VC Minute – quick advice to help startup founders fundraise better.
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The second question that can be pretty tricky is, where are you in the process? Basically, are you popular? Do investors love this deal? Is this going to be oversubscribed? Is it a popular deal? Should I get in? They don’t want to miss out. There’s an element of FOMO there.
With this question, you really want to somehow convey momentum. It’s important to tell the truth. It’s important to not overplay your hand. You’re going to look like an asshole if you say that you have a term sheet when you don’t. The investor world is a small world; people talk. You can talk about eminent term sheets, but don’t do that unless you’re 90% sure that you have one in hand.
The right answer is something like, you’re getting great feedback, and you would really like to have some sort of indication of interest in the next few weeks. And then you are interested in choosing the right partner after that. Emphasis on the right partner. VCs love that.
The third sneaky question is, what are your valuation expectations?
And during my process to raise our seed funding at Rescripted, I got all three of these questions from pretty much every single VC.
In this question, don’t share numbers. You want to say that you want to make sure that the valuation that your company gets is fair and consistent with the market. You want to show them that you’ve done your research.
You know that in a seed round, VCs have certain ownership thresholds. But you also want to make sure everybody is appropriately incentivized. I would say that personally, everything that I have done has been all about my team. My team is everything to me. VCs love to see that you’re taking care of your team, your co-founders, your early employees, et cetera. That’s really important.
You also want to emphasize that you’re looking for the right partner, not the highest valuation.
About Rescripted
Reaching 9M people monthly, Rescripted is the #1 global media platform for women’s health and fertility, providing content, tools, and resources for wherever you are in your reproductive lifecycle. Learn more at rescripted.com, and follow along at @hellorescripted on Instagram and TikTok.
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