Venture Capital Insights

I blew 20 VC meetings before I realized I didn’t need a perfect pitch; I needed to show investors how I'd make them money. Here’s how I did it by focusing on milestones 👇🏾 REGULAR PITCH: I thought my pitch was smooth: "Our product is in market and we’ve gotten 7 customers and $100K in ARR. We’re raising $750K to hire engineers to move off of no-code" Sounds solid, right? Nope. 20 meetings and 0 checks in, I realized I was making a big mistake. I was telling investors how I'd use their money, not how they'd make money. MILESTONE-FOCUSED PITCH: Once I understood venture math, everything changed. My new pitch: "We're at $100K ARR with seven customers, and our product is a no-code MVP. With $750K, we'll grow to $1M ARR in 15 months - which will allow us to raise our seed round at 2-3x our current valuation." WHY THIS WORKS: Pre-seed investors aren’t investing in today’s version of your company. They’re investing in what your company can become. They need to believe that in 12-18 months, you can raise another round at a 2-3x valuation. That means if you’re raising at a $6M valuation today, your job is to convince investors that you’ll be able to raise at (at least) a $12M valuation down the road. Why do you have to double your valuation? Because VCs need to show their LPs (limited partners; the people who give them money to invest) that they're picking good companies. Happy LPs = more money for the next fund. TAKEAWAY: When fundraising, your job as a founder isn't to show investors your great company. Your only job is to convince them you'll hit the milestones to raise your next round at a higher valuation. The other parts of your pitch (team, product, GTM, etc.) are just there to support the story. What’s your biggest challenge with fundraising? Drop a comment and I’ll try to help! Save and repost this to help a first-time founder 🤝🏾

The 8 Part Test Before Taking a VC Term Sheet: #1. Talk to as many founders they’ve invested in as you can. Do reference checks. You may hear 1 or 2 rough stories, bear that in mind. In fact, expect that. Don’t expect 100% support, at least not for folks at big funds that write big checks and serve on boards. But talk to as many as you can, at least a few. And listen. And ask how supportive they were vs. the others. You will hear advice from a lot of folks to talk to founders that failed, to see how the VCs supported them. I think that’s fine. But the flaw in that advice is that failures are messy. You get more value IMHO talking to founders that built something that got to some scale at least. #2. Ask how many investments they write second and third checks into. VCs that don’t write second checks are less valuable. Their financial contributions will be mostly over after the initial check. At least know the answer here. All things being equal, it’s better to take money from a VC that often writes second and third checks. You probably will need one. #3. See how pushy they are around control. If they insist on a board seat for < 10% ownership, that’s a flag. If they want control disproportionate to the cap table, that’s a flag. #4. Ask if they’ll still be there in 10 years, at the same fund. Just ask.  If you don’t get a clear answer, they may not be. It’s definitely a bummer if a VC doesn’t stay at the firm that invested in you. Ask. And realize that if they don’t run the place, and/or aren’t a “managing general partner” or something similar — there’s a decent chance they aren’t at the firm as long as you’re at the helm as CEO. #5. Ask what’s the toughest founder-VC experience they’ve been through, and what they learned from it. They are always frictions. See what they’ve learned from it. #6. Ask about some of their stories of bringing in outside CEOs to run their startups. See how it happened, and why, and how they think about it. Bringing in an outside CEO at the growth stage is a complex topic, with complex answers. Good to know how they think about it. Personally, I’ve never done it. I’m Team Founder or bust. #7. Ask what their worst investment was, and why. They know. Let them talk about it for a while. Don’t interrupt or stop them :). You’ll learn a lot. #8. Ask what CEO they’ve invested in that they respect the most. This is what they’ll be looking for from you.  If you don’t like what you hear, it may not be a great fit. If you have options.

Many VCs avoid general events with early-stage founders. I used to wonder why- now I get it. It’s exhausting to meet person after person who wants something you can’t give. Not because you don’t want to help, but because you can’t meaningfully move the needle for them yet. It’s easier to spend time with peers, where expectations are clearer, and value can flow both ways. The deeper I get into this work, the more I understand how VCs operate- not out of coldness, but practicality. Here’s the truth: Many founders want to raise venture capital. Few will. That’s not a reflection of how “good” a founder is, it’s about market fit with how venture works as a business. Raising venture means: • You’re building in a billion-dollar market. • Your team can deliver on both product and distribution. • You have a repeatable revenue model. • Customers are actively pulling the product from you. To raise pre-product or pre-revenue, one of these usually has to be true: • You previously built and sold something. • Your team has a proven track record in product or go-to-market. • You’ve demonstrated exceptional demand, even without revenue. Introducing founders to venture too early can be harmful. • Once a VC passes, they rarely change their mind. A premature intro can burn a future opportunity. • I only have so many introductions I can make. If I send a founder who isn’t ready, it undermines my credibility and reduces the chances I can help others. • Rejection without context can be deeply discouraging. Especially when a founder isn’t yet equipped to decode the “why.” This isn’t about gatekeeping. It’s about protecting a founder’s momentum and ensuring the doors they walk through are actually open. I want to support all founders. But I can’t give everyone what they want-especially capital introductions- if they’re not ready for venture, yet. That doesn’t mean I don’t care. It means I want to be useful. I’ll always make space for education, support, and, above all, honesty. I’m trying to do the most good I can, with the limited leverage I have.

VC firms pitch many ways they can help and add value to Founders/CEOs and their companies. Realistically, most firms don’t move the needle other than capital. Good firms truly help in one area, great investors help in two and the best can do three max. I've worked with 25+ investors and pitched hundreds more. Below are common value-add areas they offer, which you'll likely need at some point: - Recruiting executives - VC firms often promise executive recruiting help, leveraging their network and experience. Some firms have dedicated people for this, most simply introduce you to an executive recruiting firm. - Introductions to your target customer - VCs often promise introductions to potential customers. Some actively reach out to prospects one on one to warm up and qualify leads, most just forward an email you send them. - CEO community - Some do an amazing job creating channels/events to get CEOs sharing and helping each other, most have inactive Slack groups (because the CEOs are in 4 of them) - Relationship with a big partner - This is usually a claim from a venture arm of a big company. Some help you navigate their org and find the right group that can change your trajectory, most just want information on companies/spaces they may want to compete in. - Operating partners - There are firms with operating partners that can help you up level a specific function (HR, Marketing, Sales, etc) but most have too many portfolio companies to support and their expertise isn’t relevant/deep enough to really help. - Fund that can make future rounds easy - Multi stage funds pitch that they can invest at each stage as you grow. Having a deep pocketed investor supporting you is powerful but most will force you to go out and find a new lead investor each round unless you’re obviously the next unicorn. - Benchmark data - There are a handful of firms that invest heavily in their data collection and analysis capabilities. If their portfolio is big enough and they’re willing to share non-public context behind the data, it’s very helpful. Most do an ok report for a couple of years and then stop. - Connections in your city - The funds that are focused on specific geographies/cities can help you network, navigate, build a presence in that area. Most aren’t investing enough time to build a community that they have real influence over. - Access to other geographies - Some funds have a partner or an LP in a specific country who will open all the doors when you want to start doing business there. Most will just meet with you and share some high level things about the market. (I’m sure I’m missing some, feel free to add anything I’ve missed in the comments)   Before moving forward with an investor, you should prioritize your current needs, validate their claims through back channel references, and discuss 1-2 initiatives you’ll execute with them post investment (if you want to be bold you can ask them to demonstrate their value pre investment).

VC 101 - Day 7  Post-Investment Interactions: The After Party You did it. Your startup's pitch won over a venture capitalist, and the check with all those zeros just hit your account. The bubbly was uncorked, and for a brief moment, you felt like the king or queen of the entrepreneurial world. The temptation might be to think that you've crossed the finish line, but in reality, the journey has only just begun. How Often Do They Check In? Surprise, surprise! Venture capitalists are much more engaged than you might have initially thought. Around 60% of VCs check in with their portfolio companies at least weekly. You might feel like they’re hovering, but their involvement is generally constructive, unlike that of a clingy ex. What Do They Offer? Strategic Guidance Lost in the maze of scaling, or unsure about entering a new market? Your VC is your go-to sage, a corporate Yoda, guiding you with the wisdom gleaned from years of industry experience. Connections The Rolodex of a VC often reads like a Who's Who of the business world. These connections can provide introductions to potential clients, partnerships, or even future rounds of financing, unlocking opportunities you never thought possible. Operational Advice From fine-tuning your supply chain to navigating HR complexities, your VC is often a fount of practical advice. They’ve been through this rodeo before and can help you avoid common pitfalls. Hiring Assembling the right team can make or break your startup. Whether it's board members or critical managerial positions, your VC's network can be a treasure trove of talent. Takeaway: Think of VCs not as faceless, open wallets but as active, hands-on partners in your journey. The post-investment phase is not a solitary one; it’s a collaborative endeavor. The counsel, connections, and experience a VC provides can often be as invaluable as the capital they initially invested. The venture capital game isn't just about securing that big check; it’s about cultivating a long-term partnership filled with strategic advice, networking opportunities, and operational insights. The relationship you build with your VC after the initial investment could very well be the cornerstone that guides you toward entrepreneurial success. Stay tuned for Day 8! Source: Harvard Business Review ➕ Follow me (Grace Gong) and hit the bell 🔔 icon on my profile to be notified of everything VC

Most founders don’t understand venture capital. They think it’s fuel. They think it’s validation. They think raising money means they’ve made it. The second you take investment, everything changes. “More money means more growth.” More money means more pressure. More spending. More bad decisions. Growth comes from product/market fit and distribution, not the size of your bank account. “If you don’t raise, you’ll lose to competitors who do.” No. You’ll lose if you don’t build something valuable. Money does not create great businesses. Execution does. “Raising money is a milestone.” No. It’s a debt. The moment you raise, the clock starts. You don’t own your company anymore. You are now a vehicle for someone else’s return. “VCs are partners.” They are fund managers. Their real customers are their limited partners, the pension funds, endowments, and institutions that gave them money to multiply. If you stop looking like a big enough return, you are just a problem they need to solve. “A great pitch deck gets you funded.” Venture capitalists don’t fund decks. They fund momentum. If you need a deck to sell the story, you don’t have a story. “Valuation is everything.” Only if you never plan to make a profit. A high valuation is a contract to exit at an even higher one. If you don’t get there, you get nothing. “Raising lets you go big.” It also removes your ability to go small. Venture money locks you into one path. Explosive growth or death. Most businesses don’t need to live or die by that model. “You should raise when you don’t need it.” That is how you get trapped. The minute you raise, you stop optimizing for sustainability. You optimize for the next round. You are now playing a different game. “You can always raise more.” Until you can’t. Until the market shifts. Until your growth slows. Until you realize too late that your business should have been profitable instead of venture-backed. “Venture investors believe in your vision.” They believe in returns. If your company stops looking like a billion-dollar outcome, they will push you aside to salvage what they can. “A good venture firm makes all the difference.” Only if your fundamentals are strong. A bad firm will wreck your cap table, push you out as CEO, and kill your company before it ever gets the chance to succeed. “You can always exit early.” Not if you raised too much. A $50 million exit sounds great, unless your investors need a $500 million one. Suddenly, the deal that could have changed your life is off the table. “Venture capital is the only way to scale.” The best businesses are self-sustaining. They make money, reinvest, and grow on their own terms. The second you take outside money, those terms are no longer yours. Most founders celebrate when they raise. They should be asking if they just signed away the best version of their company. Because once you take that first check, there is no undo button.

Founders: before you pitch a VC, make them pitch you. The best founders I’ve worked with never just take the meeting. They ask sharp questions — because they expect capital. They’re deciding who earns a spot on the cap table. Here are 5 questions I’d ask before pitching any fund — and what their answers actually mean: 1️⃣ “What’s your value add — beyond capital?” This flips the script. Great founders want more than a check — they want leverage. Ask for specifics: → What intros have they made this month? → Who actually supports the portfolio — and how often? → Can they name a founder they actually helped post-investment? 2️⃣ “What does your diligence process look like?” Founders waste weeks chasing ghost processes. Don’t. Make them lay it out: → How many calls? → What docs do they expect? → Who gives final sign-off? Once they commit to a process — hold them to it. 3️⃣ “How many new deals are you targeting this quarter?” This tells you if they’re actually investing or just “taking meetings.” If the number is 1 or 2, and your round isn’t urgent for them… That’s a signal. (Especially if you're early and they’re deploying late in the fund.) 4️⃣ “How do you usually work with founders post-check?” You want alignment — not surprises. → Do they do monthly calls? → Are they active on hiring, GTM, or board management? → Or are they just a name in the investor update? Neither is wrong. But you deserve to know. 5️⃣ “How do decisions get made at your fund?” You’re mapping power — not just enthusiasm. If they say “I love this” but can’t bring it through IC without another partner on board, that’s key context. Bottom line: Fundraising isn’t just about pitching well. It’s about qualifying your partners. Ask better questions. Get better investors. #VentureCapital #VC #Startups

They got rejected by 30 VCs. 90 days later, they closed their first lead investor. Same team. Same product. Different story. When they came to me, they were exhausted. Burned by a string of VC rejections and stuck in a cycle of pitch → silence → ghosted. What changed? Not their deck. Not their market. But the way they told their story and the clarity of their ask. Here’s what we fixed: ➟ No more “here’s what we built”. We began with, “Here’s the problem.” ➟ Reframed traction to speak investor language (not vanity metrics) ➟ Built a narrative around momentum, not desperation ➟ Positioned the raise as a growth opportunity, not a lifeline ✅ Clarity of the market ✅Proof of demand ✅Founder conviction ✅A crisp use of funds ✅Evidence of velocity ✅Competitive insight ✅Realistic milestones ✅Aligned ask ✅Simple deck ✅Compelling close 10 lessons that helped them go from ignored to in-demand: 1. Investors fund momentum ↳ Rebuild your story around traction and timing 2. Data is the language of belief ↳ Make every claim measurable and credible 3. The first 10 seconds decide the next 10 minutes ↳ Lead with insight, not your origin story 4. Fundraising is sales with a longer sales cycle ↳ Qualify, follow up, close like B2B 5. A vague raise is a red flag ↳ “$1.5M to do what, exactly?” — Answer it before they ask 6. Pressure kills the pitch ↳ Invite the right fit, not approval from everyone 7. Lead with the problem, not the product ↳ Show you get the pain better than anyone 8. Make it easy to say yes ↳ Fewer slides, clearer ask, sharper logic 9. Own your unfair advantage ↳ Don’t whisper the thing that sets you apart 10. One believer opens the door ↳ The first “yes” is the hardest, then the narrative flips Rejection is feedback, but only if you listen, adapt, and level up. VCs said no. Now they’re getting intros from those same firms. What’s the biggest lesson you’ve learned from rejection? Comment! Repost! ------------------------------------------------------ 💯 Want to qualify for VC funding?   Take your free Fundraising Gap Analysis Scorecard. The link is on my profile page - Leon Eisen, PhD

The rise of "Operator VC" is shaking up the venture capital world, and founders are reaping the benefits. 🚀 Operators—those who’ve been in the trenches building companies themselves—are moving into VC roles, and they’re bringing more than just capital to the table. Here’s why they’re making waves in the industry: - Strategic Insight: Operator VCs provide tactical advice that goes beyond the money. They’ve scaled businesses, so they know how to navigate the ups and downs. - Founder Empathy: They’ve lived through the grind. From sleepless nights to pivots, Operator VCs understand what it takes to build from the ground up. - Network Power: With vast networks from their operational days, they open doors to talent, partnerships, and even follow-on capital. - Long-Term Focus: Unlike traditional VCs who may be laser-focused on quick returns, Operator VCs understand the importance of playing the long game. This new wave of VC is helping bridge the gap between investors and founders, making venture capital more supportive and strategic. If you're a founder raising a round, consider what an Operator VC can bring to the table—beyond just a check. #venturecapital #startups #entrepreneurship #VC ____ Enjoy this? Follow Elana Gold for venture capital, angel investing, and startup insights

Venture capital is bleeding cash. If you’re building a startup, this changes everything. In 2023, U.S. venture firms invested $60 billion more than they returned. Their worst performance in over a decade. IPOs and acquisitions have dried up, and even AI’s meteoric rise isn’t delivering exits. For startups, this isn’t just a funding slowdown. It’s a shift in the rules of the game. Here are 3 lessons every founder needs to learn now: 1️⃣ Profitability isn’t optional anymore. It’s urgent now. VCs are no longer betting on dreams. With their own returns shrinking, they need startups that generate real cash, fast. This doesn’t just mean showing revenue potential. It means proving it with traction. The startups that will survive this downturn are the ones with numbers they can show today, not promises for tomorrow. 2️⃣ Tougher deals are here. And founders will feel the squeeze. Funding isn’t drying up, but it’s coming at a cost. VCs, under pressure to deliver returns, will drive harder bargains. That means smaller valuations, more aggressive dilution, and stricter milestones. If you’re negotiating, understand that capital isn’t cheap anymore. Your ability to show clear ROI is your leverage. 3️⃣ Exits are no longer optional. They’re the metric VCs care about most. In a market with few IPOs and acquisitions, VCs are laser-focused on how you’ll deliver their payday. It’s not enough to build a great product—you need to map out a clear, compelling story for who will acquire your startup or why it will thrive as a public company. Start thinking: How does this roadmap lead to liquidity for your investors? You don’t need more capital. You need clarity. Focus on what matters: building a product that solves a real problem, creating systems that generate revenue, and planning your future exit. The game isn’t about how much you raise. It’s about how little you need. Play the long game. Build better. Win bigger.