Fundraising in a new environment, then and now

This week, I gave a presentation to a group of early-stage founders going through First Round’s Dorm Room Fund Female Founder Track. The goal of the session was to provide tactical guidance around what to expect when fundraising, particular as first time founders.

This post is about raising your early round of funding based on my experience as an investor at On Deck, Bloomberg Beta, Ridge Ventures. There are many helpful fundraising guides already out there, so this post is focused on insights and observations based on recent market shifts.


Fundraising is one of the few one-way doors in a company’s life, so it’s important to prepare well, be ready to eliminate the easy “no” reasons, and commit to making this a core focus for 1-3 months (sometimes longer) when you are ready. I’ve laid out the three critical phases of fundraising, the key questions to address in each, and some pointers on how fundraising in a bear market is different from the bull market of the last few years.

I. Prepare, prepare, prepare

• Why are you The One? An investor needs to believe that your company can return the fund. Many founders need to practice their pitch a hundred+ times. Find a small group of friends, existing investors, advisors to practice and get feedback. You should practically get bored of your pitch but be ready to talk about the company each time as if it’s the first time telling it.

• What are you raising on — progress, story, team — and what are investors anticipating will happen with this raise? Put differently, what risks have already been de-risked and what risks will you de-risk in the near-term? The very best founders can fundraise in 2 weeks, but this is outlier and often attributable to a track record of success, credibility, network.

• How much do you need to raise and at what price? Cash efficiency is critical today. Your fundraise should afford you at minimum 24 months of runway. You can have a target price in mind, but the market will set the price.

• Who are the natural investors for you? Invest real time to curate your investor CRM — tier your leads, intro paths, backchannels. Qualify EVERYONE. Knowing who you’re targeting, preparing the custom forward intro emails with why you believe they’re a good fit, and ensuring you have as many warm intros are surprisingly important parts of the process. Target 40-50 names on your list and in today’s markets, you may need to talk to 80-100 investors.

What’s changed from then vs now?
• Commitments aren’t dollars in the bank. They won’t create as much fomo and may even have the opposite effect with VCs who are investing with more caution right now.
•  Prices are lower (and likely will be for the next 6-12 months) and ownership expectations are stricter/higher. Be wary of stacking SAFEs at multiple caps for this reason. Treat your round like a priced round and close everyone on the same deal. Anticipate 20% dilution at the seed (up to ~30% for hard tech).

II. Run a tight process

• Who will be your strongest intro paths? Ideally you work with an angel or founder advisor who can champion you. Of course, successful portfolio founders are the strongest intro paths to an investor.

• What are the easy pass reasons? Pre-empt these. You can learn about common hesitations by practicing your pitches with smaller check investors and your “nice to have” investors to get feedback.

• Why is this investor a good fit? While tools like NFX Signal, Crunchbase/Pitchbook, Twitter can help, curating a high quality lead list will take time. Prioritize conversations accordingly, and maintain ball control of your information by keeping investors in each part of the process in similar time frames.

What’s changed from then vs now?
• While tier 1 funds may be moving slower, there are angels and micro-funds that are still investing smaller checks. Have clear next steps at the end of each conversation and follow up appropriately, but responsiveness is your best leading indicator with investors. If it’s not a hell yes, it’s probably a no.
• The bar is higher for diligence. Anticipate deeper founder references for pre-product and more questions around customers and pipeline if you’re post-product.

III. Win and close

• How do I command a higher price? Congratulations on an offer! Momentum is your best leverage. Multiple term sheets from comparable investors are your best bet to increase the price. That said, if your offer is with an investor you trust and respect at reasonable terms, don’t over-optimize. Take the money.

• What allocations make sense for the round relative to what each investor wants? Go back to your smaller check commitments and confirm their desired check size so you can revert with as best as you can accommodate.

• Which angels or small checks do you definitely want on the cap table and why? Founder or operator angels are often the most helpful small checks for their tactical, hands-on support.

What’s changed from then vs now?
• Don’t assume a verbal yes is a done deal until the investment is signed and wired. Ordinarily, an investor would almost never risk the reputation damage of changing terms last minute or reneging on a handshake, but these are uncertain times. Again, if you receive an offer with an investor you trust and respect at reasonable terms, take the money.

The truth is that fundraising for almost everyone is a slog, so prepare well, gather your support network, and don’t cut corners.


Thanks to the Dorm Room Fund team and founders for having me. If you’re an early-stage founder working on frontier tech to transform traditional industries, reach out.

Boarding the Podcast Wagon: 5 Standouts

Media users today face no dearth of avenues for consumption, yet podcasts have recently gained newfound momentum in edging out their visual and analog counterparts in popularity*. What used to be considered an arcane relic of weary radio, podcasts saw their resurgence with the likes of This American Life’s ‘Serial‘, Gimlet Media’s ‘StartUp,’ and WNYC’s ‘Freakonomics.’ Although I got hooked on Serial last fall, my podcast usage waned after the finale because I didn’t have an app that felt functional and provided a great user experience. Recently, a friend’s recommendation for a new podcast app revitalized my interest with the app’s set of content and features. With it, I’ve been listening to several subscriptions during my commutes and down-time, and below are some standouts (with my favourite episodes thus far highlighted):

For the Aspiring Entrepreneur – Re/Code Decode with Kara Swisher

Technology commentator extraordinaire Kara Swisher felt it wasn’t enough to report on the happenings of Silicon Valley at her and co-founder Walt Mossberg’s news site Re/Code, so she recently launched this interview focused podcast. In these episodes, she invites some of the today’s most aspirational technology pundits to share their insights on everything from the state of Internet of Things to diversity in the tech industry.
|| Highlight: Investor Chris Sacca, Smartphone Prices and “Buy” Buttons ||

For the Tech Aficionado – Exponent

I’d like to invite Ben Thompson and James Allworth to dinner (seriously) because it would be a delight to see their insightful conversations unfold in real life and even be a part of it. Their technology and society focused podcast feels more like an intimate conversation between two awesomely geeky forward thinkers of which we listeners get to be flies on the wall.
|| Highlight: Grow Grow Grow Fight Fight Fight ||

For the Music Lover – Song Exploder

Introduced via Roman Mars’s 99% Invisible (another lovely design-centric podcast), Song Exploder invites talented musicians across a spectrum of genres to share the creative process behind one of their songs. Many of the pieces are recognizable, and listening to composers deconstruct their works and tell their stories makes enjoying the final construction at the end even more satisfying.
|| Highlight: Alexandre Desplat – The Imitation Game ||

For the Design Nerd – Dollars to Donuts

Design thinking/User Experience Design/etc. is all the rage as of late, but these are different names for the same creative process that has existed for decades in any product design field. Successful user experience design relies on a deep understanding of your users, their needs, and their challenges. This is where user research comes in. In Dollars to Donuts, you’ll hear from lead user researchers at organizations like Etsy and Citrix describe how they use both quantitative and qualitative data to craft the ideal customer experience.
|| Highlight: Gregg Bernstein of MailChimp ||

For the Storyteller – Strangers

Lea Thau’s first episode begins with an account of a man who was interested in dating her, then not dating her, and ultimately wanting her toddler’s poop. Yes, poop. Now, if that doesn’t pique your interest, the rest of her episodes chronicling the ups and downs of life, the beauty and pitfalls of love, and her ardent appreciation for humanity will entice and beguile your ears.
|| Highlight: David Terry: Jesus ||

With the ubiquity of smart phones, it’s easy to see why podcasts regained their eminence; they’re portable, easy to digest, and often a form of newstertainment. Additionally, their incredibly intimate deliveries provide an audial experience that both teaches and entertains. I’d love to know: what are some other great podcasts you’ve enjoyed?

*NoteCheck out this excellent article by @NatalieWires on the rise of podcasts here.

Good Reads (So Far) of 2015

The vast majority of my time spent outside of work is dedicated to reading. Long-form blogs, interviews, conference transcripts, and of course, books. They dominate, and it’s a shame I don’t love e-books as much as hard-copy because my wallet and bookshelf space would definitely benefit from going digital.

Alas, I remain stubbornly loyal to reading my books in hard copy. The start of each month marks another series of good reads, some recommended to me; others revolving around my latest obsession or selected from some bestseller or book award short list.

Of the 25+ books I’ve read so far this year, below are my top 5. They range in genre and topic, but each sparked great conversations and enlightenment for something novel.

  1. Americanah, Chimamanda Ngozi Adichie
    Recommended to me by a friend possessing a deep understanding and perspective on intersectionality, racism, and the human experience of being “other”, Americanah is brave and startlingly honest. Adichie uses the protagonist’s experiences as the vehicles by which she weaves some of the most intricate emotions, observations, and indictments of what it means to be a modern citizen in our highly globalized yet still segregated world. I found I could not put it down, and that I identified strongly with some of the protagonist’s experiences with immigration and being a minority. I can’t believe it took me nearly 2 years to discover this book, and for anyone unfamiliar with Adichie, she’s the feminist powerhouse featured in Queen Bey’s song “Flawless“.
  2. Better: A Surgeon’s Notes on Performance, Atul Gawande
    A new favourite author of mine, Gawande is an American surgeon who gained popularity with his first book Complications back in 2002. Better is the second of his three major publications, and in it, Gawande again infuses his deep medical knowledge with his knack for storytelling to ponder how physicians, and all us humans, can strive to be better. He attributes exceptional performance down to three components: diligence, doing right, and ingenuity, and manages to distill some of medicine’s most chaotic moments into meaningful narratives while preserving their complexity. In the same way a surgeon has a moral obligation to continuously strive for better provision of health care, I finished this book with a profound sense that all of us can and should indeed strive for betterment.
  3. How to Create the Mind, Ray Kurzweil
    I came across Ray Kurzweil while reading a Bloomberg profile on Bill Maris, the precocious head of Google Ventures, back in the spring. In the article, Maris speaks with calculated fervidness on the prospect of living to the age of 500. To do so, Maris and futurists like Kurzweil portend the “Technological Singularity”, a term coined to describe the moment when computers outpace human abilities, resulting in the capacity for humans to transcend biology using such new technologies. Kurzweil’s seminal work, The Singularity is Near (2005), can do better justice in outlining such predictions, but after slogging through the Singularity, I picked up How to Create the Mind in hopes that a better background in both human and artificial brain functions and limitations would help frame my understanding of all his futuristic ideas. And it did…sort of. Create the Mind is definitely more digestible, and gives you a peek into how our brains can inspire the future’s digital brains.
  4. Remember Me Like This, Bret Anthony Johnston
    I’m weirdly obsessed with reading book reviews. I’m particularly fond of the ones in The New York Times, and I stumbled upon Johnston’s debut novel from reading Eleanor Henderson’s review on it. Reading the synopsis, it would be easy to dismiss Remember Me as another tale on child kidnapping or victimhood. However, the further I got along the book, the clearer it became that this is a story entirely focused on family and the unimaginable lengths we’ll go to protect and accept those we love.
  5. Zero to One, Peter Thiel
    I’d imagine that even if you are not plugged into the start-up or tech world, you know of or have heard of entrepreneur extraordinaire Peter Thiel. At the very least, you’ve heard of his company PayPal (and maybe even of Palantir). Zero to One is 2015’s Lean Startup – a must-read on any budding founders’ and creators’ short list. Truly revolutionary companies and products seeking to shape the future should aim for zero to one growth, and although I was a bit turned off by his disparaging tones on even the semblance of convention, Thiel’s broad concepts on building transformative businesses provided some interesting color on the reasons for their success.

Currently enjoying Oliver Sacks’s Anthropologist on Mars, but I’d love to know: what have been your favourite books of 2015 so far?