A founder who raised over $400M shares practical fundraising strategies: delay your official raise, ask investors for advice to spark interest, court them early to get term sheets, and avoid long competitive processes that kill momentum.
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So, you know, you've raised a little bit over, I believe, what, $400 million from some pretty incredible investors. So like Khosla and then, you know, Mike from Canvas Ventures also who introduced us, you know. So do you have any maybe tips for founders as far as like on fundraising that you might be able to share?
Yeah, I mean, that's a, it's a, we could have a, you know, a 2-hour conversation about fundraising. I'll tell you, one of the things that I've learned is For as much as founders or as VCs like to be thought leaders and, you know, all that, there's a lot of, you know, there's a lot of following that goes on and there's a lot of herd mentality. And so what I have found is the best way to fundraise is not officially be fundraising. It's to go see investors, Talk to them about why you're seeing them and say, listen, I plan to go out to the market in a couple months, but I've heard great things about you, XYZ investor, for the following reasons. And I'd like to talk to you about my business, get what questions you may have. And then when I'm doing my process, I'd like to come back and see you. That seems to work really well. I can't remember who told me this, but I think there's a great phrase, you know, if you're You know, if you're looking for advice, ask for money. If you're looking for money, ask for advice. So if you go in there and you're asking their advice because they're really smart and really well connected, sometimes they'll give you money. And so several times we've done, you know, Series A up through Series E, we have raised 2 to 3 months before we did a process, we'd get a term sheet and we'd either just take it or we'd really quickly go out to some of the people we're close to and say, hey, we've got a term sheet, are you interested? Because the opposite is if you say, hey, I'm starting a process on, you know, June 1st and I want to be buttoned up by July 15th, and you're sitting there at July 7th and you don't have a term sheet, and people know you've been in the market for 5 weeks, they're saying, okay, well, what's wrong? And so then what you'll find is they're going to say, well, who all have you talked to? You know, and oh, you talked to Rolf from Squith. He obviously hasn't given a term sheet. He's a pretty smart guy. Who else have you talked to? And then, so it's these deals that feel like they've been in the market For a while, it's really hard. So there's an art to that and it really does work. And so if you can delay an official start to a fundraise and make people feel special that they're early in the process, yet no one, I can tell you right now, if they like the business, they don't want to be part of a process. The process, they, you know, they don't want to be in with 10 or 20 other VCs. They want to do something preemptively. And if they think they can do that, and they're getting ahead of them and it's not been shopped, that's the best way I have found to get a term sheet. And then once you get a term sheet, everyone wants to give you a term sheet.
