Exterior, San Francisco’s SOMA district, two nerds, walking briskly. Tents, traffic, and garbage — everywhere.
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Founder, excited: “JCal, I just got some advice from an advisor that I should call my first round of funding a ‘pre-seed’ round so that the optics are clean when I go for my Seed Round and Series A…”
Founder, more excited: “you know… in case I don’t have product-market fit and investors think we’re a zombie startup… trapped between our Seed and Series A funding.“
Angel: “It’s irrelevant, all of it.”
Founder, confused: “My startup? The Pre-Seed Round? The advice? My life?”
Angel: “All that matters, is the chart.”
Founders get too much free advice these days, most of it from folks who have never built or invested in a billion dollar company. Any advice you get from someone who has not been involved in a unicorn startup is largely irrelevant if you are trying to build a unicorn startup.
Candidly, most of what I thought I knew before investing in seven unicorns was wrong or unimportant. If you want to understand what it’s like to climb El Capitan you can interview people who have done it, and as a journalist, conference impresario and podcast host, I did my share of asking questions.
But what journalists, talk show hosts, and directors know about hanging off the side of a rock is vastly different than what Alex Honnold knows.
If you want to raise capital for your startup, there are countless books and blog posts for you to read, but you must sort those words into two buckets: folks who have built or invested in unicorns and folks who haven’t.
After introducing the 200+ founders I’ve invested in to thousands of other investors, here is the number one thing that has lead to them to (a) getting a meeting and (b) getting multiple term sheets: a chart that doubles every three to six months.
If you have a revenue chart that doubles every six months or less, like Uber, Calm, Thumbtack, Robinhood, Trello, Fitbod and LeadIQ, you will be tripping over all the venture money on your doorstep.
Are there other reasons than “the chart” that VCs invest? Yes!
Can you have “the chart” and have VCs pass on investing? Yes!
Can you use unsustainable growth techniques and fake “the chart?” Yes! (but I don’t advise it)
Is having a chart that doubles your best chance at raising capital? Yes!
PS – The scene above is 100% true, except it’s a composite of three different conversations I had this week that I bundled together and took liberties with.
PPS – If you have $5,000 to $50,000 in revenue a month and want to 100x it and build a unicorn, email your story and chart to email@example.com