How a VC Picks Founders to Back

Understanding what investors seek can help founders prepare for raising a seed round.

Break the process into long term, short term and midterm... What is the long term vision for the company?... Pre-seed seed stage investors usually look for that vision.

• Articulate a compelling long-term vision.
• Show commitment to achieving that vision.
• Discuss short-term execution plans.

Targeting the right investors can streamline the fundraising process for founders.

There's a strategy founders can follow... The first step is go and find 4 or 5 startups in your zone... Now, you look at these 5 companies... So now you've made a list of 10 to 20 investors. That's it. That's your golden list.

• Research similar startups to find active investors.
• Create a focused list of potential VCs.
• Avoid approaching investors of direct competitors.

Founders often wonder whether experience or fresh perspective is more valued by investors.

First-time founders are awesome... Repeat founders have a special hunger... The filter I use is very high business acumen.

• Investors may be agnostic between first-time and repeat founders.
• Both bring valuable qualities.
• High business acumen is key to attracting investment.

Impressing investors early on can be crucial for securing funding.

In my conversations with founders... I look for, can I be a student and learn? If I ask a question, am I going to be given this thesis that I hadn't even thought of and opened my eyes to a new way of looking at the world.

• Demonstrate deep domain expertise.
• Provide insights that educate investors.
• Show thorough research and thoughtfulness.

Founders need a practical approach to manage overwhelming tasks in early-stage startups.

I started thinking in ones or zeros, like something is either a 1... exceptionally important, or it's a zero, like, I am ignoring it completely... that was a better framework for how to deal with just the amount of things you have to do.

• Use a binary prioritization: focus or ignore.
• Attend only to tasks that are critical.
• Manage workload effectively by simplifying decisions.

In the chaotic environment of startups, prioritization is critical for success.

By definition, startups are chaotic... The master of this game needs to know which balls to keep up in the air and which balls to drop. That ruthless prioritization matters a lot.

• Focus on key tasks that drive success.
• Understand which tasks to deprioritize.
• Effective prioritization impacts overall success.

The capacity to learn rapidly is a crucial trait for successful founders.

He blows my mind away every time I talk to him... Six weeks later, I come back and talk to him. He has mastered something because he's unlocked a whole new set of things that wasn't accessible to him previously.

• Rapid learning unlocks new opportunities.
• Adapting quickly helps meet challenges.
• Investors value continuous learning in founders.

Investors often seek specific qualities in founders that go beyond experience or education.

The filter I use is very high business acumen. Whether they're 22-year-old or 55-year-old doesn't matter... Just because you went to business school doesn't make you a better business person.

• High business acumen is valued over formal education.
• Age or prior experience is less important than business sense.
• Strong entrepreneurial spirit can attract investors.

Founders often wonder if prior relationships with VCs are necessary to secure investment.

We cannot only choose to work with people who we've known for many years... We have to. We are forced to get out and go make new friends... I meet a founder and a couple of meetings later it's really exciting. Let's go.

• VCs are open to investing in founders they just met.
• Success depends on connecting with new people.
• Building relationships quickly can lead to investments.

Building strong relationships with VCs at the pre-seed stage can offer founders valuable support and deep engagement in their startup journey.

I really wanted to form meaningful relationships with founders... it's more about texting at 10 p.m. 'Hey... we signed the contract.'... Those are really fun conversations.

• Early-stage VCs provide personal support during critical moments.
• Building relationships early leads to long-term partnerships.
• VCs at pre-seed engage deeply, helping founders unleash potential.