Yuri Sagalov Profile picture
10 Mar, 10 tweets, 2 min read
It's been almost 10 years since one of my most embarrassing fundraising moments as a founder.

A moment so embarrassing that I couldn’t talk about it for years.

It taught me the difference between raising a Seed round and a Series A, as well as some well needed humility.🧵👇
In 2010, our seed raise was a breeze. We were young, arrogant, and deeply technical — a recipe for an oversubscribed round in 2010.

We confidently handwaved away questions like "how will you get customers?" and spent most of our time building product.
In 2011 we started getting approached by Sand Hill funds to talk about a potential Series A, in the way that Sand Hill funds approach startups: They're excited, they're ready to fund, but actually they just want to learn more. Suddenly, we found ourselves fundraising again.
We were building an enterprise product but still didn't really have any paying customers (we had some free users). This time around my handwaving didn't work as well. Some investors politely nodded and then passed, but one AAA Sand Hill partner meeting went particularly poorly.
My first two meetings with this fund went well, and so I found myself in a full partner Monday meeting.

It was a complete disaster.

Once again, I was unprepared for the "how will you get customers?" questions, except this time the partner wouldn't let me off the hook.
We had users, and we even had some users who loved the product. But, ultimately, we were building a B2B/Enterprise product, and in 2010/2011 I knew nothing about sales and go to market. I made the naive mistake of believing that if we build it, they will come.
The partner and I sparred back and forth for a few minutes, until he suddenly interrupted me and said:

"Yuri, hope isn't a strategy."

He then got up and left the room, leaving me to awkwardly finish the final 20 min of the meeting with his other partners.
I left the meeting shell-shocked. Got into my Ford Fiesta, and just drove aimlessly west on Sand Hill towards Halfmoon Bay. Eventually I parked my car, composed myself and drove back to the office.
I spent a lot of time being offended and angry at how that partner behaved in that meeting. And while I continue to think he could have acted nicer — he was also right. We *didn't* have a plan on how to get customers at that point, and we weren't ready to raise our next round.
I think of this incident every demo day cycle when I meet founders who are crushing their raises. I remember what that was like, and I also remember what followed.

Don't be like me — have a plan. And, if you're doing a B2B/Enterprise business, learn to sell ASAP🙂

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More from @yuris

3 Mar 19
I was recently doing office hours with a company that does enterprise sales and that got me thinking once again on the topic of pricing. So, here's a quick THREAD: (1/9)
(2/9) Founders are all too often afraid to charge MORE, and end up underpricing their products. That fear is generally tied to the fear of rejection, and the fear of losing the deal.

To this, I offer a couple of thoughts:
(3/9) First, it is unlikely you'll lose a deal outright from quoting too high a price. Generally if the customer likes your product/service, they'll at least give you a chance to correct/adjust your pricing -- "oh that's way outside of our budget". Great, what IS your budget?
Read 9 tweets

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