10 Simple Steps to Improve The Odds You Get VC Funded

I can’t magically change your growth rate.  I can’t magically turn you into the hottest Gen AI start-up out there.  But I can help you at least increase the odds that when you do look for VC funding, you get it.  By avoiding … unforced errors.

My list:

#1.  Just Send the Deck.  The Very, Very Best Deck You Can.

If you have the hottest start-up on the planet, you can send a teaser deck, or no deck at all.  But if you are the one doing the selling, put it out there.  Share the deck when asked.  Share it all.  Share everything anyone would want to know to invest in you.  Not just a sliver.

#2.  VAs (Virtual Assistants) are Great.  But Don’t Use One With VCs.

I see strong founders dump VC scheduling on their VAs.  Don’t.  Why not?  Because it says it isn’t a priority.  95% of the best founders I work with schedule the meetings themselves — when it’s important.

#3.  Don’t Take Any Of It Personally.  Especially Ghosting and Passing.

Selling stock is … sales.  And the earlier stage you are, generally speaking, the fewer people will see that they want to buy.  So don’t take it personally.  And if you get “ghosted” by a VC?  If you don’t hear anything?  Just follow up once.  Ask if they are still interested.  Take the initiative.  If they aren’t, they aren’t.  Move on.

#4.  Be Careful of Artificial Urgency

Yes, you don’t want a fundraising process to drag on.  But sometimes, it has to.  Don’t tell VCs you are raising in the next week, or that they have a very short window to decide, if they don’t.  It will just lead to folks passing that might otherwise dig in.  It’s really, really hard to email back a few weeks later and say, “Just Kidding, you have more time to look at the deal.”

#5.  You Need 3 Great Months of Growth in a Row to Fundraise

It’s OK if it took you a few years even to get to traction.  But unless you are raising from folks that truly invest pre-revenue, investors are going to want to see 3 strong months of growth in a row.  It’s OK if the prior 12-24 were slow.  But early-stage VCs generally need to see at least 3 strong months in a row to get excited.  And probably 3-4+ quarters for late stage VCs to believe growth has re-accelerated.   Don’t waste folks time before then.

#6.  Don’t Be a VC Snob

There are definitely risks raising capital from non-standard investors.  But don’t be a snob talking to associates, vice presidents, and others that aren’t true “partners” at VC firms.  Is it harder to get funded by a VC that isn’t a general partner?  Yes.  But do non-partners sourced many of the top deals?  Absolutely.

#7.  Do Your Research.  Please.

The best founders always research the VCs they reach out to.  No lame generic outreach.  If nothing else, point out an existing investment or two they’ve made that is somewhat similar to yours.

#8.  Cold Email Does Work.  And Often Better That a Medioce Warm Intro.

Almost all early stage VCs read and invest in cold email.  Many of SaaStr Fund’s best investments are from cold email.  David Sacks, Aileen Lee, Keith Rabois and more have all done many investments from cold emails.  More here.

Just remember, they really have to be great.

And a great cold email is better than a weak warm connection.  VCs live in email all day.  Take advantage of that.  But again, make it great.

Many of the top VCs are looking for outsiders.  Not all of them, but many.  Don’t be intimidated because you aren’t a Stripe alum or didn’t go to Stanford.  Go for it.  So many of the best founders seem to come out of … almost nowhere.

#9.  Sometimes, “Not Right Now” is True.  Keep Those Folks In The Loop.

Many VCs will pass on a deal for any number of reasons and say that you’re just too early, or something similar, as a general reason.  But sometimes it really true, and a few more good months, or a tiny bit more ARR, will be enough.  I invested in Salesloft ($2.4B) and Gorgias ($800m) only after a few more months of progress.  I loved the founders, it just really was too early (<$10k MRR) when I first met them.  Usually, you are either in or out.  But not always.

Keep VCs that truly were interested in the loop on monthly updates or a similar format.  They can work like magic.

#10.  Ask Yourself — Would You Invest, Based On What You Are Sending and Saying to VCs?

Re-read that email before you send it.  Re-read that deck.  Send them to other founders who have raised VC capital.  Look at your metrics objectively.  Would you invest, yourself, based just looking at the communications and metrics?  If not, level them up.