3 ms·
Full time investor here. There have been some clear changes in the market that others have pointed out: 1. Diligence windows have increased. Nobody is rushing t
by gkapur 4y ago
Full time investor here. There have been some clear changes in the market that others have pointed out:
1. Diligence windows have increased. Nobody is rushing to deploy capital.
2. Series A and beyond feel fairly frozen at this point in time.
3. Seed valuations have compressed a bit towards pre-seed.
4. Your average joe feels poorer and is concerned about the market and future funding.
I always encourage every company that is raising to start by establishing to lay of the land for them. Are they vastly outperforming? Amazing traction? Is there team extremely credentialed? Well connected? Hot space?
If you have some of those, you go the the VCs who invest in your market (research companies in your space but not directly competitive and see who funded them) by getting connected through your network and you have a reasonable shot at someone being interested at some price. You then try to use that pricing (if you think it is unfavorable) to drive other investors to a decision -- investors feel FOMO.
If you don't have this, you normally simultaneously build while either: 1. Joining an accelerator. 2. Meeting people about town until you find a believer. The slight difference in this market is that angel investors may be less likely to invest on their own because follow-on funding is an existential risk. So you likely have to find a true believer who can write a bigger check or is comfortable with that risk.