This Week in Startups - Fundraising | Scaling Your Startup S2 E4 with Density’s Andrew Farah and SoleSavy’s Dejan Pralica | E1210

Episode Date: May 6, 2021

Two startup CEOs share their approach to fundraising, Andrew Farah explains the strategy he used to raise $100M for Density (03:58), Dejan simplifies his community-forming principles for SoleSavy (38:27), and both give tactical lessons from the mistakes they made along the way (46:23)! Deck: https://bit.ly/3b8gz8g

Hey everybody, welcome to scaling your startup, season two, episode four. I think this might be my favorite special season because everybody is learning so much. So far, it's been incredible, where expert founders have given you insights on growth, social marketing, and sales. These are incredible building blocks, but you know what you always want to hear about. Nailing your fundraising, okay? Yeah, growth is great, J-Cal, social media marketing, copyrighting, sales, all critical. But show me the money. Money, secure the bag. Okay, I heard you. I got it. Maybe we should have done this as the first episode, but here it is. Two guests today from two very different stages, both of them are in my portfolio and both of them did a favor for their boy JCal and they crushed it. First, Density's CEO, Andrew Farrah, who has raised over a hundred million. I'm on the board of his company and he is in full on growth stage mode and he goes through what VCs are looking for in a pitch, including breaking down his most well-received pitch decks slide by slide. I was in the board meetings when he presented these and my head exploded.

I just saw Steve Jobs or Elon Musk on stage presenting when he presents. I mean, he's that good. Density sells a hardware as a service product that monitors how many people are in a space. They people count. It's super critically important for saving money on your real estate or in the age of COVID, making sure you don't have too many people in a room, or is that conference room actually necessary or would it be better if it was deployed as four phone boots? You have the idea. People counting. Super important. Density.io. I gave him a little plug there because he is sharing so much information here

that you should check out Density.I.O. And then, at a left field, Dion from Soul Savvy. He's the CEO. I saw this pitch and I stopped him three minutes in and I said I'm in. And I don't do that often. He just closed his seed round and he breaks down step by step his fundraising process and I have not seen a company scale revenue like this in a long time and I certainly haven't seen

evaluation go up this much in a long time if you haven't heard of soul savvy it's a paid community for sneakerheads you know the people who buy like 10, 20, 100 pairs of sneaker a year you have somebody in your life like that but he actually nailed community

and then commerce and got people to pay for it I've never seen anything like this It is a completely new business model, and he is defining the category. I kid you not. People are paying to be in a chat room to talk about something and get a little e-commerce on the margins. So check them out at Seoul Savvy, S-O-L-E, S-A-V-Y-com. And after the two presentations, my Emmy Award ring producer, Jackie, who is now a managing

director running my accelerator, been with me for seven years. You're the greatest, Jackie. We'll join both founders for a Q&A. She now runs this lunch accelerator, and she is one of the most qualified people to talk about fundraising since she has helped over 100 startups close. I kid you're not, nine figures in funding. So this is as good as it gets, folks. Enjoy. And dare I say, you're welcome.

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Schedule your free product tour right now at netsuite.com slash twist. So my name is Andrew Farrah. I'm co-founder and CEO of a company called Density. Over the past seven years, we have raised a little bit north of $100 million in a variety of rounds with some really awesome investors in trying to fundraise. the number of mistakes that I've made in running or not running a process is way too many to count. And so instead of sort of like showing a deck about like how to fundraise, I thought it would be helpful to just show a deck that we use when fundraising that's been sort of lightly redacted and talk about like how we think about structuring that, why we think about this process, why the process is important, and how you can sort of practically apply this to,

when you're raising capital. And I want to caveat this to any investor who's listening. The intention here is not to, I'm convinced that there are a number of great businesses that could have been built if they knew how to fundraise better. We only fundraise every 18 months. And investors are investing continuously. And so getting good at running a process and creating demand or sort of competitive interest is very much part of the job as a founder and CEO. And everything that I'm about to say about what to do in a process or how to think about a process or how to think about the psychology of an investor is not to manipulate investors. It's just simply to make sure that, you know, your last pitch is your best pitch. And so if you've only done your pitch seven times, your pitch is only going to be

as good as sort of the effort that's been put into that seven times. If you've done your pitch 50 times, it will be that good. And if you've done it 100 in preparation before you sit and talk to an investor, it is much more likely that your story will be super tight. So with that caveats, I guess I got started. So I got a really good piece of advice, which was always start with your people. I remember pretty much everything I've learned in fundraising has been some point in time where an investor or a friend or an advisor or another founder said, you're an idiot, Andrew. Don't do this, do this. So what they said was start with your people. And the reason they said start with your people is that it's essentially a credibility slide. You're essentially making the argument that if you have

excellent folks, then you've demonstrated an ability to recruit. And if you've demonstrated an ability to recruit, you can largely solve most problems within the realm of the space that you're working in. So we kind of start with, instead of a bunch of faces, we start with sort of experience in what they did as an approximation. And then we also talk about who we were backed by, which obviously if your earlier stage, you'll care less about kind of the backed by and more about who your folks are. After this slide, if you do this first, they will take everything else you say with whatever credibility you establish here. I'm a big fan of leading with product. I think, Jason, you also make this argument all the time. In fact, I think you were the one that taught me,

we were vying for a spot at launch festival. And Rob Grazioli, who's also on our board, one of my co-founders and I were presenting or pitching to the launch team. And Jason said, who in this room we finished? And he said, who in this room thinks that what density is doing is amazing? And like, every hand went up. And then he said, who in this room? understands what density, how density does it. And every hand went down. He was like, Andrew, where the hell is the product? You know, start with their products. So anyway, I strongly encourage you to start with your product. And I also strongly encourage you not to show envision links or static graphics like I'm showing you here, but to actually show moving stuff. So typically

this moves and it shows sort of count. We build a system that shows you how many humans are in a space. We essentially turn physical space into analytics by counting the humans in it. And we do that. with an entry-based system and an open-area-based that's radar-based and depth-based. But that's sort of irrelevant to fundraising. Start with product, otherwise, you're going to have to go back to and revisit what it is that you do. Also, how you make money, like what is your model, is really helpful. In our case, we sell our device, and we sell predominantly software, so the subscription that goes on top of that.

This is all typically moving. And again, I'm sorry that I'm showing you the static images, but this is sort of a slightly redacted version of our deck. So showing actual interface moving, there's a great thing you can do in Keynote where you can load in a dot move file, do that, and just show the application moving. It will speak volumes to where you are as a company. If you've only got screenshots, do screenshots, but you really shouldn't, when you're fundraising, you should really be building product before you're fundraising. One of the thing to bear in mind is that when you're when you're fundraising, you're not competing against your competitors. You're competing against everybody else who's fundraising at a similar stage.

And so your ability to think about running a process, a tight process, which I'm going to talk about at the end of this presentation and iterating on your deck continuously is going to have a profound impact on how polished you look when you're talking to an investor. Most founders will iterate on their deck and their narrative as they are meeting investors. I'm a big proponent of not meeting with investors when they ask to sit down with you, like at all. So I'm going to ask you to invest to, if they could take a meeting, do not meet with them. Say no. And instead, say right now we're not capital constrained and we'll let you know if we open a process or when we open a process. The reason you want to do that is because you want to meet with just founders for the first month

before you sit down with investors. Marketing budgets don't grow on trees. Right now, LinkedIn is going to give you a hundred dollar credit towards your first ad campaign on LinkedIn. This is very important because over 78% of B to B marketers rate. LinkedIn as the most effective social media platform for reaching objectives. Because there are over 62 million decision makers on LinkedIn, and they mean business. Of course, there's like well over 700 million members on LinkedIn, but decision makers are there too. So while they're on LinkedIn hiring management teams or updating their corporate profile pages,

which is super important these days, they're going to see your advertising. Imagine you're about to launch a marketing campaign. Everything is going according to plan, except for the thought in the back of your head. how do I ensure that the people I want to target will be in the mindset to receive my message. Context is critical. The answer is LinkedIn. When you market on LinkedIn,

you reach people who are ready to do business. They're in the right mindset. This is critical. They have tools for brand building and lead generation. You can target professionals down to their job title and the company name and location. You want CFOs. You want CTOs.

You know your product. And that's why LinkedIn is so special. Because you can target by GEO and title company sector, all that good stuff. You can engage folks you already know based on previous visits to your site or other outreach. So do business where business is done and get a hundy and $100 ad credit towards your first LinkedIn campaign, LinkedIn.com slash this week in startups. That's LinkedIn.com slash this week and startups for the hundy. Type those letters, get that hundy terms and conditions apply because they're giving you the hundy. So leading with product is really important.

This is how our sensors work. This is like what our sensors see. And it demonstrates, sort of the complexity of the problem that we have to solve and the simplicity of our solution by showing weird human behavior. The reason these things are helpful is that they really ground someone who's looking to write a check in who the hell you are and what the hell you do instead of in abstract concepts about Tam. You've noticed I've not talked about Tam. I've only talked about Tam. I've only talked about product. I've only talked about people. And that's because these are things that we think have like a material bearing on who we are and what the value is to a customer. typically show a bit more about machine learning. By the way, I have some of my own advice on what I might

improve here. If you have great numbers, lead with your numbers. There's another really good piece of advice. I had buried the numbers, and in fact, I think this might be a data deck. This became like our fourth slide, I think. The macro was COVID had hit, and it was accelerating the urgency and compressing sales cycles, and we had grown really materially month-per-month, or quarter over quarter. And it was because the pandemic had increased the urgency by which people had cared about how people were using space. Now, the one thing to bear in mind here is that while the pandemic was having that impact, we were already on track to grow by hundreds of percentage points, quarter over quarter. The thing that was really important is that it went further than that,

and our sales were not interrupted by the pandemic. And so this is as much about showing that you have sort of contextual awareness of like the market that you're in and what's going on and are doing objection handling ahead of when questions come up. Again, if you have good data, lead with the data. Our TCV to CAQ is really good and substantially larger than what sort of industry standard or best practices are. And so we just kind of show that. Here's what our payback period is. Here's when our customers pay. Here's our cost to acquire relative to the average deal size. The reason this is useful is you're raising capital to do something. So if you don't understand sort of like what you're going to do with that capital, it makes it substantially harder to

raise because you can't really justify where you're going to spend it. The reason you invest is because you're trying to put ideally fuel on a fire. Now, this changes depending on the stage. So earlier stage is more about on the team. Mid stage or late early stage is more about on early product. Midstage, it's more a bed on early traction. Call it mid to late stage. Before growth, it's on repeatable economics. So like you can actually do this. And that's where these numbers start to become really relevant, is how can you take my dollars and triple or quadruple? Again, if you have good numbers lead with numbers, like pipeline growth was really material and

it was really important that the pandemic, we raised $51 million series C in the middle of a pandemic. Our round was open for about nine days. That's the sound bite. And that's what everyone goes, you know, that's really cool. Like, that's a lot of money. And it's over a very short period of time. The reality is that preceding that nine days was 60 days of prep. It was dozens and dozens and dozens of meetings with founders to get feedback on this deck,

which is now a year and change old. It was repeatedly, I mean, it was hundreds of slides that got deleted. A really good piece of advice I once got was you should love every slide in your deck. And I mean, and by love, a good way to think about this is that if I go to, if I go to the next slide, am I like, oh yeah, I forgot to tell you, you know, we grew at a certain rate. year over year. Or, oh, I forgot to tell you that ARR is also growing, not just TCV. Oh, man, I forgot to show you this, like, really amazing net dollar retention number that we have. Now, we're a little bit, we're a later stage company. You don't need to have all of these metrics. Early stage,

you're looking at, call it 11 to 12 slides. You should love every single one of them. And if you don't, delete it. You know, you could put it in appendix if you'd like. You can throw it in like a, you know, sort of toss it in an area, an archive area if you'd like. But my general recommendation is that at the end of a process, you should truly love your deck, and you should have pitched it so many times that it's fun to tell the story. I also want to point out a couple things. So this is an example of barbell strategy, so a good way to think about your deck design. You want very high-dense slides like this one, where you're not going to read everything. It's just not possible to read everything. High-density slides, and then you want very sparse slides, and I'll give you an example of that.

Like this is an example of a very sparse slide. Now, the reason you want this barbell strategy and nothing in between, no bullets, like very few bullets, is because you never want to read your slide in a pitch. Instead, you want them to be prompts. So this accumulating advantage, accumulating advantage is a, is actually a term that Keith Rabeau uses quite a bit. It is the, I believe the technical term for a network effect. The more common term is network effect. But there's a variety of terminology, like in our case, we have bidirectional network effects where like one thing affects it positively and the other thing affects it positively. And talking about it as an accumulating advantage was something that we learned

in prep. So back in 2017, I was preparing for a Founders Fund meeting and I was doing a bunch of research on Founders Fund and I came across, he wasn't at Founders Fund at the time, I came across a Keith Rabeau interview where he talked about network effects and the definition of an accumulating advantage. And I, because he was at PayPal, I sort of assume that the language or the lingua franca or whatever the term is, sort of the native language would sort of carry over. And he talked about like accumulate, what are your accumulating advantages?

And so that became the name of the slide because I was on YouTube, just sort of listening to a podcast that, who knows, maybe it was on this week in startups, with Keith Rubeoi talking about what a network effect actually is and why it's important. The reason that's useful is you're essentially like, so YouTube is the best podcasting service in the world,

just pay for the YouTube premium system. and what you can do is just listen to the audio instead of watch the video with like your screen off, which you can't do with the free version of YouTube. And so it becomes this huge list of essentially audio-only files that you can listen to. And before you go into a meeting with an investor, and I'm going to talk about sort of the process in a second, I strongly encourage you to spend the couple days prior or the week prior just going on YouTube and searching their name. Listen to everything they've done. And what it will do is it will give you language to explain what you were already going to explain that they're familiar with. And that has a profound impact

on how it's received. So Founders Fund led around, I don't think it's necessarily because of this slide, but because we were able to sort of talk in holistic terms about things like, you know, we believe that we believe in that we are building sort of working in a small market, meaning a market that is growing really rapidly, but not one that is owned by an incumbent. The reason that's valuable when you're talking to Founders Fund is because Founders Fund believes in small markets and drawing concentric circles around ownership of a small market, such that you can become a more dominant force long term. You know, the DJI owns 71% of the drone market, even though it feels like there's lots of drone companies. How do they do that? So anyway,

use the language of the investors that you're speaking with. Let me just back up a little bit. Then we get to market. And again, this is barbell strategy. It's a dense slide. I really call out two things, which is, I don't know how many. We count people above points of entry and in open areas. and I don't know how many doors there are in the world, but there are a lot. And instead of trying to build a total addressable market by looking up some Gartner report, I strongly encourage Mark Andreessen has this great comment, which is like count your customer's noses. So count noses. It means go find your customers, your whatever customer segment, then go find the lookalikes

of those customers and count them. That's your tam. And that's a much better way of building a tam than going and saying, well, the IoT industry is going to grow by 23% according to, you know, whatever bullshit report you find. Instead, like, just do the work of counting how big that is. Now, we struggle with counting the number of points of entry in the world or the amount of square feet in the world. I know that real estate is $280 trillion. It's a $280 trillion asset class. But the point is that physical space is completely unmeasureed. So what I typically say here is

the crazy thing is that for thousands of years, we've been building buildings without knowing how they get used. The state of the art today is an architecture grad student with a clipboard, or an iPad wandering around physical space for five days a quarter. And noting down, that room is in use. That desk has not been touched or that bank of desks has not been touched in the last few days. That's how we've been building buildings. And, you know, what would happen if New York City all of a sudden knew how it was used? Would it design itself differently? And we think that the answer is objectively yes. So the question isn't a technology problem. The technology is a very important part of the problem. The real problem is a distribution problem. How do you get an intelligent device into

every relevant room in the world. And whoever solves that problem earns the right to remake it, earns the right to assist in its editing. And so the tam is the surface of the earth. It's all built physical structures. Now, that sounds stupid. That sounds like a Silicon Valleyism. You know, I live in San Francisco, but like, it's very easy to get wrapped up in the concept of like world changing stuff. If you believe it, however, and if you are really enthusiastic about why, and the logic is sound, It is impossible to argue with ambition. And so I would encourage you to be ambitious, but be genuine in it. In this case, these are the numbers.

There's a trillion dollars of space in offices alone that people have bought, used, leased, otherwise occupied, and are not using it all. Like, it's the desk that doesn't have anybody in it. It's the conference room that doesn't have anybody in it. And the reason that's useful is it clearly articulates. It's a very big problem, and it's a very large potential market, even if it's still nascent. I strongly encourage you to talk about competition, not as, competition, but as competing technologies or competing products. The reality is that you are competing

with more than your competitors. You're competing with doing nothing. You're competing with really good marketing. You're competing with incumbents that say they do something but don't. Saying that you don't compete is a non-answer. Saying that you compete and saying or that there are competing products and values and intense is a much more reasonable position to take. Strongly encourage a logo slide if you have great logos. You know, don't make them like all over the place. him a little bit of order. Use cases, make sure you make it really clear. I know I said no bullets, but like really you don't want to be reading bullets. So keep the bullets to a minimum. In this case, I don't talk about each of these, but I do talk about the use cases. And I also talk about how the

difference in the macro, pre-COVID and post-COVID. You have to remember, this is literally like March, April, May of last year. So COVID and the pandemic was a big part of essentially all fundraising. Today, it's maybe a little bit less so. But how is that affecting use cases and where people spend why they're spending their dollars. Strongly encourage big imagery if you have it. Full, full imagery. Again, this is sort of barbell strategy. The point that I make here is that, you know, our primary value is in the software that we built. It's not in the physical devices. Talk about actual growth from an actual customer. You know, customer stories speak volumes. So this was had to do with the growth of 154 floors, 67 buildings, nationwide deployment across

millions of square feet of space. And then sort of a concluding statement, I'm reasonably sure that there's not a future in which humans continue to build buildings or use buildings, but don't know how they're used. In this case, the pandemic has just accelerated the timeline. But the point is that there's this great quote, and I believe it's from the founder of Big Screen VR, I think. He essentially said, tweeted once that your job as a founder is to not die for long enough for the market to notice you. And I really love that because it's not saying, it makes clear that the point that time is such a huge, it's so important to whether or not you succeed or fail, that not dying is just as important as building a great product sometimes.

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And if it's all right, I'd like to maybe just talk a little bit about process for a minute. When you're fundraising, I typically encourage founders to imagine that you have about three months, that fundraising is going to take three months, that there are two fundraising windows. you can do it after January 2nd to July 4th, or you can do it from September 10th through to Thanksgiving. Those are really your only two windows.

Now, it's a little bit different today with predominantly Zoom conversations, but the important piece here is that folks disappear in August, tend to disappear in August. If you don't have tons of folks who are willing to sort of engage in the process or available to engage in the process, then it reduces your likelihood of a successful outcome. Fundraising is binary. Either happens or it doesn't. And so the best way to sort of create a structure and process to this is to run one. If your last pitch is your best pitch, what we'll typically do, or what I'll typically do is for 30 days, I will meet with 20 to 30 founders. These are founders who are one stage ahead of us or two stages ahead of us who have raised venture

capital. I'll sit down with them. I'll have a preliminary deck, like I just showed you, it'll be a really bad version of it, but just have anything. And I will pitch density to them and tell them about to open a fundraising process, but I haven't yet, and I'd really like feedback on what works and what doesn't. And these are trusted folks. They don't have a skin in the game. They just want to be helpful. You do as many of them as you possibly can. Like stack them. By the end of that process, two things will have happened.

One, well, three things will have happened. Your deck will have gotten materially better, like way better. Number two, you will have found founders who want to invest in you, certainly at the earlier stages. And if they don't invest in you, they will likely introduce you to their GPs, so the people that invested in them. if they're excited. Number three, you will be substantially tighter on your pitch. And those introductions that founders make to you sort of in the process, you want to schedule for month two. So anybody who asks if you want to if you want to talk about fundraising, if you're actively fundraising right now, or if you've had outreach from investors, don't take the meeting. Strongly encourage you not to take

the meeting. You are probably not. I am bad at fundraising right now because I haven't been practicing for the last 30 days. So use that first month to sort of prepare. second month, you schedule meetings. And the way that you want to think about scheduling meetings is I strongly encourage a screening week where you do 30-minute meetings. And those 30-minute meetings are with investors, anyone who's interested, anyone that you might have gotten intro to previously from the founders that you prepared with. The screening meeting should be about 30 minutes long. Half of it, you should grill them with questions. What's the size of your fund? Where are you in your fund cycle? Are you raising a new fund soon? How many investments have you made? How many boards do you sit on?

Are you a GP? How do you make decisions? Is there an investment committee? Do you have competing investments in a similar space? What's average check size? The reason you want to ask these questions is it's going to give you substantially more information as to what and how they invest. And more importantly, if you ask these questions and you show interest in that process, like do their LPs have material input in what they invest in? Do they have a particular thesis or mandate? If you ask those types of questions or even half of the ones I just mentioned, it will demonstrate a fluency in raising venture capital or in what they deal with on their side that demonstrates sort of the seriousness that you're taking this. You're not just talking about you. You're asking about them. You're looking for a

really great partner. I am not hard-lined about only talking to GPs or managing directors or, you know, not talking to associates. I would say associates are, can become your best friends, like truly the people that help make deals happen. However, GPs, general partners and managing directors are the folks that can push a deal through. You need and want a GPs. You need and want a GPs. sponsor. And so I strongly encourage in the event that you can to ask that a specific general partner join your screening meeting. And as many associates and principals as want to join. First 15 minutes, and I mean hard 15 minutes, are asking them questions and taking notes. The next 15 minutes and only 15 minutes, you open it up for questions. Say, what would you like to know about density? I'm happy to answer

anything that you want to know. And the really great investors will say, actually, I'm really curious about X. I did some research and I'm really sort of hung up on or I want to know about. The average investors will say, tell me where you were founded. You know, tell me about the beginnings, you know. The difference between those two things tends to be preparation. And the ones that are really prepared, those are the ones that are more likely to lean in later on. The ones that are just like, hey, just tell me about how you were founded. Take meetings like that all the time. And so your job is to sort of only spend 15 minutes answering questions. And the reason you only want to spend 15 minutes answering questions, and they can ask anything, like truly, give them the opportunity

to ask anything. Do not share your deck with them. Just talk or answer questions about density or whatever the company is. The reason you want to do that is because you can't, I don't know if you bleep this out, you probably can't fuck up 15 minutes, but you are much more likely to fuck up 30 minutes or an hour if they are your first conversations with investors. 15 minutes is very hard if you are, you know, really in the game and building a great business. The other thing that's useful is that it allows you to keep the time short so that you can focus on understanding them and whether or not you want to put them as a part of your process. Next week, the following week, I promise I'll wrap this process relatively soon, but these are some of the mistakes I've made the past. Your next week or your

next two weeks, you're now in month two, you've done your screening meetings, you've done, do as many of them as you want back to back, but keep them to 30 minutes and take notes on everybody. Your second week or your third week in that second month, you're going to have your first actual investor meetings, which you have scheduled the month prior. And the reason you want to do that is investors are not busy a month from now. They're busy next week and they're busy in two weeks and they're busy in three weeks, but they're not busy in four and six weeks. And that's because they're usually reserving time to sit down with founders and take meetings. So schedule it a month out, you will almost always get on their calendar, provided you get a warm introduction, which by the way

is really the only way that you want to generate introductions is warm introductions from founders that they've invested in. Those are the best possible intros. The next best possible intro is an introduction from your investor, your previous investors. And the reason, and I'm going to get back to the weeks in a second, but the reason that's important is because previous investors have something called an IRA or internal rate of return. That's how they mark up their investments. So let's say I raise a $100 million fund. And that $100 million fund, I invest in a whole bunch of companies and it's sort of all gone. Maybe I reserve some of it for follow on investing. But let's say I've I've allocated the vast majority of $100 million, and I need to raise my next fund. Well,

that $100 million I raised just two years ago. The goal is to return the fund. It is unlikely that I've seen material returns in that two years. So you use what's called an IRA, which is a markup for any of the investments that I made in that period on their post-money valuation for the next investor. Equity rounds, not convertible notes. And there's an important technical distinction there. By understanding what they're trying to do and what's important to them, you are much more likely to successfully fundraise. So let's get back to the weeks. Your second week, you have scheduled meetings with all of these other folks. You really don't want to do more than two a day. You get a morning slot and you got an afternoon slot. The reason for that is, and these are hour long meetings and you have asked or

encouraged them or they have asked you for a meeting where you actually are going to go through your pitch. Now, remember, you've done 20, 30 pitches by this point, 50 pitches by this point. You are super tight. You love every slide that's in your deck. You put in a lot of effort. You're in your second week. You're doing one in the morning and one in the afternoon. The reason you're doing it, no more than two, you can make exceptions to this if you have to. But no more than two is because you're going to forget what you told somebody if you do three. You're going to forget you already told the story. Your job is to tell the same story over and over again because it's a tight story. And then the small deviations that an investor asks questions of. The important part is that you really don't

feel like you're repeating yourself. So two a day is enough. Ideally, you got 10 slots. Monday through Friday. Your first four days, three to four days, should be warm up. You should be not putting your top most important investor or firm that you want to work with or important GP or whoever it might be in those first four days, three or four days. You want to put folks that are maybe lower down your list. You know, folks you don't know or folks that are really excited about you but you haven't gotten familiar with or maybe funds that you think that you might have a good you might work with, but you just, you haven't spent a lot of time with. And put your sort of number one, number two, number five later on. Pick your best investor,

the one that is your dream investor, the one that you know you want, because you did all this prep ahead of time, and you were listening to YouTube and you were trying to understand who these folks are on Friday, Friday afternoon. And your morning is again a warm up. Friday afternoon should be the best pitch you've ever done, because your last pitch is always your best pitch. And what that will do is it will allow you to give an early look to the one that you really want to work with. But you will be prepared enough to show up polished. What's happened in that first week and then you move on to your second week and your third week and those second and third weeks, you stack with the folks that you actually, you know, truly want to raise from,

but you just stack them to a day and you do them back to back. You do not run your business and fundraise. You fundraise or run your business. It is a full-time effort. I think when I was fundraising last time, I think I lost something like 17 pounds. And it was because I didn't drink, I went to bed early, I drank a lot of water. I was going to the gym. It was like a monk-like life for, for, you know, a period of time. We were in market for nine days, meaning when we opened conversations to term sheet, signed term sheet. And we were very fortunate to work with Kleiner Perkins, who was at the top of my list and a remarkable GP named Ilya Fushman, who's partnered with Mahmoon, who I think has been on this show. And it was because we put in

the work ahead of time, I think. Another really important note is like, the reason you're doing all of this is because you need them all to mature at the same time. If you do sequential meetings, they are going to mature in sequence, meaning you're going to have a bad meeting early. You're going to fast forward a month and a half. You're still going to be fundraising. You're going to be meeting with a friend of the person who passed on you a month and a half ago.

And they're going to say, hey, I'm looking at this company. You know anything about, oh, yeah, I've met with them. I met with them like, you know, I don't know, two months ago. Did you invest? No, no, it's too early for me. They don't really have the traction that they need. And it wasn't because you weren't a great company. It was because your narrative wasn't tight.

I mean, maybe it's because you weren't a great company, in which case, I can't help you. But if you've got a great company, there's no reason why you shouldn't be able to raise capital. Certainly not in this environment. It doesn't need to be, and it doesn't need to be frothy to raise capital. Some of the best companies in the world raised in economic downturns. So anyway, the point is, you need them all to mature at the same time and you need to be prepared. Because if you're not prepared, that first person is literally going to tank that meeting that you have. They're going to walk in a no. And it's because they've got a friend who passed a person. on you previously. Your job when you get a meeting is to get the next meeting. And you just

keep getting the next meeting until you have a term sheet. And once you have a term sheet, your job is to get a second term sheet so that you have some pricing leverage over the deal. And then, you know, I would say the reason that you budget three months and you work in those seasons is so that you can have time for close. So if it's 30 days for prep, it's 30 days for meetings, it's 30 days for diligence and clothes approximately. That is best case scenario, in my opinion. You're going to read all sorts of crazy tech crunch articles about, oh, like the Brex founders, we put together, we don't put any effort into our deck because that would demonstrate

that we're too focused on fundraising and we're not growing fast enough. I think the Brex founders are awesome. I think that's a bullshit argument for not putting in the effort. And I'm not Brex. We've not done what Brex has done in terms of growth. So I have to, I defer, you know, I don't have the credibility to say that. But if you put in the work and you do the prep, you don't have to sweat the test. You are substantially more likely to end up the partner that is excellent in the long term.

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It's time for you to get out of the mud. Get out of the quicksand and get yourself on a good foundation. NetSuite. That's how business is done. Okay. Let's get back to the program. Thanks, Jason. Today I'm going to talk about how to close your round by building community through

storytelling with your investors. I think this is a perfect follow up to Andrew's presentation. So I'm looking forward to dive in in. But first, a bit about myself and my company. I'm the CEO co-founder of Sol Savvy, which really in its simplest form, right now is a Slack community for people who have a common interest and passion for sneakers. To give some color on our last raise, our seed round was originally for $1 million, and then it became $1.5 million. And at the very end, we squeezed in a final check for half a million,

bringing our total to a $2 million party round. This included 33 different investors that make up my personal community. That raise start to finish took me 10 months to build and complete in the middle of a pandemic. fundraising is a journey. Like I said, for me, it took 10 months, and those announcements on TechCrunch are always a celebratory moment. But from an outsider's perspective, or for a first-time founder, those joyous moments can look a lot like something that is very linear, this very linear path. You decide to raise money, join an accelerator, you offer the races. It's easy, they say, it's fun, they say.

It's far from that. reality is this incredibly volatile experience for most founders. There are ups and downs that go along with it, and I don't say that from a revenue or business standpoint. I say this because fundraising done the wrong way takes you away from your business, and nothing is more important than your business, which is the start of my 20 rules for fundraising. Number one, we need to make it fun, and as fun as possible. It will take a toll on you mentally, so you need to operate through storytelling and community building. To do all that, you need to build the foundation of your community by telling a compelling

story. And fundraising is all about storytelling. Storytelling is what your brand and company stands for. The boring way to think about this is through your TAM and your moat. But let's stop using this as a key selling point for your company. It can be a bullet point on your deck, but focus on telling your story. But why do it like this? Why story tell?

The golden circle is the why, my number three rule. Do not sell your business on the how or the what, sell it on the why. This is the beginning of building your personal community. But let's break that down real quick. The three parts of the golden circle. The why. Why do you do what you do? What is your purpose?

How do you do what you do and what do you do? The how and the what are incredibly born. and seen all the time, and hard to connect to on a personal level. You need to make yourself stand out. My fourth rule. Tell your story and why your company and your vision matter. Investors see hundreds of decks, so why bore them with the same promises of hypotheticals, a massive TAM or projected revenue?

The why is much more interesting, my fifth rule. Take an example from Shopify President Harle. and this very simple tweet. Shopify is not a technology company. We are the entrepreneurship company. We enable people to achieve their own unique version of success. Could you imagine if Shopify's Pitch Deck and they're raising money today by selling the what and the how?

Shopify is an application programming interface platform and app that allows you to create an e-commerce website. Boring. It's very boring and easily forgettable. Talking about your why resonates and builds a connection with your community of investors. What's easily forgotten is Tam. What's not forgotten is a captivating why. Rule number six. This is a fundamental rule that you need to value.

Investors are your personal community. That is the mentality you should take into fundraising. There are people too and who you surround yourself with matters. Rule number seven. And to that point, whatever idea you have in your head right now around your ideal cap table, just throw it out and forget it because you're probably wrong. You don't know the world and you need time to explore it. Once you realize you're a building community and you throw out this perfect cap table you have in your head, rule number eight comes in and it's not about the money. You need

to get that out of your mind. Yes, you are here to fundraise capital for your business, but this cannot be the decision maker for who you work with. The money will only get you so far. Rule number nine, find the investors who can bring you and your company value. Every investor can write a check, but can they also bring you a value? Rule number 10, which leads to something very important to me is when something goes wrong and you need help, will that investor support you? Ask yourself that question when you are making decisions on who to cut or who to make room and squeeze into your round.

You need a support system through thick and thin, so do your own reference checks. And rule number 11, something you should never forget. VCs invest in the founder just as much as the business. This is why building your community matters and why money should not be the leading decision maker for you. Ask yourself, who do you want to surround yourself with because they're asking themselves the same question. And just as important, rule number 12, you need to inspire because fundraising can be a long process. You need to plant your seeds. Telling your why through storytelling is what's important because with time and investor updates that Y will inspire and resonate. It might not be a yes today,

but it could definitely be a yes tomorrow. And when you do get those nose, rule number 13, your investor updates are your best friend. Keep your nose. If they initially pass, ask them if they want to be put on a monthly investor update. I converted two of my biggest C checks from nose to a resounding and impactful yes over the course of five monthly investor updates. And just as important, when you are saying those investors, investor updates, rule number 14, don't blast all BCC to your warmest leads. Start every email with something distinct that will help you stand out and show that, you know, that email was written for just them and not a hundred other people. And the one way to do that is follow your potential

investors on social media or listen to them on YouTube. You can take those learnings such as something they might have tweeted and something they're talking about on Twitter and use that in your email to open up the conversation and show them that you're paying attention. Again, they're people just like us. And most importantly, fundraising is not a race. Have some patience. It will take time and your community will start with one and then go to two, three, four commitments.

But it will take time. As much as you nurture the growth of your business, you also need to nurture the growth of your VC community. And if you do get a no, read the room. Rule number 17. Tap into your network of knows. If there's an opportunity to ask them for an intro on their network, network, you should do it. My best intro came from a no, and don't be afraid to ask if there's a

fit for your company with someone else they might know. The worst that happens is you'll get another no or no response at all. Literally no harm in asking. And naturally, with patience and time, the right investors will find out about your why and your story, and it will open up your network to a fundraising path you never expected, and that will continue on through the trajectory of your company. And as your community grows, you need to build FOMO. FOMO is a combination of two things. Telling your story of why while also showing revenue growth and progress for your company. Those two things will naturally create FOMO as the round comes together and commitments begin to trickle in.

And finally, FOMO is your superpower. So be confident and use it. Use your why to power your community. Use your community to build the FOMO and use your FOMO to close your round. All right. Andrew and Dion, thank you so much. amazing. I have some follow-up questions for actually each of you and both of you. First, Andrew, I'll start with you. So that was just a masterclass of what's in a deck and your process.

Question that came up right away when you start with your people. So it's kind of a, what if your current team, what if you're really early stage for the founders out there? Maybe this is their first startup. And your current team really has nobody on it that's super impressive or just getting started. So when do you break that rule? What would you start with? advise. How would you advise them on that? I probably lead with product. The reality is in early stage. People are really investing in the individual. I have angel investments where, you know, the company is pivoted to a completely different product. And it does not phase or bother me at all. And that is the case with really early stage investing. It's because really the investment is

in, can these folks figure something out. Now, you can't do, you can't go too far afield, you know, just be like, well, I'm now going to get into, I don't know, oil and banking or something if you were in some type of technology startup. But the point is that starting with people is preferable. It's okay to talk about your particular experience and why you have a unique perspective on the bit on the market. Even if you didn't go to Stanford or something else, I didn't go to Stanford. I am a proud orange from Syracuse, New York. And then number two is like, if you don't feel comfortable going with people, just lead with product. What do you? building. Your process is so amazing. I've never heard anyone do this with the founders. You know,

say no to investors, build a community of founders. You both talked about communities. And could you just talk a little bit more about how you built that community? Being a founder, it can be very isolating. And it may be hard to find that community. And how do you find those other founders that could help you out? I think it was said really well in the previous presentation. Like one by one is how all networks are built. You know, they're just, they're not built by, I think that actually this is one of the reasons why Y Combinator is so popular or launch is so popular is like there's this assumption that as soon as you get in, you immediately get access to this community. The reality is that when you join launch, you then have to build, you know, one by one those relationships. And so I strongly

encourage meeting with other founders. You're going to learn a lot about the investors that you might work with, who not to work with, who's troublesome, who's fantastic. And surrounding yourself with a handful of operators is not terribly hard. If you are genuine, you are willing to put more into your network and be as helpful as you can without asking for anything in return, don't ask for introductions. It's a very important thing. Don't go in saying, hey, can you introduce me too? Just ask for advice. Hey, I'm trying to figure out how to understand this part of the business, or I'm not exactly sure how to build a product for X, or I'm trying to recruit Y. If you go in and you ask a bunch of founders for their opinions. Like, as evidenced I think by this presentation or

this particular conversation, we have a shitload of opinions. You know, it's like, do this and don't do that. And only like 20% of them will apply to you. But take the stuff that you like and apply it. And I would say, by not asking for introductions and not asking for money, you are more likely to get both. And Dan, let's go back to you a bit. So you talked about building community with investors. And I'm curious to what your process was in actually doing the deck and how you workshop that. You know, Andrew talked about bringing together founders. And how did you tackle that? Yeah. I mean, my my deck building was through the accelerator. So I had the privilege of your your mind and Jasons to help me morph it. But it was really something, it was very similar.

Obviously, at an earlier stage, we didn't have a world class team to tout in the first deck, but we did lead with product. And we went from their product to our business. How do we generate revenue? Why is this matter? I think if I could have done things a little bit differently, I would have included my why early on. But at the time, I think I was still figuring that out as we were growing as a company and I was growing as a founder. And everyone says it's a numbers game. So you know, you talked about it took you 10 months. So just if you don't mind sharing, just how many investors did it take. Yeah, probably 150 meetings on Zoom over 10 months. That's just like individual different people. A lot of emails, some cold, some warm, some introductions. But I met with a lot of people

and my fundraising happened, again, through a pandemic, strictly through Zoom. I have no idea what it's like to raise money. In person, I've not met any of my investors. I don't know what they look like or how they act in person. I've just met them on Zoom, which is obviously challenging. challenging, especially when you're when you're pitching, you don't get to be yourself. It's a lot harder to sell the confidence when you are, as I am, sitting in a chair right now and trying to portray that over a video call. So it can take a while. And like Andrew mentioned, my first two months of fundraising, I've probably sounded like an idiot in the first two months versus how I sounded in the last two months. We all do. I mean, we all do. It's just like what you do. It's a growth process, right? And I love that about the accelerator, you know, you guys set us up with Sequoia. At the very end, full well-knowing, it would be a waste of time anywhere but the very last day of the accelerator. And all that, it takes time. It takes work, it takes iteration. Tweeking my deck, I probably have 100 versions of it with different ways to talk through it. So it's constantly evolving. You have to be, you have to be able to take that

feedback from anyone and adjust and roll with it constantly. And fundraising is such a fluid process. One question that we get asked constantly is how do you, you talked about FOMO. I would actually love to hear this for both of you. How do you create FOMO at their early stage, you know, for early founders? So there's not really a lot going on. Like, how do you do that? I mean, you can't try to leverage FOMO when you have two commitments, right? You have to find, you have to build towards that where you can use it.

But at the same time, you have to show growth in the company. For us, it was we were at 30 CamerR. and by the end of the raise we were at 130, right? So that consistent growth and the confidence we had that we were going to grow the business, and I could say that like, hey, next time you talk to me, I will be at 100 camera. So obviously you have to build up to that,

and everyone's in different stages, but you have to find your place and you have to show growth. If you're not growing as a company, who wants to invest in that, so it's a process. How about you, Andrew? Do you have any tricks there from the early days?

I mean, the number, of founders, I mean, myself included, that, you know, it took 100 meetings or, you know, nine months or 10 months is, it's like so common to take that much time when you're first going out. And you can shortcut that by trying to run a really efficient process, in my opinion. And I don't know that this will work necessarily for everybody, but being disciplined about how you think about fundraising, where you don't take meetings. opportunistically, you take meetings on a plan, can have a really profound impact on how competitive a deal is. Because if they're not maturing at the same time, it's really hard to get folks

who are just getting to know your business and just getting to know your personality to be at closing stage where they're like, I really want to invest or I really want to participate in this round. Earlier stage, by the way, is like less about finding a lead and more about finding, you know, a syndicate of investors that want to participate in 10, 20, 25K increments. And frankly, that can come from founders. You know, so if you, you know, a great way to raise your first $500,000 is to go meet with a bunch of founders. Coincidentally, that's also the best way to prepare to fundraise.

So it's like, go meet with other founders. And a great way to reach out to them is short emails with no big anything, just super short email that is personalized, first name at whatever the company is for founders that are one or two stages beyond you. And just ask a question, like ask for advice. We will typically respond if it's a thoughtful question and if it's not sort of a general email blast and you haven't made an ask of can you introduce me to fill in lead investor acts and then do the same for others later on. You know, take those meetings when founders need help doing pitch prep. That's great. Yeah. And Dion, you actually recommend something similar to that when you're

reaching out to investors with the updates. So that's, you know, one way to kind of keep the FOMO is just send those updates, say you're going to hit certain goals and then hit them over time, right? Can you just share a few more best practices for writing those updates and what really should be included and maybe what not should be included? We often founders are wondering about very sensitive about giving away information, you know, how much should you be telling investors and about your metrics and everything? What's your feeling about that? Yeah, for me it was a very manual process. I kept a spreadsheet with people in tears and in different buckets that I felt I could communicate differently and share more

with some than others. So I had a master update, which was everything that if I wanted to share with someone, I would give them all of this. And then I scaled that back and sent that to people in different tiers. Do I feel like they're really warm? I'll be a little bit more open. Have I had better conversations with them? I'll be a little bit more open. Is it cold? I probably won't be sharing too much. But for me, always kind of the key things, just a quick reminder of who you are, because again, there's a lot of these emails flying around. My CEO report, which I kept pretty honest about where we're doing and how it's feeling about the process,

and then really kind of what our goals are and what our progress is. And then from there, you can add the different things, hires, challenges, asks, and so forth. But I do think there are long emails, they can be long emails, so you really need to keep it tight and focus. So lead with something that's going to keep them reading. And here's the question I would love both of you to answer. it's, and this is something that is really tough for founders,

is really hard to be fundraising and focusing on growth at the same time. Founders are always asking, you know, should we be focused on growth or focus on fundraising? And the answer is kind of yes. So, you know, what are some ways that you've been able to manage that, you know, just individually as a founder, as a person, and also with your team. Like, how do you negotiate all that?

So we'd love to hear your thoughts on that. I'll take it first. For me, it was forget that you have a 40-hour work day. you know, you need to make time. The business is the most important thing, but if the business isn't growing, fundraising is a lot harder to achieve. So for me, I blocked off time in the evenings, in the weekends, you know, when I knew my wife was asleep, when I'd have the downtime personally.

And I would focus on, let's call it my craft of pitching, of raising the deck, whatever it might be, so that during the day I could focus on the business where the rest of my team is working and that's what their focus is because ultimately you as the founder who is fundraising, no one else is living that world like you are. So you do need to make more time for it. It's not something you can shoot horn in a typical work week, in my opinion. I think Dion and I are sort of representative of how fundraising is binary. There isn't a way to raise capital. There is just do or do not, there is no try, you know? And in my opinion, I'm sort of on the other end of the spectrum, which is like I would strongly encourage to do one or the other as opposed to doing both at the same time.

But it actually doesn't really matter so long as you raise or can cover your costs with revenue. But doing both is a recipe for doing both poorly. There's this great study around texting and driving that essentially said, you know, if you have 100% attention and you try to do, you try to text and drive at the same time, then theoretically you're splitting your 100% attention 50-50. It turns out that in reality, what ends up happening is that you do both at like 15% capacity. So you're doing both worse as opposed to any one of them well. And what's to Deon's point, revenue growth and growth in your business equates to easier fundraising. So by not trying to do long fundraising cycles, you know, where you're doing it for a lot of months, it allows you to focus on the business and grow the business until you go out and fundraise.

And that sort of like back and forth can be really effective if you're doing it. make sure that you run a really efficient process. And in dealing with investors, how did you learn how to, how did you learn the art of negotiating with investors? Is that something that you picked up from somebody else? Or did you just learn that along the way? So one of the really important things that I didn't realize early on is the importance of the economy, of how the economics of venture work. So when you become a founder, one of the things that is really important to also be, or at least for venture-backed companies, and this is not

to say that venture-backed is better than bootstrapped. It's just, if you decide to do a venture-backed company, it's really important that you become a student of venture capital. The reality is they are investing in you to return the fund. So if I raise a billion-dollar fund and I write a $10 million check into a company, that is an option for me to potentially invest in in the future. Ten-million dollars on a billion dollar fund is extremely small on a percentage basis. So really, you're not going to get a lot of my time because I've got to return my fund, which means that $10 million investment, you've got to become, let's say I buy 10% of your business, you've got to become a $10 billion business on a $10 million investment in order to return my fund. And that's without dilution.

So the point is that if you understand that what they care about is returning the fund, it means that you can have conversations about how you might negotiate your deal. So it's like, hey, I know what's important to you in this case is that you're committing maybe one of 12 investments that you might do in the year to density or to whatever the company may be, my company. Here's how we return your fund. And when you do that, it allows you to have different conversations about valuation. Otherwise, you're just kind of negotiating with yourself.

You're just like, well, I don't know, I want this amount. you know, on my post money. That's the other thing. Know the difference between, and I'm not going to we don't need to explain it here, but know the difference between post money and pre-money valuation. Investors will always talk about post-money valuation, which means it is inclusive of their investment. I think I'm getting this right. It's inclusive of their investment. The reason that's important is if you are negotiating and you think it's before they invest the $10 million or $5 million or $3 million, your valuation is going to go down because you're negotiating pre-money and they're negotiating post-money. My point is, you can only know that if you've been through it and failed or if you've become a student to venture generally and you try to understand why they care and why they're investing and what the purpose is and how many investments they make, where they are in their fund cycle.

Those things are really important to understanding how you can negotiate for your own business. And the last thing I'll say is negotiate on getting a great partner. Don't negotiate on price. You are trying to get funded. It's binary. a million here or a million there will not matter in the long run. You are trying to get the best possible operators and investors to invest in your business. Because in doing so, it will lead to other spectacular operators and investors down the line as introductions in their network.

And what's that? Dan, I'll continue one second. What's an example of a great partner? What kind of value do they bring? So capital is the primary purpose of venture capital and raising capital. And I think a lot of people talk about value add, and the reality is the value add is the cash that they invest. The next value ad is, in my opinion, in the following order, number two, is an extension of your network. Your goal is to become once removed from the entire world. Ideally, that sounds like a ridiculous statement. But like, if you can become once removed from whoever it might be, the next customer or the next investor or the next recruit, it's substantially easier to achieve the things that you're trying to that are associated with your ambition.

So think of fundraising and the reason you want new partners raising putting capital into your business as opposed to insiders always investing in your business, which is a great thing. But the reason you want new money is because it extends your network. So that's number two. And then number three, so cash network. And then the third, try to find people who have run businesses before. You know, the best investors in the world are not all operators. but are often former operators.

And you're going to get, there's this great anecdote about a pilot, you know, expert pilots will have, you know, 10,000 hours behind a yoke or flying, you know, an aircraft. In an emergency, great pilots, particularly instructors,

will know what to ignore. You know, that sort of really complicated dash. They know what not to worry about. And the reason that's important is it's the same thing, with being an expert in anything else, is that if you have a problem in your business or you've got an opportunity in your business,

you may find that an operator is going to look at that and say, a former operator, and they're going to say, here are the things that don't actually matter. Feel free to not waste time on those things. These are probably the fundamental problems, and that can be immensely useful. But the primary purpose is cash.

Amazing. Dion, to add to that? Yeah, I was just going to echo the first point you made. The first book I read was Venture Deals. Be smarter than your lawyer. in venture capitalist. Can't recommend it enough. You do need to know the insides and outs of what's going on.

So you can use those to play chess. And without that, if you don't have the knowledge you're not armed with actually what's going on. Why is that money coming to you? You're not going to stand a chance with investors who are looking at the business. Amazing. And I'll just end on one more thing. Do either of you have a question for each other?

You know, it's interesting. we are in drastically different points of our fundraising cycles. So I feel like ahead of my A or my B, I will probably be sending Andrew an email after I've watched this YouTube. And we need to have a conversation with him. So for now, nothing. But I did learn that he is more than happy for a reach-out and to talk about his process.

I think I'm curious, when you, you think about sort of putting together a round or in your previous round, which it sounds like you did over the last, this past year, which is a crazy time to be raising capital, by the way. For the first time in my life. Yeah. Nice, nice job. How there was, was there an impact on your first or second commitment? Like, there was probably a tipping point where the round became sort of assured. Like, it was definitely going to happen. But prior to that tipping point, it was sort of like still unclear, like, are we going to get everything that we need to be able to make? this happen and sometimes that's a lead, sometimes that's just sort of a certain amount of dollars.

I'm curious when that tipping point happened and if there was a certain dollar amount or if it was like a particular name that sort of got convinced to participate. It was that it was the first couple commitments, right? Once I had my three and I was like, you know, we have a hundred thousand dollars of this million. I then had the leverage to go to the rest of the people who were in the maybes, we're thinking about it. Yeah, let me know when you're getting closer to closing to able to reach out and be like, hey, actually, if I scope everything out right now, definitely lied about this. If I, if I reach out to everyone now and everyone commits, we're not going to have room for you. Where do you stand? And I use that to push and I leveraged the FOMO.

I was somewhere in the middle there. I might have, you know, you got to fudge a little bit early on when you're, when you're piecing it together. But for me, once I hit the 250 mark, the rest was really easy. I could see the puzzles. I could see that community. I could see everyone I had reached out to and I could see how that would fit. And that came together perfectly, except for the point when more people wanted to participate. And then it turned to 1.5 and then ultimately two. So it was really this domino effect for me. Can I ask a couple other questions? If it's all right, I was curious if, I think you just touched on this, but did you become oversubscribed? Yeah. Yeah. So this is like a super common thing. It's like, it's like really hard to raise like

the first portion. But then like once the momentum builds, it's always oversubscribed. Yeah, absolutely. Yeah. And then you have to figure out, like, how you deal with valuation because you committed to a certain price with previous folks as opposed to now you want to take $1.5 or $2 million and it's like, do you bump up the valuation and like. Yeah, I looked at, I future projected who was joining the round and what that would mean for my A and made, now I know I made the right decisions. And I can't touch on it. I can't talk about it just yet. but I'm very cryptic.

I know. I looked at who was on the cab table, what that would mean going forward, who was investing in us, who believed in us. And when the time came to, to raise an A, how would I reach out and how would that happen? And that was the foundation of that community that I felt would allow me to have an easier time raising the second time around and hopefully the third time around and so forth. I have one last question. I was just curious, what, what is, is there anything that you do differently?

Oh, I just wipe out the first four months and start over and have all that long. It's just a learning process. Just like anything in life, you think you know who you are as a person when you're 20. And then you turn 25 and realize, wow, I was an idiot when I was 20. And then you turn 30 and you go, I didn't know shit when I was 25. I think it's just a part of the process. And I'm sure I will look back at this in two years and go, oh, yeah, I learned a ton and I did it all wrong. and hopefully people can learn from those mistakes and, you know, from listening to people like

us talk. And I've obviously already learned enough from you and the points that you made around the timing of things and try to keep it more tight. And that's definitely how I'll do my next round. There's this very interesting thing that I feel is like so true, which is if you don't feel like you were an idiot three months ago, then one of two things is happening. Either the company's not changing fast enough for you to need to change. or you're not changing fast enough with the company. In either case, you're probably fired. It only applies to the CEO, but I would just say,

or generally applies to the CEO, but I feel like what you just said makes a lot of sense, which is like, you know, you have to sort of be willing to, you know, continue to a lot. And what round are you on now? Or what's the last round you raised? Is it a C? It was a series C, yeah.

For how much, sorry, it was 50? It was a $51 million round, yeah. This is a great dynamic here, because you're very seasoned and have been through multiple, ringers and I've been through like one very long one. So there's, it's a process. Like I just, I just feel like there's a natural evolution of, of being an entrepreneur and a founder that you, I don't think you can shortcut that personally. Yeah. Yeah, I agree. I mean, my first, our first round,

it took me 10 months and like way too many meetings. I mean, it was like exactly like here in my history. I needed those reps. So you need those reps. But there's a, I feel like it can be better though. I really do. Like, I feel like it can be a little bit better, not as painful. In hindsight, yes. But again, when you're on the ground and you're learning and you don't have, you know, the world there to support you, it's tough. I agree.

But people don't talk about this. They talk about it in general terms, you know? Like, they don't often talk about the specifics of, you know, it's like you see these stupid headlines. I raised $66 million from a tier one investor in five days. and I took six meetings, you know? It's just like, that's not helpful. It's like Instagram photos, you know what I mean?

And then at the same time, on the other end, you get all this like really esoteric advice on like, I mean, Venture Deals is awesome, but it's dense. And it's like, there's as much legal jargon. You have to, you got to start somewhere. You got to build the base. You have to build your foundation, as unfun as it can be.

You got to make fun. Wow, that was amazing. Thank you so much. Andrew Farr of Density and Dionne Prolika of Soul Savvy for sharing your information. This is going to be absolute gold with founders. Okay, everyone,

thanks for tuning in. See you next time. Bye-bye.