Fundraising for first-time founders. This is a first principles thread on fundraising that should help any new founder understand how to raise money and what steps to take.

I've personally raised about $70M from 1500 investors & this synthesize a lot of my advice.

**Read On**
Step #1: Understand Venture Capital

So many founders message me asking for advice on raising capital, yet they haven’t bothered to actually understand how VC’s work. If you don’t understand why investors invest and what they look for, how will you convince them?
VC is a hits-driven business that relies on the top 1% of companies to succeed. Show them that if you do succeed, you’ll be huge by sharing:

1. You have product/market fit, or a path to getting there.
2. If you’re right about #1, you could eventually be a $1B+ company.
Make sure you have a VC fundable business before you start asking for capital:

1. Do I have a product that customers love? Are they paying for it?
2. Can this idea generate them 100x returns within 10 years?

If not, save yourself the time and bootstrap your business!
More on Step 1 is available in this thread which covers many of the major mistakes we made while raising:

- Trying to book meetings without traction.
- Pitched only the short-term vision.
- Why Silicon Valley Hype didn’t matter.

Step #2: Share your vision of the future

The best companies change the world in some way.

- Uber got everyone to start ordering cars from their phones.
- Slack got everyone to message their co-workers instead of email.
- Udemy got millions of people to take online courses.
How will your product change the behavior of millions? Share:

- Your assumptions about the future.
- Why those trends will start this change.

Remember: if you can't answer these questions, just don't fundraise! Find another solution to your business challenges.
Step #3 Find the Right Investors

Investors want to build their own brands, and they have become more open about sharing their beliefs through Twitter, interviews and blog posts.

Look for the investors who are focused on your space and pick off the up-and-coming ones first.
You should know who the 50 investors are that invest in your domain.

Who are the investors to be most bullish on the underlying assumptions that your product would need to succeed?

e.g. If you have a VR Gaming company, find investors investing in VR, gaming or both.
Do your homework before reaching out. Be concise and share your traction.

Do at least 10 outreaches at a time. Don't get emotional about any individual investor. After you get some feedback (even no response is feedback), then regroup and try again.
Step #4 Get the Right Intro

Spend time before launch finding founders or executives that serve as “angel whisperers” in your space.

Talk with the podcast hosts/newsletter writers specializing in your field. How someone hears about you can make or break the pitch. Plan ahead.
If you are a first-time entrepreneur, build connections early and often.

This will allow people to see you execute over time, and a notice the trend in your journey. Speak to them before you have a product, after your launch and after you signed a customer.
Step #5 Use an Incubator

If this is your first time starting a company, most likely you are going to want guidance and experience by your side.

This may involve 3-10% of the company but you’ll get much-needed attention and advice from people who have helped hundreds succeed.
If you have trouble getting into YC (I applied 3 different times and never got in). Try other industry specific incubators or others such as:
Step #6 If it isn’t working...

Do not get mad at the investors. Look inward. There is probably something going on that you can fix. Even if they are biased against you because of who you are, you can’t do anything about that.

Fix what you can in your own control.
Thanks for reading!

A full series on fundraising can be found here:……

For more honest stories about entrepreneurship, education and tech, subscribe to my newsletter (high signal, low noise):

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Gagan Biyani

Gagan Biyani Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @gaganbiyani

2 Feb
Introducing “Superpowers” - the underlying skills that help you succeed at anything

I spent nearly 6 months building this list and almost wrote a book on the subject

Instead, I’ve condensed that work into a pithy (and punchy) Twitter thread

**Read On**

Learn how to learn. If you do, it unlocks everything else. The deeper your learning practice, the more you can learn.

This is the ultimate superpower: not only can you learn new subjects; you can even learn to change your mind, your preferences and your mood.

Dispassionate self-awareness helps you improve, grow, and be happy.

Feedback is a gift. Inconsistency is growth. The more of your imperfections you accept, the less imperfect you will be.
Read 24 tweets
22 Jan
Before Udemy could succeed, we had to solve a chicken and egg problem.

These problems are a constant dilemma for founders. (ie. Funding is needed to scale but scale is needed for funding.)

Here's how we bumbled to a solution that kicked off our $3B business.

**Read On**
At Udemy, we needed instructors to attract students, but instructors would only come if they could sell their courses to students.

How could we get one party to show up without the other?

To compound this issue, we had no money, no credibility and no backers.
Step 1: Fake the Chicken

We had 0 courses but a built-out product. @erenbali created a crawler that went on YouTube and built courses out of YouTube playlists.

Now we had talks from Marissa Meyer & Mark Zuckerberg on our site so any users who came on had something to learn.
Read 16 tweets
12 Jan
I’m amazed at how many high-performers have serious or chronic health issues like TMJ, severe muscle pain, carpal tunnel.

I’ve dealt with my share of health issues; imho it all comes down to stress.

A story about stress and what I’ve learned from managing it...

**Read On**
I woke up with a pain in my side that wouldn’t go away. Hours later, the doctors were performing an appendectomy.

I was out for 2 weeks and it hurt like hell.

I don’t think it was a coincidence that I was fired 4 months later:

After Udemy, I got healthy and built a fitness routine.

My physical health was better than ever, and people noticed. I was the perfect brand ambassador for a healthy food company.

Problem solved, right?
Read 20 tweets
30 Dec 20
OK a bunch of you have asked how I got to 60K followers. Thought I'd share some 7 quick lessons:
1) Tweets keep your followers engaged, but threads get new followers.

Just 3 key threads earned me 70% of my 60K followers:
Thread 1:
Thread 2:
Thread 3:
2) Provide more value than you take.

If you are promoting a company or service, make sure that's less than 50% of your tweets. For me, its probably around 10-25% promotion and 75%+ value.
Read 8 tweets
9 Dec 20
This crowdfunding campaign has me thinking about my start in the Valley.

I knew nobody and had few marketable skills.

I didn’t know the difference between an API and a VC.

Within 3 months, I’d met @erenbali and@caglaroktay and we had started @udemy.

**Read On**
I graduated during the 2008 recession. I was sure I was gonna lose my job at Accenture.

My mother had just lost hers, & I was freaking the fuck out. All first-year analysts were joking daily about the situation.

One day, I got the ominous email from Accenture management...
... The good news: I still had my job.

The bad news: I had to relocate to Washington DC.

I had one friend in DC: Vikrum.

I told him about my dream of working in tech. He gave me my golden ticket: “Check out TechCrunch, that’s what all my tech friends read.”
Read 17 tweets
7 Dec 20
Want to invest in @wes_kao and my startup?

Today, we're debuting a new approach to seed rounds:

... Open Application Investing 💥

We’ve launched a public form where anyone can apply to invest in the company:

Small check sizes welcome!

More details 👇🏾
ICYMI, we closed a super over-subscribed seed round led by @firstround with @naval @shl @ljin18 + more investing over $4M at a $20M cap

More info here -

Many saw it and asked to invest, and we worked with @joinrepublic to make this possible
Investing in startups is the ultimate "who you know" game; you must be an insider and have significant access to capital

The open application process helps us provide access to non-accredited, non-traditional investors AND maximize the impact this has on our company's success
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!