This is the final post in a series of three where I have shared with you myths and truths from my own experience of VC fundraising. Understanding the truth about VC fundraising is crucial if you want to secure it. The final 6 myths are:
Myth 11: With this month’s result it will be easy to raise.
Truth: VCs are looking for trends, not outliers. A startup that is demonstrating reliable progress over time will give VCs more confidence to invest than one with lumpy and inconsistent sales. No matter how good any individual period is.
Myth 12: Series A is the hardest raise.
Truth: Series B funding is typically harder. In Series A you need to show a strong likely PMF. Whereas, in Series B you need to show the PMF more definitely as well as the ability to achieve scalable execution with real results. During Series B everything is still at a teething stage, but you are starting to scale which compounds any small challenges into something larger.
Myth 13: VCs have a really easy and chilled job.
Truth: VCs have a very difficult and draining job. They spend large amounts of their time listening to pitches from founders such as yourself and will likely say no to most of them. Finding successful businesses amongst all the noise can be extremely challenging. And then they have a day job...
Myth 14: Fundraising is mainly about logical decision making.
Truth: Fundraising is not just logical. All VCs will be looking at logic, credibility and emotional connection when making investment decisions. Without all three of these, it is unlikely that you will secure investment from that VC.
Myth 15: It’s about pitch first and people second.
Truth: Founders need to be able to form relationships. The best way to demonstrate this is to form friendships with your investors. VCs won’t invest in people they don’t like. This is why it is always people first and pitch second.
Myth 16: You are special and your business will be a unicorn.
Truth: You ain’t that special unless you have already done it. Unless you have already achieved a billion-dollar exit in the industry, don’t assume you are that special.
By understanding the truth of these 6 myths you will be better prepared to engage fully in the VC fundraising process.