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Step-By-Step Fundraising Tactics from an NYC Founder Who Raised $750M

140 points by imartin2k 9y ago

fencepost 9y ago
Kevin Ryan, of DoubleClick, Gilt, Mongo DB, BusinessInsider, and Nomad Health. Edit: fine, no snarky comments
yosho 9y ago
One of the better fundraising guides out there for sure.
nawgszy 9y ago
Not really a criticism, but this read a bit like a slimy dating guide. "Remember, like everyone else they want to feel wanted for more than their money". "Keep them all interested until you've made up your mind". "Subtly let them know that you're wanted by others". On an unrelated note: I don't know why I can never contribute constructively on this site, but here I am.
- deleted 9y ago
  [deleted]
- sillysaurus3 9y ago
  re: your last point, It's not just you. A few of us are feeling that way. Know any alternatives? Otherwise we could band together and try to form an HN 2.0. It probably won't work, but it's worth attempting.
- meri_dian 9y ago
  What's slimy about it? It's realistic
  - Nomentatus 9y ago
    "Absolutely" is a lie in this situation. Lying, is, realistically, a better way to make any sale - but also realistically, an invitation to lawsuits and prosecution. "She said, ‘Look, it’s not easy. It’s hard. A couple things have to come together, but I think if they do, we’ll be in a position to make the budget.’ That’s a very honest answer. But it’s not the answer to give in this situation.” When you’re pitching, he says, the right answer is: “Absolutely. In fact, I actually think we’re going to do a little bit better, but I don’t like to over-promise. There are a couple things that are not in there that we think we can hit. We are absolutely going to make those numbers."
    - hugs 9y ago
      I stopped reading after that paragraph. I'd rather give honest answers than think that I have to lie to get funding. Also, my startups have raised tens of millions of dollars, so I'd rather not trust the author's advice.
- CalChris 9y ago
  Given that this was published by a VC and that the writer has been on both sides of the table, I think you're misreading it.
  - nawgszy 9y ago
    I wasn't really trying to imply it's bad advice or isn't ethical or anything. I get that the parallel I decided to draw does indeed somewhat imply that, but my intentions weren't as such. Just struck me as funny.
- owens99 9y ago
  How did you think they made sausage?
bsder 9y ago
> “When I plan to be raising in six months, I’m already out there, proactively connecting with VCs, having coffees, making as many of them aware of my company as possible,” says Ryan. “The conversation is safer when I’m not raising money.” Yeah, because so many of us can pick up the phone and have VC's go have coffee with us for no reason at all. <rolls eyes> Starting off an article on fundraising with "Have a lot of rich friends" doesn't actually add credibility to the rest of the article.
- badspeler 9y ago
  I mean, being rich is by far the most important factor for success followed by having rich friends.
- azinman2 9y ago
  This wasn’t a “how to build your network” article.
hoodoof 9y ago
I deeply hope to never raise money in my life.
- owens99 9y ago
  The wealthiest among all my investors (who are also self-made) never raised VC for their startups. All bootstrapped. Too many founders pour their life into a project and end up making less than their investors do from the sale of their own company. That said, if you can raise a lot for very little equity in a short time, it can be worth it.
  - atupis 9y ago
    There is definitely place for VC money, but only if market is untapped and late entry to market will cost billions of dollars(Facebook, Uber or that company who will create first self-driving car fleet etc).
  - danieltillett 9y ago
    This is the real secret of the VC industry. Bootstrapping is only harder at the beginning.
flyinglizard 9y ago
This was the best article I remember reading about the subject.
ceeker 9y ago
Probably one of the best articles I have read about fund raising. It is much more tactical than the typical advice you see on this topic. First Round has a lot of fluff articles but this one is really worth reading.
kosei 9y ago
Frankly, this seems like a great article pointing out exactly why the VC and startup space is such a male dominated area. So many clear male biases here (exude confidence, fake it until you make it, etc)
- snappyTertle 9y ago
  Are you saying non males don't have confidence and can't fake it until they make it?
  - DeltaCoast 9y ago
    I think they may be referencing a confidence gap[1]. 'Fake until you make it' seems like it's referring to imposters syndrome[2]. I haven't found any evidence that it's more prevalent in women than men. Anecdotally women's credentials & skills in tech are often more scrutinized than men which makes 'faking it' seem less possible. 1.https://scholar.harvard.edu/files/sarsons/files/confidence_final.pdf https://scholar.harvard.edu/files/sarsons/files/confidence_f... 2.http://www.paulineroseclance.com/pdf/ip_high_achieving_women.pdf http://www.paulineroseclance.com/pdf/ip_high_achieving_women...
juskrey 9y ago
Bullshitology
- bob_theslob646 9y ago
  Why?
  - moocowtruck 9y ago
    the entire thing is a step by step guide how to bullshit people so you get cash; that's probably why
deleted 9y ago
[deleted]
iamleppert 9y ago
Does it strike me odd that CEOs and founders complain about fund raising? That's one of the most important parts of their job. And I don't see how having 20 VC pitch meetings lasting 30 minutes on average over the course of three months is exactly "hard" work. I'd expect nothing less, and perhaps even more. Or at least some kind of analytical approach to the process that is both reasoned and strategic as it is diligent. I'd assume after the first few presentations you'd pretty much have it down save for some specific research on the firm. If its a lot of e-mailing and paper/busy work, one can hire an assistant or PT contract staff to help. This is the kind of work I'd relegate as a skill, but not a pure talent if that makes any sense. Some people are probably more natural than others but the skills required aren't worth staking your life on, and this is very much one of those things where all the value comes from experience and knowing the right people. If people don't want to fundraise, the solution is simple: don't be a CEO or start a company.
- eli 9y ago
  If you bootstrap it isn't really part of the job at all. You can still start a company and be CEO. Not every startup needs $750M and many would be worse off to have it.
- adventured 9y ago
  > Does it strike me odd that CEOs and founders complain about fund raising? That's one of the most important parts of their job. > If people don't want to fundraise, the solution is simple: don't be a CEO or start a company. That has to be heavily qualified, as it applies to a very small subset of CEOs and founders. Your last statement is radically off-base vs the reality of who starts most new companies in the US. The extreme majority, 99%, of all CEOs and founders in the US do not actively fund raise as part of their jobs. They have actual operating businesses that require their attention and pay for themselves with sales, or otherwise are bootstrapping on variations of self-funding. Few start-ups in the US are backed by venture capitalists or involve VC fund raising. ~500,000 new businesses are started every month in the US. ~400k-500k new employer businesses are started each year. Less than 1% of all of those businesses are backed by venture capitalists.
- wastedhours 9y ago
moocowtruck 9y ago
so the name of the game is lie through your teeth, and learn about your opponent so you can lie better..
LeoJiWoo 9y ago
Is this still applicable? I've been hearing seed funding is dramatically drying up.
simonebrunozzi 9y ago
This is a joke. "You basically start to believe your own bullshit after a while, and that’s a good thing." How can this be taken as serious advice? I hate this guy, and what this guy represents. I am not a bullshitter, and I will never be one. I'd rather not raise money and fail, than bullshit my way to IPO.

140 points by imartin2k 9y ago

fencepost 9y ago

Kevin Ryan, of DoubleClick, Gilt, Mongo DB, BusinessInsider, and Nomad Health. Edit: fine, no snarky comments

yosho 9y ago

One of the better fundraising guides out there for sure.

nawgszy 9y ago

Not really a criticism, but this read a bit like a slimy dating guide. "Remember, like everyone else they want to feel wanted for more than their money". "Keep them all interested until you've made up your mind". "Subtly let them know that you're wanted by others". On an unrelated note: I don't know why I can never contribute constructively on this site, but here I am.

deleted 9y ago
[deleted]
sillysaurus3 9y ago
re: your last point, It's not just you. A few of us are feeling that way. Know any alternatives? Otherwise we could band together and try to form an HN 2.0. It probably won't work, but it's worth attempting.
meri_dian 9y ago
What's slimy about it? It's realistic
- Nomentatus 9y ago
  "Absolutely" is a lie in this situation. Lying, is, realistically, a better way to make any sale - but also realistically, an invitation to lawsuits and prosecution. "She said, ‘Look, it’s not easy. It’s hard. A couple things have to come together, but I think if they do, we’ll be in a position to make the budget.’ That’s a very honest answer. But it’s not the answer to give in this situation.” When you’re pitching, he says, the right answer is: “Absolutely. In fact, I actually think we’re going to do a little bit better, but I don’t like to over-promise. There are a couple things that are not in there that we think we can hit. We are absolutely going to make those numbers."
  - hugs 9y ago
    I stopped reading after that paragraph. I'd rather give honest answers than think that I have to lie to get funding. Also, my startups have raised tens of millions of dollars, so I'd rather not trust the author's advice.
CalChris 9y ago
Given that this was published by a VC and that the writer has been on both sides of the table, I think you're misreading it.
- nawgszy 9y ago
  I wasn't really trying to imply it's bad advice or isn't ethical or anything. I get that the parallel I decided to draw does indeed somewhat imply that, but my intentions weren't as such. Just struck me as funny.
owens99 9y ago
How did you think they made sausage?

bsder 9y ago

> “When I plan to be raising in six months, I’m already out there, proactively connecting with VCs, having coffees, making as many of them aware of my company as possible,” says Ryan. “The conversation is safer when I’m not raising money.” Yeah, because so many of us can pick up the phone and have VC's go have coffee with us for no reason at all. <rolls eyes> Starting off an article on fundraising with "Have a lot of rich friends" doesn't actually add credibility to the rest of the article.

badspeler 9y ago
I mean, being rich is by far the most important factor for success followed by having rich friends.
azinman2 9y ago
This wasn’t a “how to build your network” article.

hoodoof 9y ago

I deeply hope to never raise money in my life.

owens99 9y ago
The wealthiest among all my investors (who are also self-made) never raised VC for their startups. All bootstrapped. Too many founders pour their life into a project and end up making less than their investors do from the sale of their own company. That said, if you can raise a lot for very little equity in a short time, it can be worth it.
- atupis 9y ago
  There is definitely place for VC money, but only if market is untapped and late entry to market will cost billions of dollars(Facebook, Uber or that company who will create first self-driving car fleet etc).
- danieltillett 9y ago
  This is the real secret of the VC industry. Bootstrapping is only harder at the beginning.

flyinglizard 9y ago

This was the best article I remember reading about the subject.

ceeker 9y ago

Probably one of the best articles I have read about fund raising. It is much more tactical than the typical advice you see on this topic. First Round has a lot of fluff articles but this one is really worth reading.

kosei 9y ago

Frankly, this seems like a great article pointing out exactly why the VC and startup space is such a male dominated area. So many clear male biases here (exude confidence, fake it until you make it, etc)

snappyTertle 9y ago
Are you saying non males don't have confidence and can't fake it until they make it?
- DeltaCoast 9y ago
  I think they may be referencing a confidence gap[1]. 'Fake until you make it' seems like it's referring to imposters syndrome[2]. I haven't found any evidence that it's more prevalent in women than men. Anecdotally women's credentials & skills in tech are often more scrutinized than men which makes 'faking it' seem less possible. 1.https://scholar.harvard.edu/files/sarsons/files/confidence_final.pdf https://scholar.harvard.edu/files/sarsons/files/confidence_f... 2.http://www.paulineroseclance.com/pdf/ip_high_achieving_women.pdf http://www.paulineroseclance.com/pdf/ip_high_achieving_women...

juskrey 9y ago

Bullshitology

bob_theslob646 9y ago
Why?
- moocowtruck 9y ago
  the entire thing is a step by step guide how to bullshit people so you get cash; that's probably why

deleted 9y ago

[deleted]

iamleppert 9y ago

Does it strike me odd that CEOs and founders complain about fund raising? That's one of the most important parts of their job. And I don't see how having 20 VC pitch meetings lasting 30 minutes on average over the course of three months is exactly "hard" work. I'd expect nothing less, and perhaps even more. Or at least some kind of analytical approach to the process that is both reasoned and strategic as it is diligent. I'd assume after the first few presentations you'd pretty much have it down save for some specific research on the firm. If its a lot of e-mailing and paper/busy work, one can hire an assistant or PT contract staff to help. This is the kind of work I'd relegate as a skill, but not a pure talent if that makes any sense. Some people are probably more natural than others but the skills required aren't worth staking your life on, and this is very much one of those things where all the value comes from experience and knowing the right people. If people don't want to fundraise, the solution is simple: don't be a CEO or start a company.

eli 9y ago
If you bootstrap it isn't really part of the job at all. You can still start a company and be CEO. Not every startup needs $750M and many would be worse off to have it.
adventured 9y ago
> Does it strike me odd that CEOs and founders complain about fund raising? That's one of the most important parts of their job. > If people don't want to fundraise, the solution is simple: don't be a CEO or start a company. That has to be heavily qualified, as it applies to a very small subset of CEOs and founders. Your last statement is radically off-base vs the reality of who starts most new companies in the US. The extreme majority, 99%, of all CEOs and founders in the US do not actively fund raise as part of their jobs. They have actual operating businesses that require their attention and pay for themselves with sales, or otherwise are bootstrapping on variations of self-funding. Few start-ups in the US are backed by venture capitalists or involve VC fund raising. ~500,000 new businesses are started every month in the US. ~400k-500k new employer businesses are started each year. Less than 1% of all of those businesses are backed by venture capitalists.
wastedhours 9y ago

moocowtruck 9y ago

so the name of the game is lie through your teeth, and learn about your opponent so you can lie better..

LeoJiWoo 9y ago

Is this still applicable? I've been hearing seed funding is dramatically drying up.

simonebrunozzi 9y ago

This is a joke. "You basically start to believe your own bullshit after a while, and that’s a good thing." How can this be taken as serious advice? I hate this guy, and what this guy represents. I am not a bullshitter, and I will never be one. I'd rather not raise money and fail, than bullshit my way to IPO.