This content was created by Max Brun. This content was uploaded by Max Brun. This is a YouTube video titled "The Current State Of Fundraising & Tips For Founders" (created 2023-07-05) containing a short excerpt of a spoken discussion between two participants labeled SPEAKER A and SPEAKER B. The discussion focuses on the current fundraising environment for pre-seed and seed-stage marketplace founders, noting market uncertainty (high inflation with low unemployment, high customer acquisition costs, mortgage market disruption, generative AI) and offering practical advice: prioritize finding long-term investor partners who understand your space and unit economics, and raise only the amount needed to reach your next milestone rather than following headline-driven fundraising trends.
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And one thing I did want to cover really quick right before we do, so this could probably be a whole conversation itself, but is the kind of, I would say, the current state of fundraising right now. So for like pre-seed and seed kind of founders, and could you just kind of maybe give us like an, I would say, like a few kind of observations on, you know, what you're seeing in the market, and then maybe, you know, even some tips for earlier stage marketplace founders that are fundraising at those stages right now?
Yeah, I think any point in time, where you have change, there's opportunity and there's also huge challenges. So if you look at everything that's changing around us, this is, um, the one of the few, if not the only time we've had high inflation as well as low unemployment. We've also had customer acquisition costs at an all-time high, crazy things going on with the mortgage market. You have generative AI. I could go on and on about you know, all of the changes that are happening in the world that make this an interesting time to be investing, but also a precarious time to be investing. And so there has been some weirdness, I'd say, in the market. There are companies that have traction that aren't able to fundraise, and then there's companies that are pre-product that are raising hundreds of millions of dollars. And I think for a lot of founders, Looking at this market is really confusing and kind of unsettling. I think at the end of the day, the things that have always been true in venture is you're looking for a partner for a really long journey. And so how do you find someone who understands and believes in your space? It's not just about saying, hey, look, like, look at the numbers, this is a good business. It's about saying, Hey, you understand this space. You understand that the underlying unit economics, the underlying thesis, the underlying team of this business is one that's going to win in the future. And I want you as an investor along for the ride. So I think the number one piece of advice I'd give is look for an investor, not just a firm that really matches your company. The other thing I'll say is we've learned over the past couple of years that the fundraising amount, the amount of money you raised determines a lot more than just how high profile your company is. We were talking the other day at Lightspeed about how the, the unicorn title has really rewarded people for raising a lot of money. and getting high valuations when the truth is that doesn't necessarily mean you have the best business in the world. Um, the same thing can be true about the team size. Just because you have 100 members on your team doesn't mean you're actually the best business. Um, and so I think it's really important for founders to consider how much do you actually need to raise to get to the next milestone in your business? Um, because you're always The more traction your business has, the more leverage you have to fundraise. And so I would be careful to founders to advise them to think about how much money they wanna raise based on how much other founders are raising or what they're seeing in the news, and really focus on what's right for your business. So those are the 2 things that I think are most relevant pieces of advice right now.
