How We Raised a $7 Million Series A from Foundry Group — our Top Choice VC

Ultimately, fundraising success requires:

fundraising execution + a compelling story/vision + evidence of traction + sheer determination + good fortune (luck)

This article focuses on the first of these five variables: fundraising execution. Below I lay out a 7 step framework to guide you through your fundraising process, and share some lessons learned having now successfully raised money for three separate ventures (and made plenty of mistakes … [ Read more ]

Seed Fundraising — How to Get a Meeting

The first part of fundraising is getting the meeting and 90% of startups fail at this point. Here’s how to make sure you get meetings with the right investors.

16 Definitions on the Economics of VC

Scott Kupor of Andreessen Horowitz attempts to clear some of the opacity of how the VC industry works, by defining some basic terms, beginning with a bit of history.

Common Startup Timing Mistakes and How to Avoid Them

There’s a lot of advice on the web about what to do once you’ve raised money, but not when to do it. This is unfortunate, because poor timing can kill a company. This post will describe some common timing issues, as well as a framework for avoiding them.

The Law of Large Numbers

Rafe Furst of Quantitative VC uses data analysis and poker references to try to understand if VCs are good at investing in startups or if it is all just luck.

When Is a “Mark” Not a Mark? When It’s a Venture Capital Mark.

The WSJ wrote a story on venture capital returns that claims “Andreessen Horowitz’s Returns Trail Venture-Capital Elite.” Andreessen Horowitz’s Scott Kupor offers a rebuttal by explaining how arcane and obtuse venture capital valuations can be.

31 Investor Questions Startups Should Be Prepared to Answer

I’ve heard thousands of investors ask tens of thousands of questions. I’ve also learned that startups’ answers to these questions can be far more insightful than a rehearsed pitch. This is a list of the most frequently asked investor questions.

Investors and Their Incentives

It is incredibly important to understand the incentives of investors when you are raising money. This used to be fairly easy – you raised money from Venture Capitalists who wanted to see a big return on their investment. The best of these investors were incredibly focused on doing the one thing they did well: investing in technology companies.

The world looks different now. There are a … [ Read more ]

7 Benefits Your VC Should Provide

Every entrepreneur can expect their venture investors to bring seven main benefits to the table. If you already have venture investors, you can use this article as-is. If you are currently considering fundraising, reverse it and ask prospective investors if they are able to support you in these key areas. If not, ask yourself if you’re talking to the right people.

How Venture Capital Works

The U.S. venture-capital industry is envied throughout the world as an engine of economic growth. Although the collective imagination romanticizes the industry, separating the popular myths from the current realities is crucial to understanding how this important piece of the U.S. economy operates. For entrepreneurs (and would-be entrepreneurs), such an analysis may prove especially beneficial.

You Can’t Judge Market Size by This Slide

As investors, we’re considering the total addressable market for a given product or service immediately upon hearing a vision for it: How many users and/or customers are there for this?

Slapping billions or tens of billions of dollars with a title and maybe an asterisk-attributed source on a slide will either be glossed over or, in some cases, actually be detrimental. Every VC has seen … [ Read more ]

A Guide to Seed Fundraising

The initial capital raised by a company is typically called “seed” capital. This brief guide is a summary of what startup founders need to know about raising the seed funds critical to getting their company off the ground.

What Most People Don’t Understand About How Startup Companies are Valued

Valuing any company can be difficult because it requires a degree of forecasting future growth & competition and ultimately the profits of the organization.

Editor’s Note: in a way this is a topical article centered on the dropping valuations of startup companies in early 2016, but much of the discussion is of long-term relevance for anyone interested in entrepreneurship and venture capital.

What I’ve Learned About Venture Funding

VC funding. Our perspectives on the topic wax and wane with market cycles. We love capital efficiency until we love land grabs until we abhor “over funding” until we get huge distribution & ring the bell for more funding until we attract every non-VC on the planet to invest in startups until it crashes and we start the cycle all over again none the wiser. … [ Read more ]

Lessons From A Study of Perfect Pitch Decks: VCs Spend An Average of 3 Minutes, 44 Seconds On Them

DocSend, a startup that provides people with a secure and private way of sharing files like offer letters or legal agreements, studied more than 200 pitchdecks to figure out the right way to graduate from bootstrapped to seed-funded, or from angels to a Series A.

They partnered with Harvard Business School professor Tom Eisenmann to look at companies that had raised $360 million in total.

What did … [ Read more ]

VC Firm Discloses ‘Internal Operating Manual’

Venture capital is in the midst of a structural sea change, evolving from a secretive old boys club into a much more accessible and transparent… well, new boys club. One thing that has generally remained guarded, however, is investment strategy. Not the broad strokes of sector and stage focus, but the nitty-gritty about how a firm makes its decisions on who to fund and … [ Read more ]

How to Convince Investors

Paul Graham offers some very useful advice to entrepreneurs about trying to raise money. As he points out, most inexperienced founders try to convince with their pitch when they would be better off if they let their startup do the work—if they started by understanding why their startup is worth investing in, then simply explained this well to investors.

What VCs Really Care About

New research offers insights into how venture capitalists make funding decisions. The Breakdown:
30.4% – Potential Return
27% – Founders’ Experience
26.4% – Market Readiness
6.6% – Regulatory Exposure
6.4% – Social Connection with Founders
3.2% – Lead investor