Somebody who successfully raises an A has done all the prior prep work. They're deeply embedded in their market. They've built relationships with VCs over the previous year or two, so nothing about th...
A few years ago I had three founders on a panel who had all just raised their Series A. I asked them what they thought their chances of raising an A were when they set out. I said, "I'm sure you knew you'd raise something, because the business was doing well and growing. But before the process started, where would you have pegged your ability to raise an A?"
All three said 100%.
I was blown away by that, until I realized what it actually meant. Somebody who successfully raises an A has done all the prior prep work. They're deeply embedded in their market. They've built relationships with VCs over the previous year or two, so nothing about the process is surprising going in. Their whole pre-A execution strategy was built around knowing where the bar is. By the time they asked, they already knew.
That's the difference I can hear within a couple of minutes of talking to a founder. People who are guessing tell you what they're doing, and then want you to opine on it. They come in with an idea they've worked on for a bit and ask, more or less, "What do you think? Is this worth funding?" People who know tell you what they're going to do, because they see the raise as a foregone conclusion.
Those two pitches are dramatically different—and it doesn’t only relate to fundraising. It’s the same for job interviews and selling to qualified clients. You know you can win when you’ve done the homework, and when you’ve done the homework, you can win.
This week, I did another of our quarterly How I Raised sessions with Qapita, our favorite cap table management tool, with Advait from Elm AI and Manthan from Destro. Advait's company spun out of Cornell Tech. Manthan's builds the software that tells 25 to 50 warehouse robots at a time what to do. Both of them were in the second category, and Advait explained why without my having to ask.
I asked Advait what the first months looked like, before there was a company. "We just had one KPI. Number of people you talked to in that industry for that week."
That was the whole dashboard. He and his co-founders were doing a hundred, two hundred meetings, and every week they'd sit down and ask, "How many people did you reach out to? How many did I reach out to?" They kept a hypothesis bank and crossed things off as real people either confirmed them or laughed.
Successful fundraisers know they're going to be successful because they've done that work. They're in the flow of it--and the same goes for fundraising. If you don't talk to enough other founders who have successfully raised from solid, recognizable VCs, you're not the student of the game you need to be.
You'll find yourself guessing. You're probably going to fail, and not because the idea is bad, but because the process of going from a guess to a certainty is the process of being prepared to raise.
They're the same thing.
Run through the questions every VC asks and you can see the difference at each one.
How much are you raising? Guessing: "Somewhere between one and three, depending on interest." Knowing: a number, with the math behind it for the next 24 months, and a sense of how far above it the market might take you. Manthan went out saying four with a baseline and a ceiling. He didn't float a range and wait for someone to pick.
Who are you talking to? Guessing: everybody who'll take the meeting. Advait's first round, in his words, was "spray and pray," and it took six months. Knowing: you've checked who's written checks at your stage, what size, in what, and whether they lead. You already know who the one or two investors in your space are and you've been talking to them for months.
How did you get the meeting? Guessing: a cold email. Knowing: a founder who already raised vouched for you. Advait's second round is the model here. He was planning to raise in the fall, once they'd hit seven figures in revenue. So he went out to San Francisco months ahead of that, not to pitch investors but to meet founders. His words: "This time I thought I'll do it right. I will get intros from founders, which is way better than cold outreach, founders who know me, who believe in me." The plan was to start those conversations early, keep people posted on progress, and show up in the fall already known. It worked faster than he planned. He was at a friend's office, an investor walked in, and the round was oversubscribed within a week. That takes knowing enough other founders in the first place, which takes the same weekly habit of talking to people that gets you customers.
What's the bar? Guessing: you don't know, so you ask the VC. Knowing: you've seen what a fundable company in your space looks like because you've talked to enough people to have seen one, and you've been building toward it on purpose. Manthan knew what traction his seed investors expected and showed up with what the next round would want.
What happens if they say no? Guessing: you don't have a next move. Knowing: it's a tiered process. Tier three first, where you learn and practice. Tier one only once you've got a term sheet in hand. And you've held something back, a customer close or a key partnership, as the thing that turns a maybe into a yes.
When did you start? Guessing: when the money got low. Knowing: a year ago, in conversations that opened with "we're not raising."
None of that is a trick. It's what you end up with after talking to a hundred people in your market and a couple dozen investors before you ask anyone for anything.
Advait's first round was the guessing version: six-plus months, hundreds of meetings, no idea what anyone's check size was or that you need a lead first. His second was the knowing version: three investors, all three in, oversubscribed in a week. Same founder, same company, with a year of talking to people in between.
Manthan did a version of the same thing. Before the seed, he took something like 20 calls where the message was "we're not raising, we're not raising, we're not raising. Boom, we're raising." Warm intros from his pre-seed investors. Tier three first to learn the market, tier one only once he had a term sheet. He held the close of his second enterprise customer as what he called the "closing blow." Out for two million, oversubscribed to fourteen, took eight.
Here's the mistake I made over 105 first checks. I treated being good at fundraising as separate from being good at running a company. I'd back someone who was guessing on the raise because I figured the operating was a different skill. I've come to see the preparation as one and the same.
Manthan said something that explains why. They've got years of runway now, and they still run Destro as if "tomorrow we won't exist." They're never comfortable, and part of never being comfortable is that you're always learning and you don't take anything for granted. People who are always learning are constantly talking to people, not just selling, but figuring out what would make a customer spend more, who they need to get to know, who's in their corner. They know running the company means getting out of the building, not just keeping your head down.
People ask me what the number of people per week should be. I don't think there is one. If you need someone to tell you the number, you're still guessing.
