6 ms·

Our fundraising learning post-YC

79 points by matijash 5y ago

ryan-duve 5y ago
I am getting a 404 when I visit https://wasp-lang.github.io/blog/2021/11/22/fundraising-learnings https://wasp-lang.github.io/blog/2021/11/22/fundraising-lear.... Could you double check the permissions/link to make sure everything looks correct?
- matijash 5y ago
  sorry about that, seems like HN is doing some URL expanding which messes it up, this was the original URL: https://wasp-lang.dev/blog/2021/11/22/fundraising-learnings https://wasp-lang.dev/blog/2021/11/22/fundraising-learnings
  - dang 5y ago
    Our software follows the canonical URL when there is one, and your page says that https://wasp-lang.github.io/blog/2021/11/22/fundraising-learnings https://wasp-lang.github.io/blog/2021/11/22/fundraising-lear... is the canonical URL. I'll switch it back now but you might want to fix that!
    - matijash 5y ago
      thanks a lot for the info!
criddell 5y ago
Offtopic, but learnings is such a weird word. It reads like a plural noun and if it is, then what would the singular version be?
- steve_coral 5y ago
  Learnings is indeed a strange word but the most applicable synonym would be "take-aways" or "lessons". Kind of like how you always have "misgivings" but rarely "a misgiving"
- staunch 5y ago
  Yeah "learnings" is just corpspeak for "lessons" because it seems more sophisticated (to some people).
  - matijash 5y ago
    yeah, "Fundraising lessons learned post-YC" prob would have been better, thanks.
    - staunch 5y ago
      To be clear, since someone else was confused: I wasn't being critical of you for using this word. If anything, being a non-native English speaker is the one valid excuse for using corpspeak in earnest :-)
      - matijash 5y ago
        No worries, appreciate it, but I didn't feel attacked! Also learned a new word (corpspeak) :)
  - kaycebasques 5y ago
    This is a bit harsh and assumes mal-intent. The author said in another comment they are not a native speaker. From the HN guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html > Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
    - staunch 5y ago
      If you were following the guidelines yourself, you would have assumed my comment was not targeted at the author at all, which it was not. And you would most definitely not assume I was criticizing someone for their language skills...
- matijash 5y ago
  I am not a native speaker, so this definitely might not even be a proper word :). Some discussion about it here: https://english.stackexchange.com/questions/396140/is-there-a-word-such-as-learnings/566330 https://english.stackexchange.com/questions/396140/is-there-...
  - AnimalMuppet 5y ago
    No, it's not a proper word. It is, however, a word that is used somewhat frequently ;-) In native English business circles, it's a word that someone made up so that they could say "what are our learnings" instead of "what did we learn". Why? To sound more sophisticated and pretentious - or so I suspect. Anyway, yeah. People use it, even native speakers, even though the word should be taken out and shot.
- kaycebasques 5y ago
  My take as a technical writer who has edited lots and lots of documentation from non-native speakers, non-professional writers, and so on: if you stumble over the sentence and you have to go back and read it twice or more times to understand what they are saying, then by all means the sentence should be reworded. Otherwise there are probably bigger fish to fry. In this case "learnings" would pass my test. Even if it's a non-standard word I got the gist of their idea without a second glance.
  - matijash 5y ago
    this is helpful, thank you!
xiaolingxiao 5y ago
@matijash what was the content of the follow up email you sent, was it updates on WASP, more data on traction, fundraising, ect? What did you say to prompt people to act? And did you ever pre-empt by just sending a SAFE (assuming the round is not priced) on a follow up email?
- matijash 5y ago
  At that time we were pretty much fundraising full-time, and given there were only 2 of us and the product was at early stage we couldn't really do a meaningful push on traction, so we mostly focused on the updates on the fundraising side. The basic format of the follow-up was "Hey, you mentioned you'd follow-up in X days so I wanted to check if you are still interested in investing?". Then I would, if applicable, also add a line like e.g. "since we last spoke, we raised another $X from investor Y" or "we almost closed the part of the round dedicated to the angels and have only $X available". I would send over a SAFE only if the investor agreed to invest and had completed the handshake protocol (https://www.ycombinator.com/handshake/ https://www.ycombinator.com/handshake/).
  - xiaolingxiao 5y ago
    Ok this is very helpful yeah, there's this strange dynamic where people want to come by to take a look ( as if we're a vendor on the side of the street which we kind of are in this context ), but then no one wants to be the first to move. On Zoom everything is extra weird because ... Zoom.
    - matijash 5y ago
      yeah, definitely. The advice we often got was to either go fundraising full-on or not at all, because it's very hard without that momentum that takes time to build up (as you could see on our chart, in the end we had even more interest that we aimed for, but took time to get there). I never did fundraising pre-Zoom/covid so can't compare, but the advantage here was the sheer volume of meetings we could do in a single day. I guess that in-person it would be easier to build rapport, but Zoom was definitely an advantage when playing the numbers game.
jiveturkey 5y ago
really great article, so rare to not simply say what everyone knows but in your own voice. What I got out of it (which is known) is that founder+CEO is like politician. Most of your job is fundraising.
- matijash 5y ago
  Thanks! Haha yes, it definitely felt like it at times. Fundraising really took me out of the product pretty much completely, so my co-founder was keeping the fort there and keeping us afloat. At first we were fundraising together, but then we quickly realised it just wasn't feasible. The next thing was hiring - in many ways similar to fundraising, a lot of lead generation, rejections and also very occupying. I think and hope now will be a bit easier to get back to the product, but there are definitely things that from time to time completely consume you it seems.
dreyfan 5y ago
They had 250+ meetings over ~3 months to raise only $1.5M? Wow. That's a lot of time that could have been spent building a product. Is this what YC money is supposed to be for? You get a few months of runway that you need to turn into a higher raise to have a longer runway on someone else's dime? Are there any hacker/entrepreneur communities that focus on revenue-funded efforts instead of the self-perpetuating financing cycles?
- santiagobasulto 5y ago
  This is pretty common. I don’t say it’s right, but it’s practically the norm. The good news is that usually this time is not so impactful in the life of the startup. The founder will plan how much money they’ll need to execute the next ~2 years and will dedicate 2 entire months to fundraiser. After that, they’ll have 22 months of absolute focus and peace of mind to keep building product.
  - jimmont 5y ago
    Has there been notable effort around improving the effectiveness of this process? From a distance it appears to be a waste of time. I'm making assumptions--that primarily makes guesses and significant assumptions about the range of those who attempt to raise funds. (Having gone through the seedfund process previously I have similar opinions about that program as well, not that this has much relevance to the question I'm asking. However that program doesn't require as much time which depending on circumstance makes it appear more effective.)
    - matijash 5y ago
      There is a lot of variance in how much time it takes for a startup to raise - some are already done before Demo Day, and some take a couple of months or they postpone it for later. Although it looks like a waste of time from the distance, since it prevents you from building the product, in our case it was actually a very useful and formative experience, I'd dare to say even the most of all parts of YC. Being an OSS, developer and tech oriented startup with no revenue it made us very aware of that and forced us to learn about how we can get there. As the result, we solidified our vision and actually feel much more confident about it now than before the fundraising.
whoisnnamdi 5y ago
Good on you guys for being so transparent about your fundraise process! Amazing persistence, glad it worked out
- matijash 5y ago
  Thank you!
headelf 5y ago
Can the op comment on this: "We compared ourselves to big, successful companies". How did you phrase it?
- matijash 5y ago
  The main idea with this is to build validation by showing that somebody else did similar/analogous thing and succeedeed. E.g. "What Y did for Z, we will do the same but for X". And then the key point is in explaining how it is related and why it makes sense in your case to apply the same strategy. We learned that innovating on the product is already challenging enough, and if we also innovate on the business model / adoption strategy etc it just sounds too risky. The best thing here is just to follow on somebody else's footsteps, which also makes it much easier (both for investors and ourselves) to imagine what the future will look like.
pedalpete 5y ago
I'm surprised to see the founder describing their company as Deep-Tech, and I wonder if that description hindered their ability to raise. Not saying it isn't a technical product, but as per Wikipedia, deep tech is "based on substantial scientific or engineering challenges".
- xiaolingxiao 5y ago
  I think it's the DSL aspect. For anyone who's every try to write a language, it's not trivial. The people who do PL research in academia are typically mathematicians in the comp-sci department, whereas those who do machine learning ( which is "deep-tech") are usually engineers practicing statistics (poorly).
- matijash 5y ago
  Yeah, it definitely isn't a standardized term. I've also been hearing "hard tech" but then got a feeling it has more and more been used for hardware projects, although I dont think that that was the original idea. We actually never insisted on being called deep-tech, but we realised that was how others characterized us, especially when talking to investors (building a new programming language sounds pretty scary, although in our case it is a non turing complete DSL).
  - pedalpete 5y ago
    Fair enough. I was in a similar boat with my metaverse, pre-metaverse start-up https://ayvri.com https://ayvri.com - but a lot of what we were talking about was building 3D virtual worlds with AI. We didn't go looking for the deep tech label, but it was applied to us.
rajeevk 5y ago
@matijash congrats on successfully raising. Your blog post is super useful. I am a founder and at an early stage now. I am trying to raise and facing the similar situation. I would like to learn more from you. I sent contact invite to you on LinkedIn. I hope you do not mind connecting.

79 points by matijash 5y ago

I am getting a 404 when I visit https://wasp-lang.github.io/blog/2021/11/22/fundraising-learnings https://wasp-lang.github.io/blog/2021/11/22/fundraising-lear.... Could you double check the permissions/link to make sure everything looks correct?

matijash 5y ago
sorry about that, seems like HN is doing some URL expanding which messes it up, this was the original URL: https://wasp-lang.dev/blog/2021/11/22/fundraising-learnings https://wasp-lang.dev/blog/2021/11/22/fundraising-learnings
- dang 5y ago
  Our software follows the canonical URL when there is one, and your page says that https://wasp-lang.github.io/blog/2021/11/22/fundraising-learnings https://wasp-lang.github.io/blog/2021/11/22/fundraising-lear... is the canonical URL. I'll switch it back now but you might want to fix that!
  - matijash 5y ago
    thanks a lot for the info!

criddell 5y ago

Offtopic, but learnings is such a weird word. It reads like a plural noun and if it is, then what would the singular version be?

steve_coral 5y ago
Learnings is indeed a strange word but the most applicable synonym would be "take-aways" or "lessons". Kind of like how you always have "misgivings" but rarely "a misgiving"
staunch 5y ago
Yeah "learnings" is just corpspeak for "lessons" because it seems more sophisticated (to some people).
- matijash 5y ago
  yeah, "Fundraising lessons learned post-YC" prob would have been better, thanks.
  - staunch 5y ago
    To be clear, since someone else was confused: I wasn't being critical of you for using this word. If anything, being a non-native English speaker is the one valid excuse for using corpspeak in earnest :-)
    - matijash 5y ago
      No worries, appreciate it, but I didn't feel attacked! Also learned a new word (corpspeak) :)
- kaycebasques 5y ago
  This is a bit harsh and assumes mal-intent. The author said in another comment they are not a native speaker. From the HN guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html > Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
  - staunch 5y ago
    If you were following the guidelines yourself, you would have assumed my comment was not targeted at the author at all, which it was not. And you would most definitely not assume I was criticizing someone for their language skills...
matijash 5y ago
I am not a native speaker, so this definitely might not even be a proper word :). Some discussion about it here: https://english.stackexchange.com/questions/396140/is-there-a-word-such-as-learnings/566330 https://english.stackexchange.com/questions/396140/is-there-...
- AnimalMuppet 5y ago
  No, it's not a proper word. It is, however, a word that is used somewhat frequently ;-) In native English business circles, it's a word that someone made up so that they could say "what are our learnings" instead of "what did we learn". Why? To sound more sophisticated and pretentious - or so I suspect. Anyway, yeah. People use it, even native speakers, even though the word should be taken out and shot.
kaycebasques 5y ago
My take as a technical writer who has edited lots and lots of documentation from non-native speakers, non-professional writers, and so on: if you stumble over the sentence and you have to go back and read it twice or more times to understand what they are saying, then by all means the sentence should be reworded. Otherwise there are probably bigger fish to fry. In this case "learnings" would pass my test. Even if it's a non-standard word I got the gist of their idea without a second glance.
- matijash 5y ago
  this is helpful, thank you!

xiaolingxiao 5y ago

@matijash what was the content of the follow up email you sent, was it updates on WASP, more data on traction, fundraising, ect? What did you say to prompt people to act? And did you ever pre-empt by just sending a SAFE (assuming the round is not priced) on a follow up email?

matijash 5y ago
At that time we were pretty much fundraising full-time, and given there were only 2 of us and the product was at early stage we couldn't really do a meaningful push on traction, so we mostly focused on the updates on the fundraising side. The basic format of the follow-up was "Hey, you mentioned you'd follow-up in X days so I wanted to check if you are still interested in investing?". Then I would, if applicable, also add a line like e.g. "since we last spoke, we raised another $X from investor Y" or "we almost closed the part of the round dedicated to the angels and have only $X available". I would send over a SAFE only if the investor agreed to invest and had completed the handshake protocol (https://www.ycombinator.com/handshake/ https://www.ycombinator.com/handshake/).
- xiaolingxiao 5y ago
  Ok this is very helpful yeah, there's this strange dynamic where people want to come by to take a look ( as if we're a vendor on the side of the street which we kind of are in this context ), but then no one wants to be the first to move. On Zoom everything is extra weird because ... Zoom.
  - matijash 5y ago
    yeah, definitely. The advice we often got was to either go fundraising full-on or not at all, because it's very hard without that momentum that takes time to build up (as you could see on our chart, in the end we had even more interest that we aimed for, but took time to get there). I never did fundraising pre-Zoom/covid so can't compare, but the advantage here was the sheer volume of meetings we could do in a single day. I guess that in-person it would be easier to build rapport, but Zoom was definitely an advantage when playing the numbers game.

jiveturkey 5y ago

really great article, so rare to not simply say what everyone knows but in your own voice. What I got out of it (which is known) is that founder+CEO is like politician. Most of your job is fundraising.

matijash 5y ago
Thanks! Haha yes, it definitely felt like it at times. Fundraising really took me out of the product pretty much completely, so my co-founder was keeping the fort there and keeping us afloat. At first we were fundraising together, but then we quickly realised it just wasn't feasible. The next thing was hiring - in many ways similar to fundraising, a lot of lead generation, rejections and also very occupying. I think and hope now will be a bit easier to get back to the product, but there are definitely things that from time to time completely consume you it seems.

dreyfan 5y ago

They had 250+ meetings over ~3 months to raise only $1.5M? Wow. That's a lot of time that could have been spent building a product. Is this what YC money is supposed to be for? You get a few months of runway that you need to turn into a higher raise to have a longer runway on someone else's dime? Are there any hacker/entrepreneur communities that focus on revenue-funded efforts instead of the self-perpetuating financing cycles?

santiagobasulto 5y ago
This is pretty common. I don’t say it’s right, but it’s practically the norm. The good news is that usually this time is not so impactful in the life of the startup. The founder will plan how much money they’ll need to execute the next ~2 years and will dedicate 2 entire months to fundraiser. After that, they’ll have 22 months of absolute focus and peace of mind to keep building product.
- jimmont 5y ago
  Has there been notable effort around improving the effectiveness of this process? From a distance it appears to be a waste of time. I'm making assumptions--that primarily makes guesses and significant assumptions about the range of those who attempt to raise funds. (Having gone through the seedfund process previously I have similar opinions about that program as well, not that this has much relevance to the question I'm asking. However that program doesn't require as much time which depending on circumstance makes it appear more effective.)
  - matijash 5y ago
    There is a lot of variance in how much time it takes for a startup to raise - some are already done before Demo Day, and some take a couple of months or they postpone it for later. Although it looks like a waste of time from the distance, since it prevents you from building the product, in our case it was actually a very useful and formative experience, I'd dare to say even the most of all parts of YC. Being an OSS, developer and tech oriented startup with no revenue it made us very aware of that and forced us to learn about how we can get there. As the result, we solidified our vision and actually feel much more confident about it now than before the fundraising.

whoisnnamdi 5y ago

Good on you guys for being so transparent about your fundraise process! Amazing persistence, glad it worked out

matijash 5y ago
Thank you!

headelf 5y ago

Can the op comment on this: "We compared ourselves to big, successful companies". How did you phrase it?

matijash 5y ago
The main idea with this is to build validation by showing that somebody else did similar/analogous thing and succeedeed. E.g. "What Y did for Z, we will do the same but for X". And then the key point is in explaining how it is related and why it makes sense in your case to apply the same strategy. We learned that innovating on the product is already challenging enough, and if we also innovate on the business model / adoption strategy etc it just sounds too risky. The best thing here is just to follow on somebody else's footsteps, which also makes it much easier (both for investors and ourselves) to imagine what the future will look like.

pedalpete 5y ago

I'm surprised to see the founder describing their company as Deep-Tech, and I wonder if that description hindered their ability to raise. Not saying it isn't a technical product, but as per Wikipedia, deep tech is "based on substantial scientific or engineering challenges".

xiaolingxiao 5y ago
I think it's the DSL aspect. For anyone who's every try to write a language, it's not trivial. The people who do PL research in academia are typically mathematicians in the comp-sci department, whereas those who do machine learning ( which is "deep-tech") are usually engineers practicing statistics (poorly).
matijash 5y ago
Yeah, it definitely isn't a standardized term. I've also been hearing "hard tech" but then got a feeling it has more and more been used for hardware projects, although I dont think that that was the original idea. We actually never insisted on being called deep-tech, but we realised that was how others characterized us, especially when talking to investors (building a new programming language sounds pretty scary, although in our case it is a non turing complete DSL).
- pedalpete 5y ago
  Fair enough. I was in a similar boat with my metaverse, pre-metaverse start-up https://ayvri.com https://ayvri.com - but a lot of what we were talking about was building 3D virtual worlds with AI. We didn't go looking for the deep tech label, but it was applied to us.

rajeevk 5y ago

@matijash congrats on successfully raising. Your blog post is super useful. I am a founder and at an early stage now. I am trying to raise and facing the similar situation. I would like to learn more from you. I sent contact invite to you on LinkedIn. I hope you do not mind connecting.