This is a YouTube interview/presentation where Josh Reeves (Gusto founder) gives practical fundraising advice. Key points in this chunk: treat fundraising like hiring/team-building (separate teams: employees, investors, board); cultivate investor relationships when not actively raising (e.g., one day a month); run concentrated fundraising rounds with clear timetables; and for seed rounds, prefer "strategic angels" (operators/executives who understand the pain and can introduce other founders).
Chapters
Josh is kind of like a fundraising legend. I think at the time coming out of yc, you sort of raised the largest round out of YC is what I had read. So why don't you tell us a little more about like that process, I guess a couple principles I have for fundraising. Number one, view it like hiring. You're building a team. You have a team of employees, you have a team of investors, you have a team of board members, and it's three distinct teams. Get to know investors when you're not fundraising, right? And it doesn't take a ton of time. You can concentrate it like one day a month, ping someone, say you want to share what your business is up to, but say you're not fundraising right now. Like it actually takes the pressure off the conversation being the vcs to figure out am I going to make an investment or not. And actually they can just learn about your business. Right. The way that worked with YC was we did it in a very concentrated way right after demo day. But for the subsequent rounds of financing, I would do those kind of once a month, once every couple months, day of meeting investors. And then when we did fundraising, it would be a two week, three week process with a very defined timetable, with a defined date where we're going to be deciding allocations. That's one big piece of advice I have on fundraising is to the extent you can try to think about it as hiring and team building versus just money and price. I guess the other advice, just more tactical thinking back to early days, we did our seed round primarily with angels, what I would call strategic angels. Operators, executives and companies who had felt this pain point and who, frankly I would have paid money to to kind of give us advice. Instead, they gave us money and they've all made pre returns. So there's no favors here. Like it all worked out, but it was just cool to talk to these folks and get their perspective, get their wisdom. And the fact that they had some skin in the game actually just aligned incentives, even better. And when I was meeting one of these folks and we have, you know, 20 or 30 of these CEOs and founders that are on our cap table, I would finish a meeting if it worked out well, they said yes, they want to join the round. I would immediately ask who are two other founders? You know, who you think would care about this problem? Space could be helpful, useful and you can make an intro to. That's one of the best intros you can get in the financing process. Is someone pinging someone they know saying, I'm investing, you might be interested. It's the best kind of intro you can get.
