Ellecoin

what's harder bootstrapping or raising?

founder friends keep asking me what to look for in investors. i spent years as a vc, and even launched a fund backed by amazon and x (formerly twitter), here’s what i’ve learned to look for: – they can picture the world 10 years out and work back to what has to be true today
– they bet on you, not hype
– they care how a product feels, not just what it does
– they believe taste and brand are moats
– they decide fast
– they give you a fast no, not a slow maybe
– they don’t ask who else is in
– they stay through the hard parts, not just the up-and-to-the-right parts
– they tell you the truth, even when it’s uncomfortable
– they pick up the phone when it matters
– they’ve built something themselves, or sat close enough to know how hard it is
– they don’t try to run your co.
– they don’t back your competitor next quarter
– they open doors if they make you feel uncomfortable, you’ve got a good one. if they make you feel like a failure, you should have vetted better.

good rounds don't magically come to the deserving the right way to nail a pitch is to hand pick your own audience of VCs well before you actually kick off the round this is what the best founders do time and again. so let's talk about how to find that audience teapawt.net/harris/status/21176369…

Founders: what's one thing you wish investors just told you upfront? I've been on both sides of the table, so I'll answer as many as I can honestly. Drop it below 👇

Random observation from a founder relatively new to VC fundraising. I’ve only been through a Series A for one of my companies, and I’m preparing for a Series A for another. So I certainly don’t claim to be an expert on venture capital. But coming from a capital markets background, there’s something about the VC fundraising process that I find fascinating. In capital markets, if you want alpha, you do the homework. You research the market. You identify opportunities before others recognize them. You develop conviction, take a position, and hopefully capture the upside. The opportunity doesn’t come knocking on your door with a pitch deck asking you to invest. So why does venture capital sometimes seem to work in reverse? One of the most common pieces of fundraising advice I’ve received is that founders need to proactively reach out to VCs, build relationships, pitch their companies, and constantly follow up. Shouldn’t it be the other way around, too? I’m running two companies. I’ve completed one Series A and am preparing for another. I barely have time to fundraise, let alone chase VCs. Interestingly, the investors who impress me most are the persistent ones who do their homework, understand our business, and add value BEFORE getting an allocation. They’re often the ones who become our strongest supporters. If VCs only invest in founders who are good at fundraising, are they missing founders who are too busy building? Genuinely curious what founders and VCs think. I’m still learning this game.

Feels like 1) startup ideas 2) winners of those ideas are increasingly decided by venture capital. There are many teams building the same product or service however only a couple usually are "legible" to capital. Even customers themselves come from the portfolio of the same VCs and other customers usually ask if "you have raised VC and who did you raise it from and how much" Not to shade on the effort of the founders, it still takes a lot of hard work. However after some time in startups, you notice hat winning does not always have to be painful. Just sad that there are no "garage" startups anymore.

"we're better than them and they raised 3x what we struggle to raise" I dont buy it. teams set out to raise different amounts, and the goals, the ambition and how they think about valuation can just be different. but if you assume more money raised = the better, then the other team is just stronger. if they were below your level, theyd have raised another amount or not raise at all. so if I were you Id ask what they had that got them that round, and you dont. and if you say "it was the network they got from X" - someone might as well say the same about your round too when it's announced.

The fundraising market right now feels as polarised as I've seen it in a long time. It's becoming a story of extremes - either traction or vision. Arguably, this is what venture has always been for. The difference now is how fast the bar for each is rising. Every week brings new "fastest to $100m ARR" or another announcement of a collection of incredbily credentialed individuals raising a first round at a Bn+ valuation. We are living through a technology revolution that is opening the doors to both potential extreme scenarios. And as such, VC is crowding into these narratives. However, history of startups tells us that raising the largest round or having the swiftest fundraise often does not exclusively correlate with the ultimate most successful companies. There are going to be incredible founders building generational companies that do not satisfy this dynamic or the current venture zeitgeist. Such founders who can successfuly navigate this period of time may be the ones who benefit the most by building enduring companies.

VC and startups are basically The Hunger Games personified. Thousands of founders enter the arena. A handful get funded. Even fewer survive. The winners get more capital, better talent, stronger networks, and increasingly unfair advantages. The VCs are the sponsors, deciding who gets resources, who gets another chance, and who gets left behind. And the irony? Even the VCs are competing in their own Hunger Games, fighting for LP capital, access to the best founders, and the few exits that return entire funds. The founders compete to survive. The VCs compete to pick the survivors. The LPs bet on which VCs will pick correctly. And everyone is watching the same handful of winners.

don’t write off a founder for a failed startup. don’t give them extra credit for it either. ask what they’d refuse to repeat, even if their next investor pushed for it.

Imagine having a rough month at your startup & then having to write your investor update. Probably the last email you feel like sending. And when a founder sends it anyway, that says a lot.

One of the hardest parts of early-stage investing is backing a great founder the rest of the VC community doesn’t recognize yet.

The debate about whether founders should meet junior VCs is getting a little ridiculous. A good associate can become your strongest advocate inside a fund. They can also become a partner somewhere else in five years. Of course, founders should understand who's making the investment decisions and how the process works. But dismissing someone because they don't have GP in their title seems like a strange approach to an industry built on relationships. Today's junior VC might be tomorrow's lead investor.