Seth Profile picture
16 Sep, 16 tweets, 3 min read
A+ info from @lpolovets today on @immad / @BankMercury's webinar on seed stage funding.

In case you missed it, here's a recap:

- Getting the meeting
- You got a meeting, now what?
- After the pitch
- Seed Valuations
- Exits
- Remote teams
- Portfolio conflicts
- Vison/plan
- Founder flags
- After getting the investment
- Founder compensation
- Pandemic centric ideas
- Prospecting investors
Getting the meeting:

- Intros from network are important

- Cold outreach works too, but make sure to demonstrate why your company is among the 1-3% worthy of more time

- Avoid superficial personalization
You got a meeting, now what?

- Succinct pitches win (1/3 of meeting on the pitch, rest for questions)

- Consider leading with a demo in the pitch. It may come across better over a virtual pitch

- Don't over or under exaggerate

- Send deck before

- Be confident & energetic
After the pitch:

- Follow-ups are worthwhile but remember not everyone responds

- Check-in after a few days, then after a few more, then write it off and move on
On seed valuations:

- Understand that investors pattern match to the other deals they see

- Aim to raise enough for next 18-24 months + ~ 20%

- Avoid giving valuations, set a raise amount, and let the market set the terms
On seed valuations (cont'd):

- Work backward from Series A. What will those investors want to see? How much $$ will it take to get there?

- Remember that investors contend with fund sizes. Any investment should be able to return the fund.
On exits:

- Exits follow a bell curve: not good, okay, and good.

- Unaligned when founder is leaving a clear path to higher val in 5 years for an exit now

- Otherwise, if founder gave it his/her all an exit is acceptable
On remote teams:

- Care less and less about them, but depends on company and product

- It may be hard for investor to get you a VP candidate outside investor's area.

- For int'l teams, the main issue is in investor market knowledge not team location
On portfolio conflicts:

- Hard to avoid across the board, but try to, depending on company size

- Check on both sides for comfort level if there would be a conflict
On vision/plan:

- Important to show 10 yr vision and 2 yr plan

- The goal is to show a clear trajectory to get to the 10 yr vision

- Be realistic though. Ex: Robinhood -> large market, no one liked fees; Superhuman -> smaller market, 1B gmail users not going to all use it
On founder flags:

- Red flags = showstoppers: founder has a bad rep or untrustworthy

- Yellow flags = workable: little industry or leadership experience

- Green flags: founder-market fit, charisma, ability to sell, thoughtful, confident, high grit
After getting the investment:

- Regular catch up calls with founders (biweekly/monthly)

- Discuss biz performance, problems, make intros, etc.

- Founders should grow headcount slowly and be frugal
On founder compensation:

- Pay yourself at seed stage, cover expenses comfortably (20-100K not bad)

- Series A +, founders should get market salary

- Take money off the table at Series A + not bad, want founder comfortable and incentivized
On pandemic centric ideas:

- Need to assess temporary vs. long-term shifts in consumer behavior

- Focus on barriers to entry

- Ex: Ordering groceries online -> people didn't try, now won't go back. Remote learning -> prob won't last
On prospecting investors:

- Research and personalize

- Framework: Spend 15 minutes on 15 people, see how much you can do, and send emails. Rinse and repeat.

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