In this monologue, Jeff Seibert challenges the common intuition that founders should raise capital immediately after launching a beta or prototype. He argues that this timing is ineffective for both major investor archetypes. Seibert categorizes investors into two camps: vision‑driven investors who prioritize the long‑term dream and world‑changing potential, and momentum‑driven investors who look for immediate traction, rising metrics, and evidence of rapid growth. He explains that early‑stage rounds (seed, Series A) are better suited for vision‑driven investors because the product’s potential is still unrealized, whereas later rounds (Series B, C) require momentum‑driven investors who demand demonstrated revenue or user growth. Seibert advises founders to identify an investor’s type by reviewing their portfolio companies, speaking with founders they have backed, or directly probing the investor during meetings. He stresses tailoring the pitch to the investor’s focus—emphasizing vision when lacking traction, or showcasing metrics when traction exists—and being prepared to move on if the fit isn’t right.
Chapters
The most common intuition I've seen is this. You're going along, building your product, trying to figure out what's going on. You shape the company, you get a team together, you get a prototype working, you launch your beta, and you're like, oh man, okay, that was a lot of work. Finally, we have some time, the beta's out there. Now it's time for me to go raise. Does this sound familiar? Does this sound intuitive? Yes. Cool. So this, I would argue, is exactly the wrong way to go about it. And here's why. So broadly, and I'm going to make some generalizations, of course there's exceptions, but I think this is broadly helpful. I'd say investors fall into one of two camps. I believe there tends to be investors who are more vision-driven, who care much more about the dream, about the end goal, about how this is going to change the world. And there are investors who are more momentum-driven. Like, I want to see your graphs up and to the right. I want to see your revenue plan. I want to see your servers melting and catching on fire. I want to see everyone loving you right now, and that's how I know that this is on the right path. and I should invest. And for both of these, raising money right after you launch just doesn't work. So let's talk about momentum first. All right, they want to see numbers and graphs up and to the right. Well, you just launched. You don't have any data. You don't have any traction. How would they be impressed with your first month's numbers? They don't see any slope. On the dream side, I can guarantee you that your MVP half-baked beta prototype that you just launched is not exactly meeting the grand dream that you just tried to pitch them on. And so now you've gone and sort of burst their bubble. They were envisioning this perfect magnificent thing and you burst their bubble with your prototype. So that's probably not great. Really you want to say, oh no, it will be better, we haven't launched yet, don't worry, it's still going to approach that vision. And so this does not work. Now it depends, okay, what type of pitch you want to do on what round you're raising. Obviously earlier rounds, seed rounds, A rounds, you can target more vision-driven driven investors because your potential is unrealized. By the time you get to a B or a C round, you probably need some revenue traction. You probably need someone who's going to invest based on the momentum because it's hard to say, oh, 4 or 3 rounds in, the dream still hasn't materialized. And again, focus on what type of investor you're pitching. People always ask me, how do I know what type of investor they are? You can talk to or look at the companies they've invested in and have these companies, like, do they have traction now or are they pitching a big thing down the road. Talk with the entrepreneurs at those companies, what type of pitch did they use. Or just go for it and meet with the investor and pick the style of pitch that's best for your business, and it will either be attractive to them or it won't. And if it doesn't, that's fine, just move on. And yes, and of course, what type of pitch does your business currently lend itself to? If you don't have traction up into the right, I really hope you can make a very strong vision argument.
