Timing VC Processes

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Today we’re talking about timing when fundraising from VCs. When a larger VC ($2m+ checks) — when they get interested it’s usually very obvious based on their behavior. They will want to talk a lot, in a short space of time, and introduce you to their team. When this happens, you need to make sure you have other VCs interested too. Don’t let one VC get way ahead of everyone else in their process.

We need competition on that term sheet, even if your first choice VC wants to invest. So be strategic with your scheduling — when raising a Series A or large seed make sure you’re regularly meeting with at least 5+ new VCs each week, not just 1 or 2. Have a list of 25 or more ready, so you can focus all your outreach and meetings on that type of VC, once you have someone interested.

Why invest all this time and effort? Well, It’s not just for a better valuation. Terms like how the board is structured, what is required for board approval, who pays this round’s legal costs, all of these are negotiable if your potential VC has some competition.

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