In this interview, a YC alumnus recounts his first experiences with fundraising, starting with angel investments from YC partners such as Paul Graham, Paul Buchheit, and Solomon Hykes. He describes early misconceptions about runway and burn, noting the pitfalls of both over‑investing and under‑investing. After the pandemic, the founder identified a product‑market fit by building e‑commerce‑first underwriting and a "rolling terms" model, which, combined with an outbound‑plus‑events go‑to‑market strategy, drove rapid customer acquisition in late 2021. The broader fintech boom provided a favorable macro environment, enabling a smooth Series A with their seed investor and later a $100 million warehouse facility. Throughout, he emphasizes the art of managing burn, leveraging macro trends, and aligning product differentiation with investor appetite to scale a fast‑growing company.
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Back when I was in YC, I really didn't understand the concept of fundraising. So getting into YC and getting money from Y Combinator was my first experience with fundraising at all. So prior to that, I don't think I even had met someone who had fundraised capital from VCs. So it was very, I knew it was something that happened, but it was very foreign to me. So I didn't understand how it happened or what criteria you needed to meet to even raise. So I didn't understand that like the there were people out there that were willing to give you money just for an idea. So when we were in YC, we actually just, I think a lot of the partners there liked Milan and I. So we ended up rising just from insiders within YC. So it was just all, basically all angel money. Some money from Paul Graham ended up investing, Paul Buchheit, Solomon Hykes, who was the founder of Docker, who was actually a partner at the time in YC. 22 Ventures, which was also like a kind of YC-related fund. And yeah, and then from there, really no one else was willing to fund us. I think, you know, we just had this different background and maybe I wasn't so, you know, not the best at pitching at the time. And it took, it took me a while to figure it out. And, but yeah, we had enough money to, you know, it lasted us Quite some time. We were very scrappy. We were just, we weren't really burning a ton, which in hindsight was a mistake. 'Cause I think, I think the question of runway is really important early on because some people overdo it where they burn way too much. And that's kind of the cautionary tales you hear about. But actually, I think the opposite of that is also true where some people have such low conviction On what they're working on that they underinvest. And they just basically like live off of nothing, off the co-founders. And they have 8 years of runway on paper, but they just never reach escape velocity. So they kind of like, it's very easy to be in that position when you do YC because you'll raise a lot of money for 3 people. And so you convince yourself like, wow, I have all this runway. But now that I'm 6 years out of YC, I've definitely met a number of people who, you know, are still living off that, that like pre-seed round, but haven't built that much out of it.
Yeah, haven't used it efficiently to actually build a business, which is what you should do with that capital ideally, to get to what you want to get to.
Yeah, exactly right. Like you need to, you, if you're building, if you're aiming to build a fast-growing company, you kind of, you need to, you know, you need to invest in stuff, you need to, invest in building your product. You know, you need to take some amount of risk where you don't have perfect information or perfect data that your idea is gonna work, but you kind of, yeah, it's kind of an art on how to manage your burn, right? 'Cause you wanna invest in the future and build something, but you don't wanna overdo it either where you run out of money and you can't survive.
So from kind of that point of, you said maybe like underutilizing that a little bit on the funding side, you obviously then raised a lot later on, but let's take it from The kind of post-COVID, you come back to the idea that you think was gonna be a better idea. You're gonna stick with it. You get some initial customers, it sounds like. Like what fueled the growth from there? 'Cause if you take a, if you look at Parker today, you would look at the headlines, you have like $100+ million raised. You look at like all the things you're doing, people kind of raving about it. But there's like a couple years in between that, obviously from the post-COVID to now in 2024. What fueled that growth and what kind of happened from that?
Things started taking off, I would say at the end of the summer of, Let's see, 2021. So what happened was from enough customer conversations, we actually like figured out enough points of differentiation to grow quickly in e-commerce. So we had like interesting, you know, we built the rolling terms, we built the e-com first underwriting. So that, and then we kind of figure out a go-to-market motion with that was basically like outbound plus events combined, and that got word of mouth going. So then we started growing our customer base very quickly. And this was still during the fintech boom, right? So, I think like the context here is really important because if we had the same thing happen today, I don't know that we would be able to fundraise. So, there was, there was like this, you know, the backdrop was that fintech multiples were really high. There was, you know, there was a lot of VC appetite to fund fintechs. So, we were growing really quickly. And then doing our Series A with our seed investor was very straightforward, right? Because we had that growth and had a lot of success funding fintechs. They just recognized the pattern there and they were, they were willing to fund us. So, raising that money plus proving out the model with lenders allowed us to raise the warehouse facility, right? So, the sort of $100 million to fund this even more. That was kind of, that was kind of the backdrop. So it was like a combination of something that was out of our control, right? It was just fintech was booming.
Yeah.
VCs wanted to fund fintechs. So, and then also like we were growing very quickly and our numbers looked good.
