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Everything I wish I had known about raising a seed round

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Re: Everything I wish I had known about raising a seed round

#11

Post by api »

elcomet wrote: post #10
api wrote: post #9

A few things I've learned: 1. SAFEs are convenient if everyone is amenable, but be careful about having SAFEs sitting around too long or with different terms. They're like the Mogwai in the Gremlins films. They're kind and cuddly unless you feed them after midnight or get them wet. 2. Stay in touch with your angels even if they don't initiate. It'll help in tons of ways and they can interpret lack of contact as a sig…

> 1. SAFEs are convenient if everyone is amenable, but be careful about having SAFEs sitting around too long or with different terms. They're like the Mogwai in the Gremlins films. They're kind and cuddly unless you feed them after midnight or get them wet. Your analogy is funny but you don't actually explain why SAFEs are dangerous, could you develop?

If you have SAFEs with different terms the calculations for your cap table can become onerous and complicated and confusing.

If things get confusing some SAFE holders might feel like they're getting a worse deal than others, which can cause acrimony on your investor team.

If they sit around too long the risk of these things increases. SAFEs are so easy someone can offer to invest and you say yes and BAM you sign one... without bothering to carefully look over all previous SAFEs etc. and make sure terms are in line with expectations. They're almost too easy to execute.

My analogy came from the fact that if you have these problems you can get a complexity explosion during the next priced round.

KISS (Keep It Simple Stupid) is really the TL;DR.

Re: Everything I wish I had known about raising a seed round

#12

Post by baxtr »

davidhunter wrote: post #7

For anyone reading this advice. The number 1 reason why Matt’s fundraising process went as well as it did is because he has a world-class personal track record. This dwarfs all other reasons by a long way. Quite frankly Matt would have been able to raise with complete air (assuming that his cofounders have similar personal track records). That’s not to take anything away from Matt. He’s clearly an accomplished indivi…

He is Ex-Google and Ex-Apple… so I guess it’s way easier for him to raise than for other people.

Re: Everything I wish I had known about raising a seed round

#13

Post by thecupisblue »

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP.

Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single pitch with a deck live. If it was a live meeting, they've already seen the deck or we've done a short pitch over zoom already. The "stand in a meeting room and pitch to VC's" thing is mostly a myth nowadays.

But a 5 million raise without even having a product just sounds insane. We've been offered 50-100k offers due to our team and product, but rarely anyone wants to invest more than that in a pre-revenue/pre-launch startup. And if they do, they would do it in tranches and by the time they would invest 500k we'd be giving them more than 20% equity.

The difference in valuations is just insane, with even VCs straight-up telling us that if we were raising in US we'd be offered 5-10x more than here.

Honestly, this whole ride makes me think I should just get a job at a US startup and use the cost of living difference to pay devs out of my own salary.

Re: Everything I wish I had known about raising a seed round

#14

Post by aliqot »

Might be a very unpopular opinion here, but the overall attitude I'm seeing IRL these days is favoring bootstrapping. I asked why and was told essentially suits provide a very specific and targeted value with limited application outside of those areas. It's no longer an accelerator for an exit, it's someone buying the position of your employer and the choices are no longer yours to make. I can see that.

Re: Everything I wish I had known about raising a seed round

#15

Post by syedkarim »

thecupisblue wrote: post #13

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP. Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single…

>>with even VCs straight-up telling us that if we were raising in US we'd be offered 5-10x more than here

Serious question: Then why even remotely bother raising from European VCs? Doing so is clearly not in your best interest. Is it a matter of pride?

Re: Everything I wish I had known about raising a seed round

#16

Post by moreira »

thecupisblue wrote: post #13

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP. Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single…

> Honestly, this whole ride makes me think I should just get a job at a US startup and use the cost of living difference to pay devs out of my own salary.

I know this was an off-hand remark that you're probably not thinking much about, but you're absolutely right, and it might be worth seriously considering it. Moving to the US is probably the single biggest improvement you can make to your career and opportunity options. You will never have as much opportunity in Europe as you will in the US, not in the tech world. You might be able to eke out some success in Europe, but it'll pale in comparison to what you could've achieved in the US.

Re: Everything I wish I had known about raising a seed round

#17

Post by davidhunter »

syedkarim wrote: post #15
thecupisblue wrote: post #13

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP. Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single…

>>with even VCs straight-up telling us that if we were raising in US we'd be offered 5-10x more than here Serious question: Then why even remotely bother raising from European VCs? Doing so is clearly not in your best interest. Is it a matter of pride?

Very few US VCs will/can invest in non-US companies at the seed stage.

Re: Everything I wish I had known about raising a seed round

#18

Post by thecupisblue »

syedkarim wrote: post #15
thecupisblue wrote: post #13

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP. Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single…

>>with even VCs straight-up telling us that if we were raising in US we'd be offered 5-10x more than here Serious question: Then why even remotely bother raising from European VCs? Doing so is clearly not in your best interest. Is it a matter of pride?

Not many of them are willing to invest in EU startups at early stage - a lot explicitly say they invest in NA only, and I assume a lot of them just don't want the legal difficulties - also it's much harder to get warm intros to US investors if most of your network is based in Europe, and logistics to do a in-person meeting are way harder if somebody is on the other side of the world.

Re: Everything I wish I had known about raising a seed round

#19

Post by thecupisblue »

moreira wrote: post #16
thecupisblue wrote: post #13

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP. Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single…

> Honestly, this whole ride makes me think I should just get a job at a US startup and use the cost of living difference to pay devs out of my own salary. I know this was an off-hand remark that you're probably not thinking much about, but you're absolutely right, and it might be worth seriously considering it. Moving to the US is probably the single biggest improvement you can make to your career and opportunity opt…

Oh it's not just an off-hand remark, been thinking a lot lately, especially the closer we are to closing a round the more it's on my mind.

I know that career-wise I'd have more opportunity in US, but besides that, not much attracts me there - quality of life is way better here. Especially if I can work remotely for a US based company and use 50% of my salary to hire at least 2-3 developers locally to work on my product. The difference in salaries and cost of living is huge.

Re: Everything I wish I had known about raising a seed round

#20

Post by baxtr »

thecupisblue wrote: post #13

Looking at this as a founder thats currently raising a seed round (or pre-seed, tho as I understand, same position as OP) in Europe with an MVP. Some parts ring true, as in VC's you never heard of contacting you on LinkedIn, sharing decks between their contacts and keeping in touch to build a relationship. The part about common pitch deck advice being geared towards live pitches especially - we haven't done a single…

Two questions: have you considered raising in the US? It’s gotten easier with the pandemic

And: re new pitch decks. Is there a good template for the new type of pitches?

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