Week 6: Recap of investor alignment
Know why you are raising capital, what it is for, and who can help you move along your path. Match yourself with the investors thesis and develop a formidable mindset.
This week we talked about things to consider when trying to achieve alignment with an investor. This is typically stuff that is important to institutional venture capitalists but the principles also apply to the first round of capital you raise that would typically come from individuals.
Three main takeaways:
If you are on the venture capital path, you are raising money to reach the next set of milestones to attract new investors.
Don’t be fooled by investor language and use it to generate a FOMO situation in your fundraising.
Develop a formidable mindset that is built on understanding your customer/market and truth.
The slides are up on the course site for reference.
When raising money, this is not a game of achieving the best value for your company at each round. You are not selling a house. You require the capital to achieve a set of milestones that will attract the next investor. Because. That is the path you choose when entering the venture path.
The language that venture capital uses is confusing to first-time founders. If they are going to invest, it happens quickly. Don’t spend time trying to convince a VC to change their mind. Spend time with your customers instead.
Throughout the starting of a company process and beyond, you are going to grow and develop.
What you are aiming for is a formidable mindset. This will look different for everyone. Formidable comes from within and it’s built on a deep understanding of your market/customer, being truthful, and how you handle rejection. It looks like confidence but it is different. Good investors have a sense of detecting it. Great investors can see it before anyone else.
Other notes:
Founder-matching questions have come up a lot in the last week or so. The answer is complicated. Look to events, peer-to-peer groups, and other places where you can meet like-minded people. You can also give the YC founder matching tool a try. There are a lot of folks from the GTA in there.
Next week we talk about the default state of your company and the YIPS.