7 Outdated Pieces of Fundraising Advice That could Sink your Pre-Seed Round
If you’re raising a pre-seed round, this blog is going to debunk a lot of the myths banded around by advisors.
Fundraising is about convincing a handful of people to believe in something you feel passionate about.
Seasoned VC investor Martin Casado, General Partner at Andreessen Horowitz, sheds light on some of the most common fundraising myths that could be sabotaging your pre-seed round.
By avoiding these outdated pieces of advice, you can dial-in to the right investors to increase your chances of securing those initial meetings.
Myth #1: The Summer Vacation - VCs Take a Break in May and September
This one might sound like a relic from a bygone era, but you'd be surprised how many founders still believe it.
Casado assures us that most VCs operate year-round. In fact, summer can be a prime time to connect with investors as many founders mistakenly hold off on fundraising during these months, giving you a potentially less competitive landscape.
Personally, I like to use the summer to build relationships. Eric Bahn General Partner at Hustle Fund VC tweeted this a few days ago.
Myth #2: Timeboxed Fundraising - Creating Artificial Deadlines for Investors
While some deals close quickly, often due to the founder’s strong track record or a well-known team, creating artificial deadlines for your fundraising rarely works in your favor.
If you’re a first time founder, investors need time for due diligence. Pressuring them for term sheets can raise red flags and ultimately push them away.
Instead, focus on building a strong case by generating traction for your company and demonstrating a clear understanding of your market opportunity.
Myth #3: Word Salad Pitches - Filling Your Pitch Deck with Jargon
Investors see a ton of pitches, they've heard every buzzword under the sun. Please don’t stuff your pitch deck with industry jargon, it will likely have the opposite effect.
If your goal is to sound inauthentic and out of touch then go ahead. Simply focus on clear, concise communication. Talk about the specific problem your startup solves and the value proposition you offer.
Myth #4: Just be Transparent - Pretending You're Not Raising When You Are
Maybe you've heard the advice to appear aloof and not actively seek funding. This might have worked in a different era, but today's VCs appreciate transparency. Don’t have a meeting with an investor in January and tell them you’re not fundraising, only to launch a pre-seed campaign a month later.
If you're raising a pre-seed round, be upfront about it. Genuine enthusiasm can be contagious, and directly reaching out to investors demonstrates your initiative.
Myth #5: Junior VCs Don't Matter - Ignoring the Power of the Rising Stars
Don't underestimate the influence of junior VCs. Often, they are the domain experts within a firm and can become champions for your startup internally.
Treat everyone how you’d like to be treated. Build relationships with them, it can open doors and provide valuable insights about how the Managing Partners make investment decisions.
If you are not convinced, Nicole DeTommaso of Harlem Capital breaks down on why you should engage with Junior VCs.
Myth #6: Don’t Fake it - Trying to Appear More Established is a red flag
Investors understand that pre-seed startups are still in their early stages. They're not looking for a finished product or a team with decades of experience.
Focus on showcasing your passion, your grasp of the market opportunity, and the potential for rapid growth.
Early-stage investors are more interested in meeting passionate teams with a moat and a deep founder-market-fit at pre-seed.
Authenticity and a clear vision resonates far more than a facade of experience.
Myth #7: The Team Tuck-Away - Hiding Your Team Slide Until the End
This might be a surprising addition to the list, but burying your team slide is a major misstep, especially when reaching out to investors for the first time. Here's why:
- Investors Back People: At the end of the day, VCs are investing in people just as much as they are in ideas. They want to understand who's behind the vision, their experience, and their ability to execute. Highlight your team's qualifications and achievements upfront.
- First Impressions Matter: Cold outreach to investors is all about grabbing their attention quickly. A team slide with clear bios and relevant experience makes for a strong first impression and entices them to delve deeper into your pitch.
- Building Trust and Relationships: Showcasing your team early creates a sense of trust and transparency. Investors want to see the faces behind the idea, and featuring your team upfront demonstrates confidence and authenticity.
Beyond the Myths: Building a Strong Pre-Seed Fundraising Strategy
Now that you've debunked these fundraising myths, how do you actually craft a winning pre-seed strategy?
Here are some actionable steps to consider:
- Know Your Audience: Research the VCs who invest in your specific space and tailor your pitch accordingly.
- Craft a Compelling Story: Your pitch deck should tell a clear story, highlighting the problem you solve, your target market, and your unique solution.
- Focus on Validation: Demonstrate early traction and market validation, even if it's through initial user feedback or customer acquisition.
- Practice Makes Perfect: Rehearse your pitch and get feedback from trusted advisors or fellow entrepreneurs.
Score My Deck: Your Fundraising Co-Pilot
The journey to securing pre-seed funding can be daunting, but you don't have to go it alone. Score My Deck empowers early-stage founders with the tools and insights they need to navigate the fundraising process with confidence. Our platform helps you:
- Craft a Winning Pitch Deck: Receive personalized feedback and VC level advice on your pitch deck content, structure and GTM Strategy.
- Identify Ideal Investors: Utilize our investor database to target the right investors for your startup.
- Practice and Perfect Your Pitch: Ask specific questions about areas of improvement and get expert coaching on the key concerns investors are likely to have.
By avoiding these outdated myths and adopting a strategic approach, you will significantly increase your chances of closing your pre-seed round.
Remember, you will get a lot of rejection. Be prepared for that, but don't let them discourage you.
Learn from each interaction and use the investor feedback to refine your pitch and strengthen your overall strategy.
With dedication, perseverance, and the right tools at your disposal, you can turn your innovative idea into a thriving business.
The Final Word: Embrace Authenticity and Focus on Value
Martin Casado's insights highlight a crucial theme: authenticity is key. Investors are looking to back passionate founders with a clear vision and the potential to innovate industries.
Don't get caught up in trying to be someone you're not. Focus on the value your startup brings to the table and the positive impact it can have on the world.
By avoiding bad advice, building a strong pre-seed strategy, and leveraging tools like Score My Deck, you can navigate the fundraising landscape with confidence and secure the resources needed to turn your startup dream into a reality.
Score My Deck: Your Fundraising Co-Pilot
Sign up for Score My Deck and gain access to a comprehensive suite of features designed to empower you on your fundraising journey. We offer:
- Discover Experienced Investors: Build a curated list of VCs who are actively investing in your industry.
- Actionable Pitch Deck Feedback: Receive data-driven insights and expert advice from seasoned entrepreneurs and investors.
- Practice Makes Perfect: Hone your pitching skills with mock investor meetings and feedback from industry professionals.
Don't let bad advice hold you back. Take control of your fundraising with Score My Deck and close your pre-seed round in style!