years. If you want to understand what that could mean,?this is a brilliant post from 2015 but still incredibly relevant today.

#4

While a bit exaggerated, there is some truth to this. Don't feel it's just yours -?most companies are chaotic, messy and sometimes a sh*t show.?

#5

The market cap of the 5 largest companies makes up 24% of the S&P 500. That's the largest concentration in history. Before the?dot com bubble popped it was at 18%. Got Bitcoin? ;-)??

And.. that's a wrap, have a great rest to your week!

Sebastian