In this interview, an experienced founder‑investor (Speaker B) shares the most common fundraising pitfalls he observes among early‑stage marketplace founders. He emphasizes that even well‑intentioned founders often repeat the same errors because of human emotions and misconceptions about the fundraising process. Key mistakes highlighted include becoming emotionally attached to a single financing outcome instead of pursuing multiple options, treating a term sheet as a binding contract, pausing the fundraising engine after receiving a term sheet rather than using momentum to oversubscribe, and failing to clearly articulate a specific core insight backed by proof. The discussion is framed as practical, advisory guidance aimed at helping founders navigate pre‑seed and seed rounds more effectively.
And something else I wanted to ask about is, you know, some of the biggest mistakes that you see founders making when fundraising. So, you know, so I guess, you know, so what are some of the common mistakes that you're seeing?
I thought you were going to ask me all the mistakes I've made and the book is too long. You know, I'd say it's funny as I've been fundraising for my fund and I wake up some mornings and realize I should take the advice that I give founders because I see myself doing the same thing. So I just want people to know that like you're not alone, you know, like Even your best intentions and with the best advice and knowing all of it, like you're not going to do it right. Right? Like maybe perception-wise, you'll see some people that do it right. But like the point being is like, I still make the same mistakes. I'm human, I'm emotional, you know? But I think the thing that I see myself and other people do is you may get emotionally invested in one outcome and in reality you need to have many outcomes lined up.
Right?
Like, and you need to be like just brutal about saying this will, this is high likelihood to happen, but if it falls through, what am I doing? And it's likely to fall through because I see this all the time. Term sheets, like people think term sheet is somewhat binding. It is not. This is a non-binding term sheet, right? And like it can fall apart and you need to have backup options and you need to have backup options until the day like your paperwork is signed. Like across all of it. And I say that like, you know, in the best intentions of people, I don't think this is malicious that people are pulling out. It just is, right? Time kills all deals and they do fall apart. And so just be prepared for that. So that's one thing I see a lot of founders doing is like they get something in hand and then they pull their foot off the gas. And in reality, you should be accelerating probably through that because you, what you want to have happen, like Ideally is you get a lead and you oversubscribe that additional amount that you're trying to raise. Like that is like the way you want, like, you don't have to, but I'm just saying like, that's a nice way to end it, right? Where you can pick and choose who you have on the cap table and you can architect the ownership percentages that make sense to you. That's what I would suggest. Early stage advice on what I see people doing wrong. Is not having like a really clear story. Like just, I see this all the time. It's like, there's opportunity. I'm, I could boil the ocean and it's like, I just want like this, the pith, like the very specific, your key core insight that no one else has and your advantage to doing it that no one else has. And just tell me that. And then show me the proof, right? Like it's really that simple because if you have good pedigree, like not that you need good pedigree, but if you're like a really dedicated person that has shown that like they worked hard in their career and done stuff and like what matters then is like what you're going after and why and how you're gonna differentiate. That's the thing I see at pre-seed. I just see a lot of generalized things of like, I'm gonna disrupt X, Y, or Z thing. And you're like, Cool. Like, I could make a deck that says that. And like, what's the, you know, like what's the unique insight and really the how and like the proof behind it? So that's what I would say to people.
