PRE-SEED FUNDRAISING GUIDE: PART 5

Do your homework before you pursue these options

Image for post
Image for post
Photo by Markus Spiske on Unsplash

Finding investors for your first raise is tough. Especially if you’re a first-time founder and especially since this is your first raise. Some sources of capital seem almost too good to be true. In reality, though, you should avoid them or at least approach them with healthy skepticism.

In particular: Grants, Angel Groups, Accelerators, and Equity Crowdfunding. In general, these sources of capital require investing a lot of time for not a lot of money. Time and effort that could instead be spent raising from individual Angels, Micro VCs, and more ‘traditional’ investors.

But, there are certain cases where these sources of capital do make sense. Here’s how to think about and assess these sources of capital. …


Image for post
Image for post

Minimizing your accomplishments is a morale killer

When I first started my startup, I often used the word just when talking about what we’d accomplished.

We just had five customers.

We just raised a pre-seed round.

It‘s just me and the CTO.

When I meet other founders, I often hear them using the “j word” too.

This is problematic because we’re constantly sub-consciously diminishing our accomplishments by using the word just. Over time, we start to believe that we haven’t accomplished much and get discouraged. Especially when you’re early on, and morale is so important, getting discouraged can kill your startup much faster than running out of money. New businesses do not start from thin air. …


Image for post
Image for post
Photo by Todd Quackenbush on Unsplash

Along with discounts to save yourself some time and money

Updated October 2020

Finding the right products to use and looking for discount programs can be time-consuming. Here’s our tech stack along with discounts to save yourself some time. These aren’t affiliate links, just products we like.

Products w/Discounts

Image for post
Image for post

Stripe Corporate Card

If you use Stripe’s Corporate Card, there are a lot of discounts that come with it like:

  • Airtable (database): $2,000 in credit for up to 5 users for 20 months
  • Carta (cap table): Access to Launch and 20% off + waived implementation fees
  • Gusto (payroll and benefits): 3 months free
  • A lot more: Slack, Notion, Expensify, etc.

Some of their discounts aren’t as good as going through the companies directly—so double check before you use one. …


6 questions to ask before applying to an incubator

Image for post
Image for post
Source: HBO

You have an idea and want to make it a reality.

Incubators and other programs like them are often among the first organizations you’ll encounter on your startup journey. As a result, they often seem like a logical place to start. After all, you probably know next to nothing about startups and have many questions:

How do I form a company?

How do I meet a co-founder?

How do I build and sell a product?

How do I raise funding?

If the incubator is well run, incubators can be a great thing for founders. However, they rarely are. We went through several incubator programs and made progress but never really seemed to grow due to their advice. …


By optimizing for short term price, you often miss out on long term value.

Image for post
Image for post
Photo by Christian Erfurt on Unsplash

One of the things I emphasize with founders the most about but understand the least is over-indexing on price. When it comes to making decisions, I often hear things like:

“It was the cheapest”

“We found a way to get x for free”

“I only had to give up x equity”

“We got x contractor for only x dollars per hour”

I empathize with these statements because when you’re starting a startup you’re strapped for cash. You need to figure out how to make the most happen with the least amount of money. …


PRE-SEED FUNDRAISING GUIDE: INTRO

7 months and over $500k raised later

Image for post
Image for post

Fundraising is one of the most difficult things you’ll do as a founder, especially if you’re a first-time founder and especially for your first raise.

Every company is different, but here are some of my biggest takeaways from raising a pre-seed round that included Micro VCs, Angels, and Family Offices. The vast majority was from people I knew only at arm's length before starting the raise. Friends and family accounted for less than 5% of the raise.

1. Build something worth investing in

It seems obvious, but it’s so often ignored. This is step one. You need to build something worth investing in and believe that it is worth investing in. The more traction you have, the easier your life will be. If you try to fundraise too early, you risk wasting valuable time that you could have spent building your product or making money. …


PRE-SEED FUNDRAISING GUIDE: RESOURCES

YC Videos, Tools, Paul Graham’s essays and more

For any challenging endeavor, you need to have the right tools, resources, and be able to speak the lingo. Here are some of the tools and resources I found to be most helpful.

Resources for Fundraising Tactics

  • Paul Graham’s essays on fundraising. There are a lot of good ones, but How to Convince Investors is especially good.
  • The Pitch podcast to listen to other founders pitch.
  • Look at decks of companies currently raising on Republic or Seed Invest (scroll to the data room at the bottom of the deal). …


PRE-SEED FUNDRAISING GUIDE: PART 4

Tips to fill and oversubscribe your first round

Image for post
Image for post

Once you get over the feedback hump with your deck and you’ve closed your first check, it’s time to step on the gas and find more investors. You should pursue as many investors simultaneously as possible. This creates interest in the round and pushes investors over Wait-and-See Hill.

It is the interest of other investors that forces investors to act because there is limited room in the raise. Do not take the single-shot approach where you court one or two ‘great’ investors. Closing a round is about a truckload of lead bullets. …


PRE-SEED FUNDRAISING GUIDE: PART 3

Kill two birds with one stone for your pre-seed raise

Image for post
Image for post

You’ve decided that it’s time to raise and know how much you want to raise — great! The next big challenge is finding investors and making a great pitch deck to tell your company’s story.

Often, entrepreneurs view finding investors and making a deck as separate challenges. But, it’s actually best to tackle them at the same time. Here’s how.

Making your deck

First off, do decks even matter? Here are a few reasons why I think investing time in a solid deck is worth it.

  • A deck is how you get calls and prevent unnecessary calls. Setting up (and having) calls is time-consuming for everyone involved. About 15 minutes to set it up and then 30 minutes for the call. A good way to make the call worth their time and your time is to have a simple, but compelling deck. Many investors may not even set up a call if you don’t have a deck because they don’t want to waste their time. …


Image for post
Image for post
Photo by Hardik Pandya on Unsplash

This time it’s (not) different

If you’re doom scrolling through VC Twitter these days, it’s easy to come to the conclusion that Silicon Valley is dead and gone.

Especially, if you’re a founder reading these tweets and articles, it’s easy to conclude that it’s no longer a good idea to start a startup in Silicon Valley. “Silicon Valley, America’s signature hub of innovation, may never be the same.” The Wall Street Journal concludes.

Image for post
Image for post

But, reading these articles made me think, haven’t we been here before? And sure enough, we have!

We’ve been here before

2009, Wall Street Journal

Did I wake up this morning in 2002? A story in today’s WSJ chronicles the rapid demise of high-tech start-ups in Silicon…

About

On Starting Up

Notes from a founder trying to make an idea a reality.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store