The Fundraising Journey For Power & Early Learnings

18 Aug 2024 · 3 min

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2:57

In this talk, the speaker recounts Power's fundraising experience, beginning with a pre‑seed round in 2021 that was raised during a period when early‑stage capital was relatively accessible. They highlight key strategic decisions: selecting the first board member based on long‑term orientation rather than valuation, and recognizing distinct dynamics between tier‑1/name‑brand venture firms and smaller, independent or newer operators. The speaker explains that tier‑1 firms tend to move quickly but prefer to be approached only after multiple term sheets are secured, whereas smaller firms require more relationship‑building time and should be engaged early. From these observations, they derive practical fundraising advice: start the process earlier than anticipated, seek advice before asking for money, aim to be oversubscribed by intentionally raising less than needed, and conduct practice pitch calls with low‑stakes contacts to build confidence before approaching preferred investors.

Chapters

So could you maybe share a little bit more about, you know, what the fundraising journey has been like? Yeah, we got kind of lucky in that we raised our pre-seed in 2021 when everyone with a keyboard could kind of, if they were lucky and knew a person or two, could raise a pre-seed. And then since then, we've been lucky to partner with really awesome VCs. I think a few learnings here. One, in whatever round you are taking on your first board member, we didn't optimize for valuation. We optimized for the person who like felt most long-term in orientation. So not only did we get along and were they insightful, but they seemed to think in like 10-year timelines, not 2, 5, 7-year timelines. And that has really proven to be a good decision we made. Another thing we noticed is that there's pretty different dynamics comparing, maybe call them solo VCs or newer operators to tier 1 firms. With the big name brand firms, we ended up not really approaching anybody until we had multiple term sheets. It seems like folks weren't pretty much, they often have the opportunity not to move until somebody else has like, proven your value. And so it's kind of a waste to spend any time talking to them until the very end of the process. And then we were surprised to learn just how fast these firms could move. Very often, if we had an in-person meeting with them on Friday, you know, they'd be able to turn around decisions by Monday. And so it was okay that we left them until the very end of their process. They're, they're used to operating from that standpoint. The smaller sort of like independent VCs or newer firms, they need a bunch more time and they want to build a relationship and they really don't want to feel like they're involved in a process and being sort of competed against each other. So it made a lot more sense to have start with them early in the process and then end with the series, the tier 1 firms or the name brand firms, let's call them. So, so that was one takeaway. That was one takeaway from the fundraising. I think, you know, start earlier than you think you need to. I mean, ask for advice, not for money, these sorts of things. In earlier rounds, it was more, we were intentional about communicating that we were raising less than we intended to so we could be oversubscribed really quickly. In earlier rounds, we also tried to line up a bunch of practice calls with folks who wouldn't have been too upset about getting a no from. So we got lots of reps in before we talked to our, our favorites. Yeah.