“Don’t take too much advice. Most people generalize whatever they did and say that was the strategy that made it work.”Ben Silbermann, cofounder of Pinterest
When we raised our seed round for Ridejoy, we got lots of great advice from many smart, experienced people. This was wonderful except that much of the advice was contradictory:
- Raise as much money as you can! (vs) Don’t raise more capital than you need to make it to the next milestone
- Decks are a useful way to walk investors through your pitch (vs) Decks are out! Just focus on telling a great story
- Don’t worry about signaling risk – startups are either hits or flops (vs) Signaling risk is a big deal and you should be concerned
- Work hard to get investors who really add value (vs) Many/most investors don’t really add value so just go for easy money
We had never raised capital from anyone (friends/family, angels, VCs) before and it was a little frustrating to seek out perspectives from people who had fundraising experience or who invest for a living and get such ambiguous advice!
Ultimately we had to carve out our own path by being relentlessly resourceful. We took the advice that made the most sense, made pitches, learned from our mistakes and iterated till we figured how to make it work.
I could write a “top 10 list of tips on raising a 1.3M seed round”, and maybe I will another day, but the point of this post is that with fundraising, as with many other things in startups and life, you’ll never be totally sure that you’re “doing it right”.
The best you can do is listen to everyone and then make up your own mind.
This is scary because that means if things blow up, you have no one to blame but yourself. On the other hand, this approach affords you the strongest learning opportunity (because you decide for yourself what you’re going to do) and over time, makes you a more capable individual.