Fundraising guide

I’ve had a few hundred conversations with VCs over the past few years to raise money for my startup and my nonprofit, as well as helping my friends raise money. I’ve compiled some thoughts I’ve found useful about fundraising below.

An investor is going to invest in a new start-up and a first-time entrepreneur only if they like the CEO and they like the story. Make your story shine.

The unfortunate truth is that your delivery matters even more than your content. Let your excitement about your idea shine through, but speak concisely. Bias towards giving less information than you want to, let people ask you questions about what they are interested in knowing.

This way they remain engaged instead of having their eyes glaze over as you go on a monologue. A dialogue is way more fun for both parties involved.

The structure of a pitch looks like: Problem is hard for audience, but it matters to them because of reason. We are solving this using a new approach, and this will lead to vision.

For example, TSMC’s foundry is a complicated process to describe. You could easily get caught up in the details. The trick is to convey why the tech matters. Everyone can relate to that, especially people trying to make money through investing in tech.

Here’s how you can pitch it: Shrinking transistors is brutally hard for companies making chips for GPUs and smartphones, but it’s what makes their products faster, cooler, and more power-efficient. We mass-produce chips at the very limits of physics so our customers can turn ambitious designs into reliable, high-volume silicon.

Then if someone asks “How do you do it?”, you would now have their permission to start talking about the tech. Asking for consent first goes a long way :)

Once you get comfortable talking about your company, you can start doing some verbal judo and guide them to ask you the questions you want to answer. The key here is to strategically withhold information.

“So that’s our plan for the next 3 months, and then we jump into phase 2 in our roadmap, where we significantly increase our margins. [Pause]”

“How are you planning to do that?”

“We will finetune cheaper model providers…”

Bingo, now you have a checkpoint where you know you had their attention until. You can talk about further details without monologuing, and also look like you’ve got answers to all their questions.

You will get some common questions from VCs, some of which aren’t that obvious to answer. Here are 25 I’ve compiled.

You don’t need a deck, but it’s generally a good exercise to make one since it helps you craft the story in your head. Here an old but good one.

I personally prefer making one pagers, but the idea is the same: concise relevant info that shows you’re going to win.