On Fundraising
You'll get further along with VCs who deeply understand your space, than the ones who don't. Avoid the generalists.
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When you're trying to raise capital for your startup, it's easy to get caught up in the excitement of meeting with as many VCs as possible.
However, it's not just about the number of meetings you have, but the quality of those meetings.
Venture firms that deeply understand your industry and the problems you're solving are more likely to invest and offer valuable insights and connections.
Conversely, firms without a formed thesis in the space will require more convincing, especially without domain-expert lead investors.
To increase your chances of success, focus on building relationships with firms who have a strong understanding of your space. Attend industry conferences, participate in startup events, and engage with VCs on social media.
An in-person VC meeting goes a long way.
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Like many founders, I've met hundreds of investors in my career, and heard 'NO' hundreds of times.
However, I did hear 'YES' a few times. These conversations followed a similar pattern:
1 - Initial hook: Compelling materials to book initial meeting
2 - Salesmanship: Establishing credibility on the first call
3 - Thought Leadership: Thoughtful and concise written responses to investor questions
4 - Relationship Development: An in-person meeting to seal the business relationship
Investors, like most people, are much more engaged and open to forming a strong bond with someone they are meeting in person. Don't neglect the power of meeting in-person to close the deal.
VC financing isn’t for everyone. Pick your financing path based on the problem you're looking to solve ("Problem - Financing Fit").
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As a general rule of thumb (of course there are exceptions):
- VC Financing = Large TAM, massively scalable business (can get to $100M ARR in 5-7 years), your company is the right horse to bet on (unique insight, founder-problem fit, proprietary tech etc.)
- Angel Financing = Medium TAM, business could be scalable but timeline for scaling is longer, your company can be one of a few winners in the space.
- Bootstrapping = Small / Medium TAM, slow and steady growth with quick path to revenue is enough to build a strong business over time.