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Today, we’re talking about why you shouldn’t exclusively focus on finding a lead investor when raising your seed round.

One of the most common mistakes I encounter with founders raising a seed, is they’ve only met with Seed Funds and Larger VCs. Then after 50 meetings, they have no term sheet, no other money raised and time is running out.

To avoid this, meet with all types of investors: Angels, Micro VCs, Seed Funds & Larger VCs. This improves your chances of success because you’re more likely to raise at least some money, even if you don’t find a lead, so you can keep the business going. Plus, the smaller checks that say yes will be able to introduce you to other investors, building your momentum and pressurizing any potential lead to make a quick decision.


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Today we’re talking about if it’s ok to start your company using freelance engineers? Of course many entrepreneurs do not code and may not have coders in their network, so hiring freelancers to build an MVP and then fundraise is a very common approach.

But does it work?

Well, if your product doesn’t require new and innovative engineering, and should not be that hard to build. Then it might be ok. It won’t be easy but you can make it happen.

However, if you are trying to build something new and unsolved, hiring freelancers will rarely work. As you likely need experts committed for the long term.

Also remember, rightly or wrongly, investors tend to favor teams with technical co-founders.


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Today, we’re talking about how to handle overwhelming investor interest.

Sometimes a small startup goes viral or gets mainstream press and then receives 100s of inbound requests saying something like. “Hi — I want to invest in your company”. If this happens, here’s how you filter down to the right investors for you.

1. Initial filter — reply with the terms you’d want on valuation, the document you’ll use, e.g. a SAFE, and your minimum check size, let’s say $25k. You should also ask them their location or the location of the entity they would invest out of. …


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Today, we’re talking about giving Angel investors pro rata rights. As a founder, in almost all cases, you should be willing to give this to your angel investors.

1. They’re not asking a lot. Asking for the right to maintain your existing percentage ownership, through buying higher priced shares, is a perfectly reasonable request from an investor.

2. For most founders, their angel investors believed and invested long before the big VCs got involved. So ot’s completely appropriate for you to reward that early risk taking. Those angels gave you the chance to make the VCs care.

3. It’s usually…


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Today, we’re talking about recruitment consultants and if you should use them?

For your 1st 10 employees? Absolutely not. The first 10 employees at a startup are the foundation of the company’s future. You need true believers. Unfortunately, the way recruitment consultants are paid, creates a bad incentive structure — for example 25% of the year 1 salary if the employee stays for 12 months. So the recruiters want the highest salary for a candidate — not long term equity and after the refund period is over, they can make a lot of money finding that employee another role.

Now…


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Today we’re talking about how startups find their first b2b customer. Here’s a quick overview of the most common channels.

The absolute best channel, by a mile, is getting warm introductions or asking people already in your network. Using existing trust is a great way to get a meeting with a potential customer.

If you’ve exhausted your networks, then some other good channels to try are: doing cold outreach where you ask the recipient for advice, this is one of my favorites. Conferences are also a great place to meet customers but obviously it’s tougher to find these during the…


Even with significant inbound interest, a startup acquisition has to beat long odds to succeed. Here are the most common mistakes to avoid during your acquisition process to give yourself the best chance of closing a deal.

Hoping for a Great Offer

Mistake: Startups fielding inbound interest tend to focus almost all of their attention on one offer they plan to immediately accept from their most desired potential buyer.

Why: This approach reduces buyer competition and thus your final offer price. It also removes any pressure on the buyer to make a decision. …


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Q&A from Pitch Practice in February 2021.

  1. How do you attract investors via email?
  2. Where do you put your 1 paragraph intro?
  3. What should you include in your pitch deck?

Participating teams: moyaero.com, daimlas.com, allosense.com & pugetbuoy.com


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Highlights from a Pitch Practice session we did back in February.
Key points:

  1. Make the problem’s cost clear
  2. Max 280 chars per slide
  3. Team early in the deck (at seed)
  4. Define your niche

Participating teams: moyaero.com, daimlas.com, allosense.com & pugetbuoy.com


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Today, we’re talking about the dangers of letting your inbox govern fundraising.

Just because an investor wants to meet with you, that doesn’t mean they’re the right investor for you, right now. For example, if you pitch at a demo day intending to raise a pre-seed round of $500k to $1M, you will still get a lot of meeting requests from large VC firms who usually write $5M+ checks.

You can take a few of those meetings but stay focused on getting meetings with investors most likely to say yes. I often meet founders who have done 50+ meetings but raised no money, the cause is usually being focused on the wrong type of investor for their stage.

Fundraising isn’t just about sheer volume of meetings, it’s about the right meetings at the right time.

Ash Rust

Pre-seed Investor. Email: ash@sterlingroad.com. B2B, US only. I work with founders for 3 months before investing. More info: http://SterlingRoad.com/process

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