Levi from Everything Marketplaces leads a panel of investors discussing seed and Series A fundraising mistakes. Avoid misleading graphs like cumulative instead of monthly data. Build a narrative that includes your personal story, and keep pitching dream investors even after rejection.
Chapters
Hey, how's it going there, guys? Quick question here. So name's Levi, and one of the things I do within Everything Marketplaces is lead fundraising. And so the question I'd love to ask you guys is, what are the biggest mistakes that you see either seed or Series A founders do, or startups, when it comes to fundraising? That way we're able to take some advice here and be better for it.
OK, I'll start. And then Andrew taught me most of what I know, so you can chime in after. I talked about this as a pet peeve in my Everything Marketplaces video session already, and this is hyper-specific, but I think you'll agree. When people make their graphs cumulative—
Oh, yes.
Instead of monthly, for some reason, there's just little things like that that I think investors see and get kind of nervous about and think like, oh, maybe there's something underlying about the business that the growth is slowing. And in reality, nobody just ever said like, don't make your deck that way, like make it a different way. I would say it like maybe a higher, more helpful level would be like, think of the fundraise as kind of almost a narrative, like telling the story of your company. And a big part of that story is you. And so often, even when companies are coming in for the final pitch at a16z, like you probably went through this, we will say like, take 5 to 10 minutes of the 45 minutes and just talk about yourself and your background and like why you want to spend the next 10, 15, 20 years of your life working on this company? I think sometimes founders feel like they need to skip that or breeze past it, but it ends up being really, really important. Gosh. Other than that, I would say we have— hopefully we try to publish some helpful resources on ways to format your data, how to run a process. I've heard a rumor. I'm curious what you think. Some people are now saying leave your favorite investors or your dream investors to the end of the process so that you can practice. Is that true, or how did you guys do it?
I mean, I actually think, like, I definitely heard that. I don't think—
That might be true.
I don't think it's— you can practice other ways is my kind of response to that. But I do think the personal story is actually a really strong— because I'm in a community where I'm also surrounded by a lot of people that kind of fundraise. And I think I noticed personally, there's a big difference between those who answered the fundamental questions for themselves and were very honest with themselves. They tend to tell a very different personal story than those who the ultimate objective is to fundraise, or I want to build a company because it's just the thing to do. And the— I don't think anyone can help you with this personally but yourself. Like, this— if you cannot be honest with yourself, it will leak somehow when you tell your own story. Um, and I think the, the, the way I frame it is if you, like, have that honesty session with yourself and then conclude that you don't want to do this, this is an amazing win. You just saved 5 years of your career. Like, and, and I think that's the It's a thing that just so many people skip because we have so much content and culture around starting companies and entrepreneurship. There is actually a bunch of people that are just in the wave and never just paused and answered those questions for themselves. And just take a second, do that, and then continue. And you'll find that in every step you're just fundamentally more confident, more comfortable.
Yeah.
these investor meetings aren't a make or break for your business because it's just, you know, maybe this one won't work, next one will work. Maybe it's the next round. It's just not the end because you have that conviction and no one can take that away from you, right? Like, no one can.
I mean, it's a good point. And this is like cliché advice to give, but there's, you know, Airbnb is one example. There's many companies where like at the seed we don't invest, but like we do end up investing and investing in a bunch of rounds later on.
At a much more expensive price.
At a much more expensive price, unfortunately for us. But like, Yeah, it's hard to say, like, don't take anything personally, but investors make mistakes, like, all the time. And I think we genuinely, like, love and appreciate when, you know, we couldn't get there at the seed or the Series A, and the founder is willing to, like, keep us updated or talk to us again or kind of spend more time with us. It's always a pro for us when we feel like we've kind of seen more of the story and have more of an appreciation.
You know, just so you guys have some empathy here, you know, we— I asked— you know, one of the bits of advice that that our mentor, Marc Andreessen, gives us on this is, when you meet a company and you say no and you make the wrong decision, then you just have to be content that you're going to be tortured every time you read about them for the rest of your career.
