Brett Martin @brett1211
fundraising is odd, based on what we’ve experienced from a few of our co’s this year. each stage of co. has diff. VC decision trees.
seed to Series A:
1. big TAM, awesome team = ✔️
2. competitive market = ✔️
3. repeatability of biz model = ✔️
4. “who else is funding?” = 😡
Series A to B:
1. clear drivers = ✔️
2. unit economics progression = ✔️
3. management expansion = ✔️
4. “above is too early for fund” = 😡
a founder in a very competitive, VC-backed marekt stopped by today to give an update on her business. she’s been building the co. for a few years.
her update stressed a few themes that I keep thinking about about the oddities of venture capital, so sharing them in this thread.
her competitors raised ~$100m+ from VCs but she struggled to raise ~$4m.
she struggled because:
1. the co. wasn’t a “perceived” leader by investors, so raising was hard.
2. investors believed the market was “winner take all” and only wanted to make positions in a “leader”.
she had either a choice to give up and sunset the company or build something that was sustainable. she chose the latter.
getting to profitability forced her to:
3. do one thing well, i.e. deliver revenue