How to Fundraise at Female Founder Office Hours with Jess Lee and Jenny Lefcourt

We're super, super excited to be throwing our very first female founder office hours. Welcome. Oh, slide's not progressing. Technical difficulties. I'll just stand over here. So there we go. So welcome to everyone. On behalf of all 10 ladies on this slide. We decided to get together at a dinner that Aileen Lee hosted. Aileen's over there. She gathered us to sort of talk a little bit about what we could do for women in tech. And we decided that one of the best things we could do would be to start a community and bring together our little community of women in venture with a much larger community of women starting companies. So Aileen from Cowboy, Yuri from Forerunner, Jennifer from Reach, Jennifer, Jenny from Freestyle, me from Sequoia, Kirsten from Forerunner, Maha from Kanin, Renata from Lux, Sarah from Benchmark, and Chantel from Reach. If you guys could raise your hands and show everyone where you are. Yeah. So make sure to say hello to some of these really friendly faces. So real quick, we'll introduce ourselves and then go through the talk. But I'm Jess. I'm the newest partner at Sequoia Capital. Sequoia is a 45 year old venture firm that's backed by like Google and Apple, Nvidia, and then more recently Airbnb and WhatsApp. I'm on the early stage team, so I do everything from seed to Series B, but we also cover all of growth. I've done two investments in the last year, but before that I was the CEO and co founder of Polyvore, which is in the fashion and shopping space. I was on your side of the table and I pitched many times. And I was a female founder trying to convince the 93% of male VCs that an app that lets you shop for dresses all day long is an awesome thing. Not like their worst nightmare, but we managed to pull it off. We grew to 20 million users, we raised about $22 million and we were acquired in 2015 by Yahoo. On a personal note, I really love drawing, manga, bacon and cosplay. So that's me.

And. Hi everyone. Oh, sorry. I'm Jenny Lefcourt. You want me moving? I'm Jenny Lefcourt. I'm a partner at Freestyle Capital. We're a seed stage VC. Right now we're a $60 million fund. Our next fund is a $90 million fund. We do seed stage investing. Some of our investments that you may have heard of Intercom, I'm. I don't know. Intercom, Digit, Wag, Patreon, Narvar, Betterup, the Moral of the story is that we're generalists and so we invest in B2B, B2C. And I feel really equipped to be up here today because I spent a lot of time being you, more time than I've spent being me right now. And that I raised a lot of capital for my first company, which is weddingchannel.com, my second company, Bella Pictures. And so I pitched a lot of male VCs on these women businesses. And so hopefully we'll shine a little light and demystify that process today. A happily married mom with three kids, Liv and Marin, and then just made me put up something fun. So I mentioned that I'm not fun, but she made me put up something fun. And so I love to scuba dive with sharks, which is random but enjoyable.

So why are we here today? So these are some of the stats around women in tech. And it's been an interesting and eye opening year for our gender, don't you guys think? With everything from the pussy margin beginning of the year to some of the revelations across tech Hollywood media around bad behavior. But we think that in tech, these are some of the stats that statistically speak to how there's still a problem and there's a lot more work to be done. So as you know, we make up 51% of the population, yet only 16% of founders are women. Only 7% of VCs are women, and only 2% of VC funding goes to women. I'm not going to argue that it should be 5050 because I think a lot of people raise too much capital. It's actually better to be capital efficient, but the proportion doesn't seem quite right. So like I said, what we did is we got together with a dinner hosted by Aileen and we started talking. And this is one of the first dinners, but we've had multiple ones since then. We started talking. I think we started meeting in October. So we thought, what could we do? And we decided, hey, we're a community of women helping each other. Why not broaden this into a larger community of women helping women, Especially with the goal of increasing the number of women led companies that are very, very successful that drive massive returns. So that's the goal. That's why we're here today. And thus female founder office hours were born. Like I said, this is, we only started October. It's been a very scrappy sort of thing that we've put together. So apologize if you guys are our guinea pigs if anything doesn't go right today or we didn't Communicate correctly around, like, who's getting office hours. We'll try to sort that all out as we go. But we really appreciate you guys coming out to our very first event and being some of our guinea pigs.

And just a little bit of housekeeping before we go on. If you're here but you didn't register, please register so we have your information and can stay in touch. And then the second thing is a lot of you asked for the one on one office hours but didn't get them. And we didn't respond to let you know you didn't get it. If you didn't hear back. We just didn't have enough slots. So as Jess said, we're living, we're learning, we'll get better. And so there may be a shot for our next event.

So from your perspective, what should you try to get out of today? I think there's really three things. One, get some good advice on startup building. Company building, not just from the investors, but actually from each other. Because I think the most important thing and something that I definitely neglected as a founder starting out was building out your network, right? Because every connection you build in this node strengthens your ability and increases your odds of success. You never know what happens when you have that random conversation and someone's like, oh, I had that same problem last year, or I know the right person who's looking to fill that role right now. Those little moments matter a ton. And I think many women, myself included, are so heads down just building their business. They don't take the time to go and build those networks. So it's really, really important. So the higher level goal would be to make one new founder friend here, right? If you can walk away, if you can walk away with one email address of someone who you connected with that you can go to through the ups and downs, that's really, really important because startups are really freaking hard. Every possible thing that can go wrong will go wrong. And there's all these moments where you're like, oh, why did I start this company? I felt that way so many times at Polyvore and ultimately it turned out fine. But in those low moments, you need people to rely on. You need other folks who can just those little connections give you that slightly better odds of climbing all the way to being a market leader. And everyone's path is different. But just make sure you meet each other and spend time together. Because we really need this support network of women in order for us to all like, elevate women in tech.

So we're Going to walk you through how to fundraise. And like I said before, the goal is to sort of demystify the process. If you can understand what VCs are looking for, then you'll do a better job at explaining your business to them in a way that resonates. And so we're really going to spend a lot of time on the pitch, and if we have time, we'll kind of walk you through a little bit of the process.

So going through the pitch, first thing you have to do is you have to understand the VC and understand their motivations. You have to kind of know your audience. And one of the most important things to remember about venture capital and startups is that there's this power law, right? So a very small number of companies drive all of the returns, and most companies actually fail or don't return capital. And that's just the law of startups, because it's so, so hard. And even if you are on this curve, you end up learning so much that I think it's probably worth it. But just remember that because of the power law, a lot of venture capitalists care more about your potential for upside than for minimizing downside. So just understand that this is how. This is the law. This is the power law, and it's really important and we'll come back to it.

And I cannot stress enough how important that is because it really drives how VCs think. And. And when I was a founder, I thought I understood how VCs thought I'd pitch them so many times. But the reality is I didn't fully understand that power law. And once you do, you understand that they really need to understand, not just are you good? Is it a good idea that makes sense, but that this could be a massive business because that's what drives their business. And so they're looking to see is there a pot of gold at the end of the rainbow, right? So if everything you're saying is true, that problem is real, that solution makes sense. Sense. If it's not going to be massive, it's not something that they usually want to invest in. And so they want to know that there's a big lucrative market, that there's a really differentiated product and approach, not a little bit better, but a 10x better. And they're constantly thinking in their minds, why now? And you don't have to pitch saying the reason why now is, but you have to show the macro trends and show how the market landscape is changing so that they understand this business, this opportunity didn't exist just two years ago, it barely exists now. But for sure, it's inevitable that this solution will be the solution in two or three years. That's what they're looking for. And then the second part that they're looking for, and this is very much focused on seed, by the way, when it's a. It gets into metrics and traction. So we're very focused on seed throughout this whole session. But is that you're the team to get to the other side of the rainbow. Right. And so there are a lot of attributes that they. That. And I keep saying they. I am one too, but that we. I forget that there are attributes that we all look for in our founders and we all have different lists, but they're pretty similar. And you can even just Google it. But it's basically like people who are resilient, smart, can attract top talent. There's a whole list of attributes that you need because that path that just showed, it's really, really hard and it takes a lot to make it through. And then the other thing that we look for is that there's some unfair advantage. And I've spoken to so many women say I don't have an unfair advantage. He's like, well, go a little bit deeper because you might. So a story of mine is that@weddingchannel.com, we aggregated the gift registries of all the major retailers and we're pitching it to VCs. And I didn't have a retail background, I didn't have a tech background. We were pitching it to all these VCs. And there were a few other people doing similar businesses and they really pushed back on, why are you guys working with the retailers? You're swimming upstream. Now's the time to go have inventory of Wedgwood, Crystal, China, et cetera. Get 50% margin instead of 15%. And we had to explain to them, that's very interesting, but it's going to take a decade or two, which is exactly what it's taken, before these consumers are going to behave that way. So I can have 50% or 60% of nothing, or I can have 15% of a lot. And that pushback and that insight was very different than the other male started companies in the same spot. So that was our unfair advantage. We knew the market wasn't just because we were women. We actually understood the market and how it behaved and. And that was our unfair advantage. So when I talk about it, just make sure that you go deep because you may have one that you're not even aware of.

So I would say based on that, this, I think the number one mistake that I see a lot of women make as founders is not selling the dream large enough. You know, there's a big difference between this, which is what I hear a lot. When you get to the financial slide, a lot of women will say, even with the most common conservative revenue assumptions, I will still be $100 million business in five years. Which is actually amazing. That's huge. Right? But you have to understand, a lot of other founders go in there and say, I will be a billion dollar company in five years and don't explain that they have used their most optimistic revenue assumption, right? So just remember that you are a data point in a large like many pitches that we see each day. And so you have to remember like this is not like it's fine. Obviously you want to be authentic, right? You don't want to be like, I'm going to be a billion dollar company if you don't really feel it. But what you can do is show a second slide that says, and here are my optimistic revenue assumptions. A billion dollars in five years. The other thing I sometimes hear is like, well, you know, if it doesn't work out, potential acquirers could be blah, blah, blah, Disney P and G D, right? That's also VCs don't really want to hear that you're already planning for your company to not work out and will be acquired. And that's actually, you know, being a large business unit inside of a big company is something to be very, very proud of. That is still something to be proud of. But this is not the moment, the pitch process is not the moment to be sharing that piece of information. So what you should say instead is we have a shot at being a billion dollar company. This small thing that we're starting today, because I'm a seed is only our first product. It's one in a suite of products that I hope to build one day and then we will be the, the next Disney or P and G or whatever. Insert your company name, your potential acquirer's name there because that shows that you have the ambition, that there's a possibility and you're plotting a path for the VC to see how you could be a large company one day, even if maybe today you're only selling one thing, right? So just make sure you don't only focus on today and focus on that far out fissure and don't sell yourself short.

So we're going to kind of walk you through the anatomy of a pitch deck. I'm going to talk about what you're going to present and Jess will play VC and tell you what they're looking, what we. Sorry, what we are looking for. So on the team, you want to talk about who you all are and how you came to this idea, this revelation. And what's really important, I think, is that you hit the high points. But I've seen founders where they go on for about 10 or 15 minutes about their founding. When I was at Symantec seven years ago, I learned this and it's not as relevant. And so you really want to manage your time, right? You have a limited period of time and you even more so have a limited period of attention span. So when you open up, you have to be quick on who you are, it has to be relevant to what you're doing. And then you'll get into the other parts we're going to talk about. So, yes, tell them who you are, but keep it short, keep it pithy, because you will lose your audience.

And what the VC is thinking about at that moment is, is this founder special in some way? Are they compelling? What's that high accomplishment that they have achieved so far? What's their unfair advantage? That I can see. And then one of the reasons to share the founding story that some people gloss over is because sometimes there's like a compelling mission or a reason that a founder is doing something. Like if you are starting something because like a healthcare company because you personally suffered that health problem or someone in your family did, those are things, those very personal, vulnerable stories are actually really powerful because they are the things that give you sort of the resilience and the grit to stay the course. Because like I said, startups are really hard, right? You want someone who you know will stay the course, who will stick it through even when the going gets tough. So sometimes it's good to share those things.

And just a little side fact is that one of the things that is completely correlated to success of a founder or resilience of a founder is if they have a mission that's higher than themselves. And so that calling actually does matter. Forget even VC math like that actually does matter. So even I would say reminders yourselves while you're working on it, why you're doing it. And if that calling can be greater than you, that's great. The next thing is we put it under problem, but it's a little bit higher than problem. You're going to educate the audience on this market and it's going to be A combination hopefully of big and changing. So there are these macro trends that are happening that are happening now and are going to continue to happen that create either A a problem or B an opportunity. And so you really need to show that we have competitive landscape in here. It's not really where it belongs. It's not the time to say you versus the others in ex off features. It's really a time to say there's this massive market, it's undergoing massive change of this, this and this. Fast forward three years, a solution like this is absolutely inevitable. Whether it's us or someone else, this will exist. And so you really have to paint that vision.

So as a vc, what the VC is thinking is, is this market large enough? Like is there even what's the maximum cap on this market? Right. If you're solving a problem that's very, very niche, this may be this business. You know, what are the comparables? Like, oh, how much is using the P and G or Disney, how big could this possibly get? So that's something you need to educate them on. And then the reason to explain competitive landscape and macro trends is because the VC is evaluating. Is there anything about this market structure or the competitive landscape that makes it impossible for you to win? Like you are directly competing with Google at the exact same product and they have much better distribution or Facebook has much better distribution. Does that make it impossible? And conversely, is there something that's going to accelerate you winning if you're doing for example, live streaming video right now, right now, at this moment in time, there's a window for live streaming video to get unfair amounts of distribution on Facebook, Snapchat, Twitter, et cetera, because all of them are fighting to win the live streaming sort of video war. So Facebook often boosts the type of content and then makes it paid later. So you can't get promotion anymore. But if you're doing video, there's a moment in time. So that's an example of a trend, a shorter term trend that might accelerate your business.

And so it leads into what the solution is, the product and vision, if you have traction and metrics the business, where the revenue comes from. And so one thing to keep in mind is. And so Jess sort of talk. Am I okay? Jess sort of talked about this earlier and we'll pick it back up is you're going to have this conflict between this big vision that you're selling and what you're doing today. Right? Everyone starts at the bottom of that hill that just showed, right. And you're climbing to the Top So you have to explain what the top is and then you have to explain where you're starting. And you don't have to make it look like that, you're going to make it look like that. But it's a really hard, hard thing for people to do. And so I think it's worth spending a few minutes on. I'm working with a few of my portfolio companies on it now is they're going to raise their A. And it feels strange because you're selling this thing that's big and important will be multiple billion dollars of the future. But then you have to explain. So where I'm starting is here because this problem is acute and I have product market fit for this and that by doing that puts me in an unfair advantage or a unique position to then go on and do this, this and this. And you show them the path from where you are and what you're doing today to that big vision. But it's a one, two punch, one without the other. If you're just about the pain today and this is what I have and then we have a few things we can add on in the future. Less compelling if you have this big vision but where you're starting doesn't have any sort of place in the world today. But it's something that will hit in three years. That's also hard, right? Because that's, that's a lot of patience and a lot of capital. So the combo is really what resonates. And so this idea of sort of a short term product roadmap and a long term product roadmap is important.

And at this point the VC is thinking like is this product compelling? Is it working? Just looking for some signs like if you're building a consumer product, like does it feel like a good product? Is it branded? Well, if it's launched, like looking at some of the retention metrics, retention is one of the most important ones. And then business model, you may not have one yet or you might, but the VC is thinking, is this a feasible monetization strategy? Has this been done before? Is it even possible to pull off?

And you all are probably at different stages in the business. But something to keep in mind is VCs are also thinking about risk at every stage. You're de risking your business for them. You've proven something. So whatever you have proven, you want to share. And then you're also going to talk about what's coming next so they understand how you're spending your capital, what milestones you're going to Hit. And each time, just remember a milestone is sort of your business looks different, it looks safer, it looks more, sure, it looks more lucrative. And that's really what it's about. So something that I personally find to be a turnoff is when a founder says to me, so as soon as I get capital, I'll begin looking for my team, I'll begin doing this as if that's like their starting point. And most of us like to invest in people who are on a mission, right? And they can't not do this. They won't be able to kind of go through life if they haven't given this a shot. And so you want to feel like they're going and getting capital along the way is something they need to do. So that's really important in sort of the energy and how you present those milestones.

And then the final thing the VC is thinking about after they've heard the whole pitch is they're doing sort of this cost benefit analysis in their mind. It's sort of like, okay, given the traction, given this person, is this worth the risk? Right. Like the capital risk, my time and effort of working with this person potentially for the next three, four, five, ten years, is it worth it or should I wait till later? Right. Would it be better to wait a little bit longer to see. See how things go and then invest? So that's what they're thinking about. So you kind of want to balance urgency and now is the time with making sure it's a combination of like, maximum upside and you are going to be great to work with and sort of your funding side so that it's a cost benefit analysis, not a, is this a good person or is this a good company? It's divided by the amount of work it's going to take for them to work with you and how much money it's going to take. I think the most common mistake that I see across all genders is not expecting explaining the problem properly. You're an expert in your space. The VC you're talking to might not be so, you know, sometimes, let's say you're doing. Let's say you're a doctor who trains other doctors.

Hi.

If you don't explain what medical education is like, then the VC is going to start asking you questions about, you know, so how do you train? Wait, you use a dummy. Wait, how does this work? This is a conversation I'm referring to a couple weeks ago, but it's really helpful to be. All right, this is a day in the life of this person whose problem I'm solving and walk it all out and say, this is how it works today, and this is a specific thing I'm going to fix and it's going to save this much time and this much money. So quantify the problem, but explain it really crisply. The second thing you can do if it's impossible to explain. A good example I use is tampons. If you are pitching male investors a feminine hygiene product, it's really difficult for.

Them, but so fun for you.

Yeah, I mean, I think, you know, I think women are known for having more empathy, right? So maybe we expect the VC to be empathic, but, you know, VCs are busy. It's on a timeline, right? So instead of relying on empathy, really explain the problem or use an analogy, right? So for a tampon, what you could say is, look, it's this thing we go through every month. You remember how Dollar Shave Club was sold for a billion dollars? The reason why is because it's a consumable item, that personal care that you have to use every month, and then you run out and you need another one. Tampons are like that, but even more pressing, you need it even more. It's not like you can't use them. Right. And secondly, it's a new distribution channel, right? Like if Unilever bought Dollar Shave because they wanted direct access to consumers. So you buy your razors, they can slide in all other kinds of Unilever products like soap or whatever, shampoo. This is the same thing. But tampons. Right. And targeted at women. And women control way more of the household purchasing budget than men. So this is like this times 100. That's like a way to use an analogy. For Polyvore, we were sort of like a fashion community site. So I could not explain to men that, like, oh, it's, you know, imagine that you love shopping and fashion. So what I did was I just took a stack of September issues. Vogue, Elle Marie Claire. We just tossed them onto the table and said, this one set of issues is $100 million of advertising in one month. Now imagine that on the Internet. And they're like, oh, we get it now, I don't have to understand why people read them, but I just know it's a lot of money. So that's, I think the number one thing to spend time on is actually the problem, not necessarily the solution. I think people go straight to the solution without explaining the problem problem.

So these are sort of tips or sort of the softer side of when you're pitching that I think is worth discussing. So I'm a huge believer in founders doing decks. I think that the discipline that comes from it is so much better. So even if you're just going to have a casual conversation, you want to know exactly the key points you need to make when pitching. What resonates and what story you're going to tell, what data you're going to show that makes that point the best. And so I often talk about, like, Mark Twain's comment, like, you know, I would have written a shorter letter, but I didn't have the time. It takes time to get your pitch tight. And so putting it on pen to paper or, you know, creating a deck may forces that it's a forcing function. Whether or not you use your deck, that's up to you. You know, Jess and I were talking. She's like, why would anyone not use a deck? I'm like, well, when you're meeting in a coffee shop, some people want to just have a conversation. They want to look like they're not fundraising yet. So there's lots of reasons. So no matter what, make it and then use it or don't use it. One trick I've seen, or one thing I've seen people do is say, hey, I have a deck. Would you rather just have a conversation or would you rather go through the deck? And then you'll find out if someone's like, Jess or someone doesn't care. But the beauty about doing that too, is that if you practice it, and you should practice it a lot, you'll just have it ingrained in your brain. And so what happens is people say, God, if I practice it, I sound like a robot. It's like, yeah, if you practice it three times, you'll sound like a robot. You practice it 20 times, you will be fluid. It will feel like the first time every time. So practice, practice, practice. And what that sets you up for is to be fluid and not lose control of the meeting. One of the biggest things I've seen happen is an entrepreneur starts to talk and a VC interjects with the question. Entrepreneur answers the question. Before you know it, the VC is running the meeting and it's a Q and A session. And the founder can feel really good. Like, I answered those questions really well. But when they leave, your main points that you needed to get across to look like the dragon on the left didn't come through. You have a limited period of time. And so it's a little bit of an art. But if you know your pitch inside and Out. You have to answer a VC's question. A VC won't be able to go on if you're like, great question, I'll get to it in slide 10. Doesn't work. But if you say yes, what color is the sky? The sky is blue. And I'm going to talk a lot more about it. But what's important to note is that the green grass, and you bring it right back to where you wanted to without it seeming force. But it's so important. Do not lose control of the meeting. But you also can't be an ass about it and say, like, I need to control my meeting. I need to be back on slide three. So, you know, that's where the joy of it all comes in. So another common mistake I see is founders feeling like they really want to prove that they know their stuff, right? And so I've seen founders come in and give every last detail about the market and data dump on you. And the truth is, when that happens, you may feel good about yourself and you're so knowledgeable. But rather than painting this big vision and this exciting team that you want to work with, VC is left more with a headache than excitement about what can be. You have to stay high. And the day that they have, you want to be prepared. You can have appendix slides, you can be prepared in your head. So when they ask the question, go there. But don't assume everyone needs to hear everything that they may ask about. The goal of the meeting is to get the next meeting okay. So if you leave them excited and now they want to really understand the economics, that's much better than sort of vomiting everything on them and hope that they get excited. So it's just investors want to back. I mean, it's a long journey. And that whole path, we're there with you, we're on that path. And just like, it's so important who you pick as your co founder, it's so important who you have as your partner. And we feel the same way. So we're looking at the team saying, are these people I can work with? Are they honest? Are they authentic? Do they have a get it factor? Is there chemistry? So don't you have to be you? But just keep that in mind. It isn't just something you're selling and then you leave and did you make the sale? Did you not? You're actually seeing if there's a relationship here. And so don't lose sight of that. You should be learning from every single meeting. If you're not like, or at least Every other meeting, every time you should leave and say, what could we have said better? God, I felt like their eyes glossed over when we did this. I feel like this point is when people lean in, like, if you should be learning along the whole way in your pitch, also you should be understanding that you may be learning about your business, right? And so sometimes founders get, I won't say defensive, but they're a little bit. It's great to have confidence in your beliefs and why you believe them, but you want to have that conviction, you know, strong conviction, loosely held. But this idea of this open mind to learning and so interesting that you view it that way. Why? Because where we came at it was this. So you need to be thoughtful and strong, but also open minded because that's important to who we want to work with. And then the last thing is, and I wrote a blog post about this and people sort of laugh when I say to enjoy the process. But the more you enjoy the process, one probably the more successful you'll be. You'll be more looking like or feeling like someone that the VCs want to work with and you'll learn the most that you can learn. So you're going to go through the process anyway. You might as well sort of look at it that way. So you're meeting with really smart people, people for the most part who have seen a lot and done a lot. And so even if you don't agree, listening to them, considering it, and then coming out in a stronger place, either you're more sure with what you were thinking, or actually, I think there's something there and you investigated it, it's great. And so you should come out the other side, ideally with capital, but. And even more knowledge than you started with.

I will add to that. I do think it's important to remember that these conversations are two way dialogues, right? So make sure you get your questions in too, but don't ask, so what did you think? Because then you're kind of putting the VC on the spot to give you an answer right there. And they'll be like, oh well, go back to my partners and come back to you and talk to you. So what you should probably ask, which also shows that allows you to learn, is like, did you see any weak points in my arguments? Or what are the key risks you're concerned about? And then that gives the VC it's a chance for you to hear how they think about the market. And particularly, I think the market is one of the areas that as founders, we don't Think about as much. We just focus on our products. So thinking about market structure, competitive landscape. Remember VCC, tons and tons of companies, you're probably the 50th company they've met in your space. So that is a great opportunity to learn something interesting about the market. So make sure you ask questions also. And you're also evaluating to see is this someone that you would want to work with for the next five, 10 years.

So we only have 15 minutes and I want to make sure we get questions. So I'm going to just fly through this so fast. So I'm sorry to do this, but just something to keep in mind is when you're trying to think about how much capital, when and from who is that. You're dissecting your business, you're figuring out what's my next milestone, how much capital, how much time is it going to take, Basically double that. And that's what you should raise. And then you figure out who's the right audience for that amount of money. Right. So if it's 300k, probably none of us. Right. If it's 2 million, probably a lot of us. If it's 4 million, some of us. And so know your audience, know where they invest and know what makes sense. It's okay to have a range, but you need to have some thought process behind what you're raising and why. I think just to give time for Q and A.

Okay, all right, so Q and a time. Ask us anything. There's many women up here as well. Okay, why don't we pass it around?

So when, if I'm looking at a VC firm who really wants to invest up to 5 millions but we need 8 millions, is that worth trying? Or when they say 5 millions is 5 millions and not any penny more?

So my experience has been, you're saying if you're open to five to eight, do you say five to eight, or do you say five or eight?

Is that if I'm looking to raise $8 million, but I see that there's really a VC firm I'm interested in, could be a good match, but they say on their website, or we don't invest more than $5 million, is that worse talking to that?

Because we need more anyway, it is worth talking to them because if they invest $5 million and you raise 8, most of time, like almost every round I've ever done has other VCs or other investors join in. So it's okay if they're not the whole thing.

Yeah, yeah. I would say to err on the side of asking, especially if it's someone you like. I think there's this. There's studies show that, like, when women see, like, a job application for, like, you need five to seven years, like, I have four, I better not apply, versus other, a lot of men would be like, I have three. Perfect. I'll apply. So I would say ask. And it's true. You can usually fill out your round with more VCs, or you can say, hey, I'm worth a special exception.

It often goes the opposite where you're raising. They want to put more capital to work. And so you're speaking to someone who doesn't want to write a check for less than $8 million and you're raising 5, that gets trickier. But then you still should go in to just ask the question that. Because they may convince you that you should raise more or they may think you're so special they're comfortable writing a smaller check. You guys can just repeat the question, okay? Oh, yeah.

So for like, fundraising, you mentioned to keep the timeline tight. A, what's the general, like, time that you should allot to, like, go on your fundraising round? And then B, like, sometimes some VCs get back to you earlier rather than later. And if there's other, like, partners you'd rather have, but you want to try and, like, wait for those terms, what's kind of like the best way to communicate or at least kind of manage expectations with other VCs while you're starting to talk?

It's a really interesting question. So she's basically asking, how do you manage the VCs, right? Of like, the process getting people to move, you know, what do you tell them? When is that a fair? So it's a tricky one. So I do talk about making sure you have a process. And so know that. Okay, I'm going to speak. One of my favorite methods is have a pitch ready and you speak to a few that are friendly, that you'll get the honest feedback back or somehow know someone you know. And then you go to your top list, right, of people, and you kind of want to hit them around the same time because now you're ready to rock and roll. And so you've got your pitch and. And you go and you put it out there to enough sort of top of funnel and see who's moving through that enough are digging in. And then if you're seeing a lot of dropout, A, you're learning and getting better, and then B, you add more into your funnel. When people are moving, that's great. And so the question is, when you have someone who moves, but then there's someone else you really want, they're not moving, how do you handle that? And so it's a day by day situation, but it's really nice as a vc, when a founder authentically doesn't say, hey, term sheets are coming in next week, if you want to be a part of it, let me know, that's a turn off. But when a founder says, I really would love to have you involved, one of my favorite lines is, I don't want timing to be the reason we don't get to work together. So just full disclosure, there are a couple firms really digging in. So if you're interested, I can get you anything you want as quickly as you want. Just want to be, you know, let you know that feels really good. And that could get you to speed someone up who maybe wasn't on the move. So you have to like walk that line. The false urgency doesn't usually produce, but the authentic transparency does. But the key is that you have to have momentum to trigger that second.

Yeah. The thing to keep in mind is that for many VCs, it's almost always better to wait for more traction. Right. So you have to balance that. I agree. Making up the false deadlines doesn't really work. But there are little things you can do because FOMO is a big driver. So if you can do things like, here's my data room, which kind of implies that someone else due diligence already, or you know, I really, really want to work with you, but you know, there are other. Yeah, like those things do, do matter. I would say use them, but don't definitely. Don't lie about anything. Do not lie about anything in your entire process is what I would say.

And so another little one is, listen, I have to be up here next Monday anyway, and they're like partner meetings. Sorry, you had a question?

Yeah, just thank you so much for holding this space for all these ladies. It does not appreciate this burgeoning.

Thank you for everybody showing up.

And secondly, you know, the, the as you are fundraising and you do need a team, it's a lot easier to get the team with capital funds to pay them. So could you address the chicken or the egg with the funding and the team and how to basically balance that?

Yeah, I mean, that's a tough one, right? How do you balance the chicken and egg problem of like, I need the funding in order to get the team, but I need the team in order to get the funding. That is a really tricky one. I think in the early days you're looking for a certain type of person, right? The type of person who either believes in the mission or knows you and believes in you and is willing to take the risk. I think the more transparent you can be about the funding process, if they feel a level of comfort like, oh, you're pitching right now, you expect to have answers, then at that point it will convert. Or just giving them more equity up front because they're the ones who took the risk to join you before there was any real salary. But it's kind of a. You leverage equity and certainty and that trade off, like in salary and equity, like you are constantly tweaking those two things as the company grows bigger and bigger.

The other thing to keep in mind, and this is a little unrealistic and I'm aware of it, so it's sort of a bias, but a lot. A bias that a lot of VCs have is that you want to back a team that is, that is investing in themselves, right? So you want us to invest. Are you investing? And so when you see people who say, once we have the funding and can pay ourselves, then I can get the people to work on it, it's a little bit of a sign that you're not all in, right? Like some way, somehow we are making this happen. We may get the check tomorrow, it may take a few months. It doesn't matter. We're on that mission. And so it's a little bit of a not as exciting when that's not the makeup of the team. However, there is reality. There are mortgages and rents and whatnot. So it's okay to say, so this team we're all in, we have so and so working part time evenings and weekends. And as soon as we can pay them a salary that can allow them to eat, they'll be joining us. So it's like you've lined it up, but you can have a few exceptions. But if everyone's waiting to pull a salary, it's a sign of a team that's not actually investing as well. And once again, I realize that's a little separate from reality, but it is a bias.

I would also say when you're trying to close someone who's not certain, there are things you can do, like make it a consulting agreement at first or an advisor and then convert them. And I would say for really special people, go all out. I had a CFO who wasn't really sure about us, so I Got her to join as a consultant. I, like begged. I knew she was the person I had to work with. Got her to join for a few months, right, as we were doing fundraising. And so she saw behind the curtain and got to see the numbers and like, oh, this is a more interesting business than I thought. And then at the end when I was like, I need her to join, she went on vacation in Hawaii. I stalked her and figured out where she was staying. I bought a huge bouquet of flowers, a handwritten note, FedExed it to Hawaii. So it showed up in her hotel room. And I was like, this could either be really creepy or it could work. But, you know, what do you have to lose, right? Seriously, what do you have to lose? They might just say no, right? So she joined and it was one of the most game changing hires at Polyvore. So I would say you don't just have equity and salary at your disposal. You have all your charm and your over the top moves to try to close someone.

Quick question about before the fundraising process, potentially building the relationship with different VCs, what's your take on that? How much of it is a waste of time versus an investment in your future?

So VCs are pretty busy, right? So from their perspective, it's like, I want to meet soon, smart up and coming people who'll be interesting and will start a company one day. But there's a little bit of like, okay, they better start a company one day. So I think that you have a.

Company, but maybe it's for the next VC at the next stage.

Yeah, I think that's fine. Then I would do it. I think when I get emails from people who are like, oh, I might start a company one day. And right now I'm like an engineer at some company and I just started working, I'm like, oh, do I take that meeting or not? But if you're like, I have a company idea, I want to run it by you, I think that then you're much more likely to get the conversion. And then also pointing out, I think a lot of people cold email and just say you don't want to be the recipient of a dear sir or madam kind of letter. If it's more like, hey, I know you're an expert in this and I saw your history or whatever, a little more personalized, tailored note that usually tends to convert better.

And then I do say, if you're seed funded and you're thinking about a. I think having a handful that are interested or a handful are. So it's not too distracting. Those conversations are not only good for them because they kind of keep an early watch on something, but then it's also good for you because you're really acutely aware of what your next milestones are because they're giving you insight into what they would want to see of when they'd be interested. Yes.

How make or break is it having a founding team versus having like a solo founder?

Because.

I've heard that like the having a team is better, but at the same time, if you haven't known those people for a very long time, like, that could really be the reason you fall apart pretty quickly.

Yeah. I guess I would just say there are all these biases that different people VCs have and it's pattern recognition. Right. So at Freestyle, my partners were partners in two very successful startups, the two of them. So they really love teams of two. Right. They do where other people have seen teams of 2, 50, 50 break up and then it gets challenging and founder breakup. So they have a bias against that. So I think just do what's best for your business. We'll Talk about what VCs need all day long and there's a lot of knowledge there. But at the end of the day, you know what's good for your business. And if you shouldn't bring someone in as a co founder and you're just doing it because you think that's what VCs want to see, in the end, it won't produce for you. So if you're thoughtful, you do the right choice, make the right choices, then you'll find a VC who's totally fine with. With that. In my opinion. I don't. Yeah.

I think we have time for two more questions.

You pick them.

Oh, no. Oh, wait, no, you. Sorry, you already asked the question. Sorry.

Yeah.

One more tactical question about the pitch. When you're describing the market and you had that slide about go for a billion in five years versus like the conservative.

Right.

Does your pitch talk about, you know, here's where we're going to go, here's a huge market and even though we're starting here, when you describe the market or do you say for the solution we're going after, here's the market, it's still really big, but it's not necessarily that. If we had addressed all of these segments together, we scaled our solution across these different pieces, then we would have larger markets.

I have a bias for or a strong point of view for. At Seed, you have to pitch the big vision and then explain so get them excited about that and why that is the future. Right. Like cannot be denied and that you're going to build it and this is where you're starting. Everyone has to start someplace. Right. And then explain how you get there versus the we have this and then here's our next circle and our next circle and our next circle. And it feels a little bit like I know what I have is too small. I'm going to keep expanding. I know it's exactly the same thing. It's just mentally you're going to. You want to anchor someone big and then where you're beginning versus where you're beginning and then pointed to the top.

Yeah.

So even if that market sizing is like five, 10 years out, go for that bigger, bigger number.

So the number is a tricky thing because you could lose some of your audience in that when you start throwing out numbers that are irrelevant. Whatever. I know we're short on time so I'll skip the case study. But anyway, you have to be careful that your number has to be relevant to something that's actually a number that matters to your business. And you don't pick the biggest number in your market. But yeah, you do want to. I think you want to show the big vision and how big of a market that is is important.

Last question.

How much of your personal life do.

You think is appropriate to share?

So for example, I have two small kids, but that makes me really efficient as well.

And I think they might be be.

Wondering subconsciously these things anyways. So like how do you address those personal aspects or are you not thinking about it?

I don't think you guys should think about it. I think that, I mean if you're smart and hard working, everyone has their things of how they balance and so your audience may be wondering or thinking. And so I'm not going to claim that that's not in but I think the more you just go in and that's not relevant. Right. I'm going to make this happen. I think it becomes less of an issue. I don't know if you have a point of view on that.

Yeah, I would say focus on things that make you special and different from everyone. Right. Like any mom could claim I have two kids, therefore I have to be really efficient with my time. So that's maybe not the most special thing for however, if your company is selling like is in the kids space and mentioning that your mom is very relevant. So then I would include it. Yeah.

And the thing that I think is really important as we stand in this room and kick this off is that about three years ago when I became a vc, I did something, a women entrepreneur, whatever thing. And it was the women were almost deer in front of headlights saying, how am I supposed to raise VC money knowing that it's near impossible for me to do so? And I thought, oh, shit. Like, this is not. That attitude is not going to be helpful. And so I mean this from the bottom of my heart. You guys are in a wonderful environment right now where people want to change the numbers. People want to get rid of their unconscious biases. So take advantage of it now. You have to have a great business, you have to be a great team. I'm not going to claim it's easy. It's not easy for men either sometimes. But I would say don't have that sort of monkey on your back that like the odds are against you because I feel like right now they actually are in your favor.

And then also as you get more and more successful, successful, like don't forget to pay it forward to the next generation. Right? Like find a woman who is slightly behind you or needs help with something and go help her. And it will pay off. Trust me. It will help in the long run and it will help lift everybody in the ecosystem.

Are we out of time?

Yes. So we are out of time. We're going to break up now. But just really quickly. Remember, these two are really, really important. So some of us are going to go into office hours with the ladies, but for everybody else, this is the exercise we would like to try. Break up into a group of five to six people. Whoever is sitting around, you introduce yourself, go around in a circle, everyone introduce yourself. Tell them your name, your company, a personal thing, maybe how your best friend would describe you, what are the adjectives they would use. And then a problem that you need help with. Not, hey, I'm doing this company and I'm crushing it. I'm amazing. We don't have time for that bullshit.

It's.

I just need to find a VP of sales or whatever, like whatever your actual problem is, and then try to help each other. The goal, you know, vulnerability is the only way to build a real connection. We're trying to build real connections and real community here. So feel free to share, feel free to help. So feel free to hang out here while we do this. And then for the folks who do have one on ones with the ladies, here's a map. We're here. I'm going to. Yeah, so the rooms are right here. We're going to do a little setup and shuffling. But everyone, please go to your locations and please hang out and feel free to stay till 12.