VC Minute – quick advice to help startup founders fundraise better.
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Before we ever collected a single investment at SpringTime Ventures, our partner, Rick Patch with decades of venture capital experience said, “our only job as seed investors is to get our portfolio companies to a Series A.” When I first heard that I’m nodded appreciatively, but I didn’t really get it.
Now five years into seed investing. I see how spot on that is: seed investors are just one step on the VC Treadmill.
Founders part of your job in a pitch is to convince potential investors that you will get to the next level on the treadmill. And to do that, you need to three things: Here, There and Capital.
You must show that you can get from Here, where your businesses is now. To There, the milestones for the next round of fundraising. With the Capital from this round. You can draw that line from Here to There with even the slightest bit of traction.
Show what you were able to achieve with limited resources. Describe your plans to scale, how you’re going to hit the milestones that will get you that next round of funding. The less traction that you have, the more that you have to sell the vision.
You have to show the path from Here to There with the Capital that you raise. This should not be at the cost of selling The big 10 year vision. Rather you’re demonstrating that, you know the immediate goals that you need to hit in order to level up on the treadmill.
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