Founders -- straight up, VCs aren't your "friends". 90% of what they post is marketing. Their guidance is for their own benefit, not yours. Here are a handful of things most investors will agree to when prompted, but never say proactively.
* Not every new company should fight for startup capital. The longer you bootstrap, the better your outcome, both in terms of personal ownership and likelihood of success.
* Lifestyle businesses are AWESOME. You can absolutely build a "small" business over time, enjoy the ride, not have to work crazy hours all the time, grow it to $5 - $10M and sell it for generational wealth.
* VCs look at your deck for less than 90 seconds before deciding whether to take a call with you. They are looking for any reason to say "no" early on. Everything they say about deck building is oriented towards managing an overabundance of dealflow.
* A standard VC portfolio has at least 20 investments because that is the minimum number of companies for VC odds to work. A driven founder has, maybe, five startups in them. Your startup is a good bet for them and a poor bet for you.
* Raising capital from Friends and Family (known as a FaF round), is an absolutely awful risk for founders to take. Sometimes you don't have a choice, but recognize that getting Nana to invest $25k in your startup isn't a badge of honor and it certainly isn't market validation.
* Speaking of, raising venture capital Is. Not. Market Validation. The best VCs all subscribe to the same philosophy -- "you can't pick the winners, you can only improve your dealflow." Stop announcing your latest investment like it means anything other than you extended your runway in exchange for dilution.
I WANT TO BE VERY CLEAR: institutional investors are not your enemy. Some of my best friends are VCs. They provide a (sometimes) useful business service. But it's a business, and their primary customers are the LPs, just like Nike sells overpriced shoes as a personal statement and brags to shareholders.
VC is a tool, not a religion. The partners are not prophets. To quote Foundry VC partner Brad Feld, they offer "data, not truth."
#startups #investment #fundrasing