Thread by @callmehouck

most people have no idea what VCs look for

i certainly didn’t

then i founded a startup and raised $12M from @a16z

here are 9 essential things to get across when raising VC money:

@a16z 1/ a big vision

VCs know 90% of startups fail

each investment is a risky bet but a small number will return 1000x

founders should focus on how big the opportunity is rather than much of a sure thing it is

@a16z 2/ a growing market

some markets are growing faster than others

a VC's job is to pick which ones will vs won’t

this is why web3 has attracted so much VC money

founders should make it clear that their market will continue to grow quickly

@a16z 3/ the right timing

VCs use broad trends to judge whether users are ready for your product

being early is just as bad as being late

vine was early but tiktok is a $100 billion company

founders should make sure they’re going after trends that VCs are excited about

@a16z 4/ a unique insight

VCs want to make asymmetric bets

they want to see a founder who’s zigging while others are zagging

founders should communicate that they understand something that’s not well understood

@a16z 5/ early traction

VCs want to see that startups are solving a real problem

this can be through either usage or testimonials

@rahulvohra says 40%+ of your users should be “very disappointed” if your product no longer existed

founders should build something people actually want

@a16z @rahulvohra 6/ a moat

what makes your company unique and defensible?

it’s a bad signal if a customer can get the same product / service elsewhere

ideally, network effects mean the experience improves with each new customer

VCs love moats that come from network effects

@a16z @rahulvohra 7/ a good reputation

chances are VCs will do reference checks on you before they offer to invest

a positive reference will go a long way and signal that a founder will be able to hire good people

founders should be sure they have good relationships with past coworkers

@a16z @rahulvohra 8/ relevant experience

founder market fit may be more important than product market fit

experience = speed and speed is the number one advantage startups have

founders should solve problems that they understand well

@a16z @rahulvohra 9/ inherent passion

VCs know startups are hard

they’ve seen founders burn out

founders should demonstrate that they care deeply about the problem they’ve solving

@a16z @rahulvohra if you're a founder or engineer building something big then apply to @launchhouse

we're a community of vc-backed builders with:
- cohort-based courses
- coliving retreats
- peer groups led by coaches
- fundraising support
- and more

apply 👇 launchhouse.com

@a16z @rahulvohra @launchhouse interested in learning more about what founders need to know to grow their startup?

then follow @callmehouck

i post 1-2 threads each week on how to succeed as a founder

@a16z @rahulvohra @launchhouse tldr, you want to show VCs that you have:

- a big vision
- a growing market
- the right timing
- a unique insight
- early traction
- a moat
- a good reputation
- relevant experience
- inherent passion