Fundraising
Core Principle
VCs don't invest in ideas. They invest in returns. Understand their math and you'll understand their decisions.
How VCs Actually Decide
Research shows VC evaluation priorities:
| Method | % of VCs Who Use It | Implication |
|---|---|---|
| Cash-on-cash multiple | 63% | "Will this return 10x my check?" |
| IRR (Internal Rate of Return) | 42% | "How fast does the money come back?" |
| DCF (Discounted Cash Flow) | 10% | Almost nobody uses this for early-stage |
What This Means for You
VCs think in portfolio math:
- Fund size: $100M
- Target return: 3x = $300M
- Typical portfolio: 20-30 companies
- Need 1-2 outliers returning 50-100x to make the fund work
Your job: Convince them you could be the outlier.
The 10-Slide Pitch Deck (Sequoia/YC Hybrid)
| Slide | Purpose | Time |
|---|---|---|
| 1. Title | Company name, one-line description, your name | 10 sec |
| 2. Problem | The pain — specific, urgent, and expensive | 60 sec |
| 3. Solution | Your approach — demo or clear visual | 90 sec |
| 4. Market | TAM/SAM/SOM with bottom-up sizing | 60 sec |
| 5. Traction | Revenue, users, growth rate — the evidence | 60 sec |
| 6. Business model | How you make money, unit economics | 60 sec |
| 7. Competition | Positioning map — not a feature matrix | 45 sec |
| 8. Team | Why this team wins — relevant unfair advantages | 45 sec |
| 9. Financials | 18-month projection, use of funds | 45 sec |
| 10. Ask | Amount, milestones this capital unlocks | 30 sec |
Slide-by-Slide Guidance
Problem slide: "X people spend Y hours/dollars doing Z because no one has built W."
- Quantify the pain. Abstract problems don't get funded.
Traction slide: Show trajectory, not just a number.
- "MRR: $5K → $15K → $40K over 3 months" beats "$40K MRR"
Market slide: Bottom-up, not top-down.
- BAD: "The global SaaS market is $200B"
- GOOD: "50K mid-market companies × $500/mo × 12 = $300M SAM"
Outreach Hierarchy
Effectiveness ranked by actual conversion data:
1. Warm intro from portfolio founder → 30-40% meeting rate
2. Warm intro from trusted VC → 20-30% meeting rate
3. Warm intro from mutual connection → 10-20% meeting rate
4. Cold email (well-researched) → 3-5% meeting rate
5. Cold LinkedIn message → 1-2% meeting rate
6. Cold application through website → <1% meeting rate
Warm Intro Request Template
To: [Mutual Connection]
Subject: Intro to [VC Name] at [Fund]?
Hi [Name],
Quick ask — would you be comfortable introducing me to [VC]?
We're raising a [seed/Series A] for [Company] — [one sentence description].
We have [key traction metric] and [VC Name] invests in
[relevant thesis match].
Happy to send a forwardable blurb if helpful. No pressure
if the timing doesn't feel right.
[Your name]
Forwardable Blurb
[Company] — [one-line description]
- [Key metric 1: revenue, users, or growth rate]
- [Key metric 2: retention, NPS, or notable customer]
- Raising [$X] to [specific milestone]
- [Relevant background of founding team]
Deck attached. Happy to meet anytime this week.
Fundraising Timeline
Week 1-2: Build target list (40-60 investors), research thesis fit
Week 2-3: Activate warm intros, send forwardable blurbs
Week 3-6: First meetings (aim for 15-20 in a compressed window)
Week 4-7: Partner meetings and deep dives
Week 6-8: Term sheets and negotiation
Week 8-10: Close and wire
Anti-Patterns
| Fundraising Theater | Real Fundraising |
|---|---|
| "Taking meetings with anyone interested" | Targeting 40 investors with thesis fit |
| Raising before having any traction | Having 3+ months of growth data |
| Leading with the product | Leading with the market opportunity |
| Sharing 30-slide decks | 10 slides max, every word earns its place |
| "We have no competition" | "Here's why we win against [specific alternatives]" |
| Sequential outreach over 6 months | Compressed 3-4 week sprint for FOMO |
Power Move
"Help me build a target investor list of 40 VCs for a [stage] raise in [sector]. For each, identify: thesis fit, check size, portfolio overlap, and the best warm intro path from my network. Then draft a forwardable blurb."
The agent becomes your fundraising strategist — mapping the shortest path from intro to term sheet.