Advanced Fundraising Strategy:
For most, fundraising is a chore. These days, more companies are fortunate to have competitive rounds.

What do you do when you have options? How do you optimize a competitive round?

@wes_kao and I had options... Here's how we approached it.

We named our priorities up-front:
1. Involve investors who backed us in the past
2. Find a Lead who would help raise the A
3. Leverage Lead + large syndicate to create traction (our market is aligned with this strategy as many investors can be instructors or help promote courses)
To make room, we had to raise $4M. If we raised less, we'd have to exclude too many people. If we raised more, the company would be over-valued or over-diluted.

I do not believe in having a valuation over $25M for a pre-seed company. Too hard to beat those expectations.
I asked my fave Series A investors and founders who the best seed fund partners were.

3 people floated to the top. If they give permission, I'll publish them later.

These funds differentiate on:
- Founder-friendliness
- Brand
- Services
Cold e-mail only. I hate warm intros; they are a waste of time and reinforce elitism.

So if the partner didn't respond cold, I probably wouldn't have met them.

Bill did. So did the other 2. We were lucky.
Line them up.

I made a big mistake and had disjointed timing. It almost killed our round.

Fund A I met in T-10 weeks. Too early; lost momentum by partner day.
Fund B I met T-1 week. Way too late; couldn't build enough rapport.
First Round I met T-3 weeks. Goldilocks timing.
Ideally, you are highly regimented about your timing.

Week 1: All first meetings.
Week 2: Second and third meetings.
Week 3 Monday: Partner meetings.

- Share timeline along the way to create momentum.
- Never over-state your funding traction.
- Do not over-rush investors.
Heavily reference check. (5-10 calls with current PortCo CEO's.)

B/c of active relationship, they won't say bad things so you must read b/w the lines.

These are unlikely to disqualify an investor, and more about knowing how to use them best.
Then reached out to past friends such as @simonrothman + @Maidenberg who backed me at Sprig and @rfradin + @bubba who backed me at Udemy.

Life is a long-term game, and I believe strongly in playing it with long-term people. (thanks @naval)
After that, we 100% focused on people who would add unique value. We grilled investors on what they are willing to do and asked them to make written commitments. Codified these commitments into an email.

Each investor provided written confirmation of their commitments.
Examples of commitments:
- Agree to teach a course on platform
- Market us on Twitter or via Email list
- Interview our product co-founder or first engineers
- Do bimonthly 45 min calls with us

Also asked them to follow us on Twitter + agree to read every single investor update
When pitching, we used a deal memo to save time.

A 5-page doc that tells what the company does and why. 30 min calls with prospective investors.
First 15 min: Q&A for us.
Second 15 min: Q&A for them.

Extra call when necessary.
Important to have diversity. Not just race, sex, and geography.

Also diversity of:
- expertise (product, growth, engineering)
- personality (cerebral, tactical, positive, critical)
- fame (too many famous names are a waste; need people who are up-and-coming to actually dig in)
There's a huge difference in mentality of angels who are from pre-2015 era. New school angels are far more willing to do work and understand what that actually means.

We decided to have a mix. Old school investors have wisdom you will need at critical moments.
We got everyone's text and WhatsApp. Already, that has increased my engagement by 4x.

We created a WhatsApp group of our investors too. Still trying to figure out how to use it, but will keep you posted!

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More from @gaganbiyani

12 Nov
It's been a year in the making...

Today, @wes_kao and I are announcing a $4.32M seed round led by @firstround for our new company

We're building a platform for Cohort-Based Courses (CBCs):

The backstory 👇🏾
In 2009 @erenbali, @caglaroktay shared the Udemy vision w/ me. Back then it was a marketplace for live online classes.

They wow'ed me with a Zoom-like product that was ahead of its time (built on Adobe Flash 😅)

I tried to market it for 1 year but couldn't get any traction.
In order to get traction, we pivoted into video-based courses (now known as “MOOCs”). They took off and the rest is history.

I'm really proud of what the Udemy team has done - 400M course enrollments and counting! 👀

Read 12 tweets
22 Oct
I’ve been thinking about co-founders a lot lately.

In 15 years of building companies, I’ve had >10 different co-founders.

They’ve fired me. I’ve fired them. But I’m still friends with 100% of them to this day.

... 15 Rules on Co-founder Relationships

**Read On**
Rule 1: You don’t have to know each other in advance.

@erenbali and @caglaroktay didn’t know me when we started @udemy, but I think all of us would agree the company wouldn’t have happened without any one of us.
Rule 2: Create a pre-nup through role definition.

99% of companies should have a clear CEO. If you are not that person, you report to them.

Co-founders firings should not be done lightly, but if it happens, the CEO decides.
Read 17 tweets
7 Oct
At Udemy, we were 3 first-time entrepreneurs trying to raise seed capital. We made every mistake in the book.

We got 200+ no’s and wasted 12 months fundraising.

We eventually pulled through, just barely. 😅

This thread shares our mistakes as lessons for founders.

**Read On**
We built an impressive product, but we were nobodies.

We thought: we need money to build our vision, so let’s go talk to some investors.


Nobody gave a fuck that we needed money. We needed to prove we deserved their money.
We met some associates and intermediaries who might introduce us to investors.

Few decision-makers wanted to meet with us.

We should’ve stopped there.

If getting meetings is hard, it will take you forever to raise.

Instead, spend your time building product + getting traction.
Read 12 tweets
30 Sep
Most investors add no value, but when they do, it can be company-saving.

In 2010 as @udemy was just picking up steam, eBay-owned PayPal was cracking down on marketplace businesses for violating ToS. Without warning, they shut our entire payments system down.

**Read On**
We had a few months of runway and were starting to raise our Series A. It would take weeks to implement an alternative system, and that would've killed our traction story.

It was all-out panic mode.
We asked everyone for help - many were experiencing the same problem.

PayPal was notoriously bureaucratic at this time and was completely inaccessible to small startups like us.

The "best case" scenario, we heard, was 3 months of downtime.

That would've been a death blow.
Read 7 tweets
23 Sep
Yesterday I made a major life announcement: I’m starting a NewCo after 3 years of exploring

More of you cared than I expected; thanks for the support! 🙏🏾

What the hell did I do for 3 years?

Thought I’d share the back-story...

**Read On**
In 2017, my life blew apart as I shut down @Sprig. Shock + relief.

Even as we shut down, new opportunities were coming my way.

Funders for new ventures. Hotshot CEOs asking me to be an exec.

There’s always opportunity in SV.

What opportunities would I miss by stepping away?
After some good advice, I needed to resist the FOMO.

I know people who grinded for 20 years straight, constantly chasing more success and more money. That wasn’t for me.

I decided on the first rule of my transition: GET AWAY.

I packed my bags, left SF and went nomadic. Image
Read 14 tweets
9 Sep
In the 2001 recession, my parents lost everything, marriage included.

My dreams felt like they were slipping away; I was depressed, angry and had nowhere to turn.

This is a story about how I turned crisis into opportunity by fusing education and entrepreneurship.

**Read On**
I was in a tough spot. We didn’t grow up wealthy, but I certainly had enough. I went to good schools, traveled internationally, and had all the tech and books I needed.

The crisis threw a wrench in everything.

Like many people today, I started to question the status quo.
Slowly, I started to get pissed off. The world felt like it was out to get me. I questioned if the “adults” in the room knew as much as they purported.

My grades slipped and my rebellious nature came out.

It's so easy to devolve into anger when times are tough.
Read 19 tweets

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