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Author here - happy to answer any questions
It was written at the end of 2019, do you think it's just wrong? Or has it changed that much in the past 2 years? Or is it a different set of startups?
On a sidenote, I'd be interested in reading an article exploring the inverse of this! How to -not- raise investment. Most people look at funding like "yeah well I mean that's just the thing you do" but it's not for all cases. Sometimes tossing gasoline on something is just enough to make it fizzle. I'm looking forward to the pendulum swinging back around to 2022, bring on the slow-biz startups, the organic growth, gi…
https://www.vox.com/2019/1/23/18193685/venture-capital-money...
To be very clear , this articles won’t help you much if you don’t fit the criteria’s the OP does. Having discussed with VC a long time ago , it was very HARD to raise money without a very strong traction. Very often VC were convinced with my pitch , and my product but would not invest either because they had stuff somewhat similar in their portfolio and often because I didn’t have a “track records” to proof my capabi…
Author here - happy to answer any questions
For anyone interested in raising money soon, but not immediately, the best thing you can do is start an weekly update email. Start sending thing to all the people you interview for advice, supporters you know in the same space, and peers/coworkers. If you keep a regular email showing your progress, even though you may not have traction, potential investors will see the pace at which you are developing/iterating, and…
One note of caution. As someone who gets a lot of these kinds of update emails, it's also very apparent when or when not a company is hitting an inflection point. Why does that matter? If things are going well, great - you'll have a much easier time fundraising. The potential investors on your list will see your progress and realize they have a chance to preempt. If things are not going well, you're providing a conti…
So the main question as a corollary to your statement is: How do you effectively create investor FOMO? Do you have any experience to share here as well?
Having raised a seed and A-series in the last 1,5 years from top tier VC’s in the B2B space: this post is 100% spot on. Will recommend. We actually used the YC seed and A-series pitchdeck templates the OP mentions. Last thing: everything becomes 1000% easier if you have customers. Focus on customers. Raising becomes almost easy after that.
Just a weird looking TAM (small as all get out and competitive market) is all I can chalk it up to - or I’m a crappy story teller
Earlier quoted context omitted.
One note of caution. As someone who gets a lot of these kinds of update emails, it's also very apparent when or when not a company is hitting an inflection point. Why does that matter? If things are going well, great - you'll have a much easier time fundraising. The potential investors on your list will see your progress and realize they have a chance to preempt. If things are not going well, you're providing a conti…
Thanks for the insights. Makes a ton of sense. So the main question as a corollary to your statement is: How do you effectively create investor FOMO? Do you have any experience to share here as well?
By succeeding.
That sounds either snarky or obvious, however, I mean it quite literally. The absolute single best way to create investor fear of missing out, is to actually succeed at what you're doing. There's nothing close to that. Succeed at whatever stage you're at and be able to demonstrate that to the potential investors. If you're the real deal, you can build, execute and deliver on what you're attempting and claiming. Nothing prompts FOMO from investors like actually delivering and building up a demonstrated chain of success as you go; they see it, and they want to be part of it.
All the other methods are shady, deceitful, disingenuous, fake it until you make it types of bullshit cons. Akin to attempting to trick someone into funding you (ha! look at that! I made myself look more successful than I am, I really pulled one over on them; Theranos).
This article really highlights how stupid frauds like Theranos get funded. The real answer is between the lines:
To get funded:
a) Be connected, physically close and already in the clique. b) Don't be outside the clique.
I mean I get the idea that rich kids giving their rich mates money to start yet another dogshit fintech is just how the game is played, but what a frustrating time it is for the rest of us.
Author here - happy to answer any questions
Interesting to read those valuation benchmarks. I'd seen this article in SeedLegals previously https://seedlegals.com/resources/how-to-value-your-company/ that seem to be quite a lot lower. It was written at the end of 2019, do you think it's just wrong? Or has it changed that much in the past 2 years? Or is it a different set of startups?
Actually I've seen nothing to suggest that valuations have changed since our article. If you're seeing differently, all feedback welcome.
I should add that I always have a lingering concern that so many people reference that article - both founders and investors - that in some ways it's moved from reflecting market to making market... which means the bar to making sure it's accurate is high.