Our fundraising learning post-YC
wasp-lang.dev
wasp-lang.dev
Are there any hacker/entrepreneur communities that focus on revenue-funded efforts instead of the self-perpetuating financing cycles?
The good news is that usually this time is not so impactful in the life of the startup. The founder will plan how much money they’ll need to execute the next ~2 years and will dedicate 2 entire months to fundraiser. After that, they’ll have 22 months of absolute focus and peace of mind to keep building product.
Although it looks like a waste of time from the distance, since it prevents you from building the product, in our case it was actually a very useful and formative experience, I'd dare to say even the most of all parts of YC. Being an OSS, developer and tech oriented startup with no revenue it made us very aware of that and forced us to learn about how we can get there. As the result, we solidified our vision and actually feel much more confident about it now than before the fundraising.
Would love to connect and collab on this!
The basic format of the follow-up was "Hey, you mentioned you'd follow-up in X days so I wanted to check if you are still interested in investing?". Then I would, if applicable, also add a line like e.g. "since we last spoke, we raised another $X from investor Y" or "we almost closed the part of the round dedicated to the angels and have only $X available".
I would send over a SAFE only if the investor agreed to invest and had completed the handshake protocol (https://www.ycombinator.com/handshake/).
I never did fundraising pre-Zoom/covid so can't compare, but the advantage here was the sheer volume of meetings we could do in a single day. I guess that in-person it would be easier to build rapport, but Zoom was definitely an advantage when playing the numbers game.
I assume that is because they understand there a lot of different reasons behind no's (bad timing, wrong stage, not excited about the area, ...) so it doesn't automatically mean something is fundamentally wrong with the company.
On the other hand, getting yes is definitely a big signal for others and makes them move much faster.
To me it all felt like a really fast game with a huge pile of deals on the table where everybody is just digging through and looking for something they like - no is here just a default answer and everybody has their own "filters" and premises they are going after.
This is why it really helped us when we focused really narrowly on finding investors who are a good fit for us, that was probably the biggest factor of all.
We actually never insisted on being called deep-tech, but we realised that was how others characterized us, especially when talking to investors (building a new programming language sounds pretty scary, although in our case it is a non turing complete DSL).
What I got out of it (which is known) is that founder+CEO is like politician. Most of your job is fundraising.
The next thing was hiring - in many ways similar to fundraising, a lot of lead generation, rejections and also very occupying.
I think and hope now will be a bit easier to get back to the product, but there are definitely things that from time to time completely consume you it seems.
We learned that innovating on the product is already challenging enough, and if we also innovate on the business model / adoption strategy etc it just sounds too risky. The best thing here is just to follow on somebody else's footsteps, which also makes it much easier (both for investors and ourselves) to imagine what the future will look like.