Fundraise Deliberately

Fundraising is hard. Full stop.

As pre-seed VCs, there is rarely a time we're not working with a cohort of companies in our portfolio through their next raise. We ride shotgun to the struggle, the lows and the highs.

Especially for early startups with few proof points, fundraising can be a real rollercoaster. The well-known tales of Doordash, Uber, and Canva being rejected by over 100 investors before landing their first 'yes' are testaments to the challenge. And it serves no one to sugar coat that the current market conditions are making it even harder (cc Tomasz Tunguz).

Most of us see fundraising as a necessary evil we’d like to avoid when possible. Rarely does anyone relish the process (except for the thrill when closing an investor).

However, if you aspire to build a successful venture-backed startup, at least one founder, ideally the CEO, must become proficient at it. There’s no way around it - without runway / $ in the bank, there’s no startup.

See my recent post regarding a startup CEO’s number one job being to make sure your startup doesn’t run out of runway for more on the topic.

Stating the obvious - being skilled at fundraising leads to more capital to put towards the best resources, gives you better access to great investors and talent, provides you with more financial stability and much more. Plus being well-capitalized (while maintaining fiscal responsibility) is a significant advantage, particularly in today's market.

The good news is that fundraising, like any other skill, can be mastered. Numerous resources are available to help you get better at it, including:

• Fundraising guides: E.g. YC guides, Lenny’s playbook for fundraising or 20VC’s episode on how to fundraise like a pro)
• Pitch deck examples: E.g. Product Hunt’s 1000+ Pitch Deck Examples From the Most Successful Startups)
• Pitch guides: E.g. YC’s how to talk to investors, 500 VCs The 7 (Pitching) Habits of Highly Effective Founders or Mark Suster’s How to Improve Your Odds of Getting to Yes with a VC — “Land and Expand”

There are many nuances to a successful fundraise - I won’t discuss them today. The resources above do a great job at it.

What these resources don’t discuss though, as they mostly focus on making a single fundraise a success:

Throughout the startup journey, you will hit the fundraising circuit many times. As with any other skill, actively working on getting better at this critical piece to growing your startup (called deliberate learning) compounds and significantly improves your odds of success.

Unfortunately, when you’re in the middle of a fundraise, it’s very hard to focus on anything but securing funding and keeping your business afloat. Additionally, the next round may feel like a lifetime away (18+ months), and many of us are reluctant to invest time in honing something that is considered a ‘necessary evil’. Thus, very little time is spent on deliberately trying to get better at it while raising.

However, the sooner you embrace the fact that you need to become proficient at fundraising, the sooner you will deliberately seek to get better at it, rather than solely focusing on crossing the finish line. This will compound over time, significantly improving your odds of startup success. As hard and frustrating as fundraising is at times (As a first time fund manager without a previous investing track record, I can relate, trust me).

Even small actions like taking detailed notes throughout the process on learnings / experiences (it’s remarkable how quickly we forget), reflecting on what to improve after closing a round, working with a coach, or even recording and reviewing your pitch during a raise, can go a long way.

What ultimately works best is different for each of us - you need to figure out what works best for you. The main thing I want you to walk away with today is that you spend time thinking about ways to deliberately get better at fundraising. While few enjoy it, mastering this critical aspect of building a startup will move the needle along the way.

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