Turner Novak’s Post

Founders, Quick question I was debating the other day. What is better scenario to be in currently? 1. Raised a seed round at peak 2021 valuations, so may struggle to raise in the future at a higher valuation unless you at smashing it. You hold more equity as a founder 2. Raised a seed round lower valuations in 2022 onwards so have more chance on raising in the future. Holding less equity as a founder than if you raised in 2021 Would love to know your thoughts.

VC backed founder here. in my current company there was an opportunity (business model A) to do something cool that our customers liked that could make money but not be VC backable on its own. being pre product market fit, i went with it and MRR instantly got to us$10k. i could see a path to $100k mrr within a year, tho the clear risk was we’d eventually hit a ceiling in that model and wouldn’t be able to create/capture more value. the margins weren’t great either but pretty okay. my VC backable business model (business model B) at the same time was at around $1k MRR with better margin and no funny cap for growth. but of course growing it looked less intuitive and more risky but if we succeeded, that could be a billion, maybe a trillion dollar business that’s useful for a lot more people. most people don’t want to build a billion/trillion dollar business and probably don’t believe they are capable of it either. worse, they believe nobody they’ve ever met is capable of it either. to me, based on my values and goals and the fact that i wanna build a trillion dollar company and i have a path to get there, i told myself if i had to pick one i’d business B (as i did, and shut down business A). i definitely did wonder if i could keep doing business A to fund business model B, and maybe that’s possible but i saw 2 risks: 1. split attention and resources and mediocre outcomes on both fronts instead of doubling down in the one i wanna win in 2. creating a team and processes and culture around business model A would mean more future resistance against change. i’d seen this in a previous workplace where the founder wanted an ambitious path and the entire team wanted the unambitious thing that made money since that gave them a lifestyle and status. trapped. i say this to conclude many VC backed founders who don’t have a high MRR aren’t incapable of getting it, they are not optimizing for MRR at all costs. they are trying to crack a much more outsized multiplier in the value they create and capture. it goes deep in the person’s values and needs and wants and skills and resources and culture and confidence and philosophy and etc. of course posts like john’s can get some likes but if you’re actually curious how different founders perceive business and money, this is the perspective that people hating on VC backed founders lack.

Advice for raising your first VC fund from Nichole Wischoff, who grew up on food stamps in Arkansas and closed her $20 million Fund 2 in 2022. 1) Get in the mix. Get in the culture. Start building your network. Show up to events, meet people, ask questions, and start helping them. 2) Share. When you meet an interesting founder, connect them with people who can help. Connect them to investors you want to get to know better to build the strength of your own network. 3) When raising a fund, LP relationships are sacred. Build trust with your network over time through steps 1 and 2 above before raising a fund. "Get as close to the nucleus of what’s going on as you can” Nichole is one of the most interesting people I’ve met in the past few years. She grew up on food stamps in Arkansas and recently raised a $20 million Fund 2 for Wischoff Ventures. Listen to her full story + all her actionable advice for others in the comments 👇

Overture raised $400k to date. Here are the lessons we learned along the way: 1. Non-diluted funding can be a great boost, but approach it thoughtfully. While pitch competitions can be highly rewarding, they also require significant time and effort. 2. Investors are invaluable partners who can support and accelerate the journey. They invest in early potential and progress, and can help you open many doors! Shout out to our incredible investors who made early bets in us: Neal Sales-Griffin, Brad Schnitzer, Mike Wohl, & Blake Hatten 3. Raise strategically and thoughtfully. Focus on what is needed for each stage of growth. 4. Bootstrap as much as possible. We've been inspired by many founders who have achieved incredible success through bootstrapping. Special shout out to these amazing individuals: Abhishek Shah, Noah Edelman, Ananth Veluvali, Rudy Arora. Check them out!

Messages poured in from founders who raised a lot but didn’t make anything personally. Below are a few I heard: - $150M at $450M - founders made $0, didn’t sell in secondary, didn’t get anything from the sale - $350M at $750M - founders sold $4M-$5M in secondary but $0 from the acquisition (investors didn’t make their money back) - $100M at $250M - founders sold $2M in secondary, no money from exit Always best to raise what you need. Overraising thrills but eventually kills. Obligatory Silicon Valley clip: https://lnkd.in/gpDpbriY

Fundraising? Here’s the Real Playbook! 🚩 Red flags for investors: No clear problem-solution fit. Over-promising without proof. A pitch deck that’s all fluff, no substance. ✅ Green flags for investors: Data-driven traction. 📊 A founder who knows their numbers inside out. 🧠 A bold vision with a clear path to execution. 🌟 Raising funds isn’t about begging for money—it’s about proving your startup is a rocket ship ready for launch. 🚀 Founders, what’s your biggest fundraising takeaway? Share below

Many founders face this big question at some point in their journey... Should I raise money, or should I bootstrap? After speaking with Scot Chisholm, founder of Classy, I gained a new perspective on the timing of raising funds. Scott emphasized that many founders raise money too early, and here's the key point: funding robs you of focus. When you're bootstrapped, you’re forced to focus on the things that matter, sharpening your strategy and separating the mediocre ideas from the truly game-changing ones. Once you've proven your strategy works, that's the time to raise capital to accelerate growth. In the early stages, less can be more. Constraints force clarity and precision, which lead to sustainable growth.

FOUNDER.  This word is overrated. Today, most of those who call themselves founder/co-founder are grifters. They stole someone's idea (the BIG-picture), raised money from VCs, or went through an accelerator or incubator (there are a flood of these everywhere) without understanding the value proposition leave alone the CORE value proposition! And....... Once they burn the cash or are out of the incubator or accelerator, they die a quick and fast death. What remains? The "founder or co-founder" name that they continue to use to get into positions that they use to derail other genuine founders.

Seed rounds keep getting bigger in Q1 2024 But more money early on isn't always better for two reasons: 1️⃣ It can be tempting to try and do more things (poorly) 2️⃣ It can make a sub-$3M ARR exits unprofitable for commons Peter Walker and Carta just released data showing that cash raised in Seed rounds continue to rise, while Series A, B, C and D rounds are all down 🤯 For most companies... More money pre-PMF doesn't get you there faster and the $4M raised in a Seed round doesn't include all the money stacked up in pre-seed SAFEs Just a PSA to stay as lean as possible pre-PMF and focus on knocking out the right milestones (problem solution fit and gtm fit) first before chewing through too much equity dilution 💪 -- ♻️ Repost to help a founder in your network Click 'visit my website' at the top of this post to register for my free 7 term sheets training session on how to get multiple term sheets from VCs

When I tell people about Phodu Club, I get three major questions 1) How much funding have you raised? 2) What is the valuation? 3) What are you trying to solve? I am fine with questions due to curiosity, but I find it weird when people equate starting up with raising funds. They think fund raising is success. Yes, I agree that funding can help you scale the company faster and provide a great network. But that's literally the start of the journey, not the end. Change the mindset. Focus on value addition, not valuation. P.S. We are bootstrapped! Dhruva Pai Angle