The challenges of raising

Founders, what's the single most challenging part of the raising process?

How do you manage that? (you don't have to answer this one)

Aim High or Go Home

"Aim High or Go Home"

I wrote an article on fundraising in the US for Vasily Alekseenko's Rare Founders newsletter.

I am speaking on the same subject at their event on the 30th.

So much better

Google won because, despite the fact they were nowhere near the first search engine, their product was so much better.

The customer need was well understood. I type some words, I get a list of relevant websites.

If you're not first, how do you plan to be so much better that you leave the competition for dead? A bit better won't cut it.

Discovery vs execution

"When I started my business, I spoke to everyone who tried to have a meeting with me. I needed to as it helped me learn so much during a short period" - Jimi Sotimehin.

When you are in discovery, take every meeting.

When you are in execution, guard your diary fiercely.

Overcrowded markets

The most common problem with a startup idea? Too many other companies doing something very similar.

It is difficult to win at scale if there are many people hitting the same problem.

If you are doing something different:
- is it enough for you to win?
- is it just a nice to have?
- is the reason your 'different' hasn't been done that the others saw a flaw in it?

You can win in a highly competitive market but the bar is that much higher.

Good and bad meetings

Founders, what meetings do you take that you think aren't the best use of your time?

What ones haven't you taken that you wish you had?

Self faith

Sometimes, I don't know but I'm going to figure it out is the best answer.

Your investors need to have faith that you can solve the problems that are coming.

So do you.

When they need you

Investors, be there when founders need you. Not when you want them to need you.

Not yet

Reasons not to transition from founder-led sales:

1. You didn't nail your sales playbook:

Sales hires are typically much better at executing on a playbook than developing one.

2. You don't have product market fit:

If you are selling, you can stay close to the customer, understand their needs, and where your product is and isn't meeting those. Once you transfer that, it is in the hands of someone with different incentives.

What else?

Charge more

If you've never lost a deal on price, you're not charging enough.

Hiring and investing

Hiring, like investing, is hard. You have to say no to almost everyone.

There's a right way and a wrong way to do this.

Feel the loss

Feel the loss... and let it drive you.

Make it a positive.

The urgency differential

Raising money is hard. Partly because there is often an urgency differential between raiser and raisee.

To the raiser, this is the most important thing in the world. To the raisee, it's on a long list.

Be polite, persistent and respectful, and remember the differential. If they don't reply with the urgency you would like, it's rarely personal.

You have to know what matters to you

There are one hundred reasons you can choose to pass on any investment.

I could write a compelling pass memo on any of the startups I have invested in, including the most successful.

You have to know what matters to you.

Politics: definition

politics /ˈpɒlɪtɪks/ noun

A game where everyone assumes they are right and anyone with opposing views is an idiot or bad person or both.

This is what I do

There is a subtle difference in tone that we instinctively understand when someone has confidence they will get there.

It applies to fundraising as much as anything else.

It's hard to put a finger on.

But it's something like "This is what I do" rather than "This is how I fit in your box".

Investing is a ranking game

Investing is a ranking game. Investors have to pick what they think the best five (for example) things they see this year are.

What does this mean for investors?

You have to see as many high quality opportunities as possible. You have to be good at ranking. You have to get picked by founders when the deal that ranks in your top five is competitive.

What does this mean for founders?

A pass doesn't mean you are not a good business. It means that specific investor doesn't think you are in the top five of the hundreds or thousands of startups they've seen this year.

It's not personal. It is a competition. If you win, someone else doesn't.

Democracy day

Today the US celebrates its Independence from British rule on the same day the UK election will likely see the largest majority in modern history.

This feels ironic but I can't find the hot take.

What's yours?

Guernsey Venture Challenge 2024

I will be a judge again for this year's Guernsey Venture Challenge.

We will be awarding £70k of grants.

The deadline is the 7th so, if you haven't applied yet, get a move on!

The risks of AI regulation

My article on the risks of AI regulation for Business Brief.

It inhibits innovation and gives countries with less regulation a competitive advantage.

Also be nervous when the main proponent of regulation is the largest player (hi OpenAI). Regulatory capture is real.