So raising VC capital has gotten a lot harder than it was at the peak of 2021 — when it was still hard for all but the best and more privileged.
But boy, it’s harder today. Everything has slowed down, the bar has gone up, and even VC funds themselves are struggling to do their own fundraising:
So I wanted to write a simple post, one that may be obvious to some, but it’s my #1 hack to increase the odds a VC invests in you:
The hack: Crush the current / next month, and send an immediate update on the 1st of that month.
When VC rounds used to get done in a week, your performance for next month often wasn’t part of the VC analysis. Everyone thought they had to decide … quickly.
But now, meetings and evaluations and get-to-know-you’s are stretching over multiple calendar months (perhaps as they should).
And you know what’s just about the best way to get more excited as a VC? To be thinking about a deal, and then the 1st of the month, get an update that they are doing even better than you thought.
And there’s even a bit of valuation micro-deflation happening here. If a VC was interested in investing at say, a $15m valuation at $1m ARR, and next month, you grow +10% and the price is still $15m … that VC gets an even better deal. An extra data point, an extra proof point, and an extra month of progress and revenue. And a smidge better deal from an ARR multiple perspective. The smidge better deal does help, especially if the VC feels like they are overpaying or paying the high end of market.
So if the current month looks good, maybe let it do some of the talking with the VCs you are talking to or plan to talk to. Get them a great update for the month ASAP. Maybe even on the 31st.
It just really works to derisk things, build confidence, and add another key proof point. Because, as a VC, there is just so much you don’t know.