💰Founders raising a Series A: one of my port cos is also working on their A and I thought I'd share perspective + tips I'm passing on to them.
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At a Series A, investors are looking for a co w/product-market-fit + hockey stick growth that will quickly achieve unicorn status (≥$1B valuation). Financials are key!
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Tell the Story
🔮Vision, Mission: consider problem, solution, benefits
🗓Why does the world need your co today (vs before)? Consider: COVID/WFH, etc.
📈Show you’re in a well-defined market that’s growing.
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👛 Cash on hand
📉 Burn rate
💰MRR
💸 CAC
📈 CLTV
💯 NPS
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Point towards scalability
🤗 Is the demand there?
🧐Can you achieve scalability w/Series A capital?
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Share the numbers (big) vision
🤑 Demonstrate your interest in becoming a billion-dollar valued co
📈 If you’re not there yet, tell the story of how you’ll achieve $100M in revenue
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Show you’re building the right team
🤠Filling the gaps to take you to the next level
👋🏽Attracting the right people to hire
🌈Consider diversity
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Defend your competitive advantages
✨What are your sustainable differentiators? Consider Brand loyalty, IP, Scale, Locked-up Supply, Network Effect, Innovation, etc
💰Express how your co will provide the greatest returns for investors
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Show that Series A capital will make your company a rocket ship 🚀.
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VC Fundraising Tips
👋🏽 Build relationships
👁👄 👁 Give them FOMO
👩🏽🎤Build social proof through angels, influencers, top advisors, etc
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💰 𝐖𝐡𝐨 𝐝𝐨 𝐲𝐨𝐮 𝐢𝐧𝐯𝐞𝐬𝐭 𝐢𝐧 𝐚𝐧𝐝 𝐡𝐨𝐰 𝐦𝐮𝐜𝐡? We'll write $100K checks to early-stage founders con ganas and a big vision to address big problems in growing markets thru a sustainable go-to-community strategy.
🎉 I'm happy to announce that 24 underestimated founders will be receiving a free annual newsletter subscription, thanks to two sponsors: @GeniusGuild and @target!
1/ An underestimated founder is a founder that has the potential to build a successful company, a unicorn, but is overlooked by investors because she or he does not fit the stereotypical - cis-gendered-white-male-ivy-league-drop-out-who-worked-at-a-FAGMA-co-founder mold.
2/ When underestimated founders are seen and have the right support, magical things can happen. Take Tope, a Black man and founder of Calendly, for instance. He was underestimated for years and had VCs pass him up for funding, and later he became a unicorn.
3/ Imagine what would have happened if investors saw him for his potential from the beginning. They would have made loads more money and had their calendar in check for days.
🤔 Asking for a founder: what are VCs looking for in a pitch deck?
1/ In this thread, I cover a list of the questions I personally like to see founders answer in their pitch decks:
↳ Vision - how are you changing the world?
↳ Market size - how big is the market + how much is it growing YoY? What are the market tailwinds?
2/ ...continued
↳ Problem - what problem are you solving?
↳ Solution - what's your solution to the prob in q3?
↳ Competition/differentiation moat - who else is solving your problem and what sets your team's approach apart and makes it hard to replicate?
🤔 Asking for a founder: what should founders know about how VCs work?
1/ VCs have fiduciary duties to their investors. That means that we have a financial responsibility to produce returns $$ for our investors. If we fail, that can mean the chopping block for our VC career. That makes us extra selective with what cos we invest in.
2/ VCs also need to fundraise. We also need to pitch potential investors to fund our funds. Existing funds, need to plan & fundraise in the middle of a fund's lifetime (which can range btwn 2 to +10 years) for the next fund. New fund managers are also raising.
🤔 Asking for a founder: what's a realistic timeframe to get from an idea to an MVP?
1/You may be tempted to believe that a realistic timeframe is overnight. The truth is that it always takes longer and more capital than anyone originally thinks.
2/ Don’t be fooled when you see Twitter/YouTube stories the story of the SF-well-connected founder who raised capital & built a team based on an idea written on a napkin. That’s not what happens for most of us. Reality dictates that it takes a while to get from idea to MVP.