Tyler Richards’ Post

Timing is startups is everything but you cannot hide from market facts. When it gets hard you have to do even more with less. (like every great Bootstrapped Founder) Find a way to get that first product working. Find a team that wants to make it work. *incentives Find a trusted investor whose less concerned about short term pain. Find a way to cut almost all costs Find a way to raise the bar. (yes, raise the bar, make getting in harder than ever)

The 2024 Big Book of Venture Capital for Startup Fundraising is Out I just finished reading this fantastic resource on the VC industry (thanks, Rohit Yadav, for sharing.) Packed with valuable insights, it is a must-read for founders and investors alike, especially the section on fundraising. While you go through the data, I'd also encourage you to think about: 1️⃣ The Fundraising Journey VCs are acutely aware that products pivot Sometimes, the startup team is more valuable than the product itself So, make sure you surround yourself with the right people Joe Vrankin, CEO of Puttshack, talks about that here: https://bit.ly/3yCdU5n 2️⃣ Deal Dynamics Building momentum takes effort Be prepared to meet with numerous investors before securing funds And don't underestimate the power of momentum Securing the first investor can very quickly accelerate subsequent deals 3️⃣ Negotiations Unless you're highly experienced, don't negotiate in real-time. Instead, take requests and seek advice from your partners, advisors, or legal counsel. Remember, while some deal terms might seem hectic, most VCs want a reasonable agreement. The VC landscape is a fast-moving beast. Take this opportunity to equip yourself for success with the latest insights on startup fundraising. 👇 Access the full report from Rohit for a comprehensive read in the first comment below. PS 🔔 Follow me for strategies and resources for startups and VCs! Looking to raise capital? 💸https://fundingstack.com/ for VCs and investors 💸https://foundersuite.com/ for startups At only $250/month: Fundingstack gets you access to 221,000+ global investors. Or you can send me a direct message with "FREETRIAL" and I'll give you a secret access link.

Entrepreneur lessons from a venture capitalist- What’s Are The Brutal Truths About Fundraising for Startups? (a great article I read on SAASTR) The brutal truths are: Everyone wants to fund the same thing. The earlier stage you are, the more different folks will come to different conclusions based on very limited data. E.g., just the team. Or just a few customers. But almost everyone is still looking for the same thing. Unicorns. They just may roll the dice differently in the early days based on whatever tiny signs of pre-success you may have. More on that here. Pattern matching is rampant. If you are really going to “meet” with 1,000+ founders a year, that’s really too much to process. There are good types of pattern matching, and bad types. Bad types create huge hurdles to founders that do not look, act and talk like privileged founders. You are just a product. And so are VCs themselves. You may just 1 shot at it, but investors need to make 20–40 per fund. So each start-up they invest in is a bet, and really, a product. And their own investors (the LPs) literally view VC firms as different financial products to potential pick from. Most successful start-ups are new versions of existing categories and existing products. Yes, you can create a category. But since most software companies are improvements on large markets, it’s hard to get anyone’s attention if you are doing something truly novel. More on that here: About 70% of SaaS Unicorns Are New Versions of Existing Categories of Software. Folks invest in who they know — if they can. It’s just less risky. Investing in start-ups is a bit scary. The money could disappear. You often only have a tiny bit of time to get to know someone you’ll be economically “married” to for a decade. It’s just easier to invest in people you know and already trust. And that creates barriers to folks that don’t know anyone with money to invest. Big ones. You have to go much, much further without privilege and credentials. Get into YC if you can. Get the best warm intro you can. Get 1 angel to invest in you with a brand, if you can. Almost everyone is looking for signals. Signals you might be the next Zoom or Uber or Slack. Without any signals, it is much much harder. This is not fair. It is a reality today.

This is a refreshingly candid take on the startup funding landscape, Clive. Your distillation of SAASTR's insights cuts through the typical Silicon Valley sugar-coating to reveal some uncomfortable but crucial truths. That observation about "everyone wanting to fund the same thing" while using different evaluation metrics in early stages is particularly astute. It explains why we often see seemingly contradictory funding decisions in the market. Your point about pattern matching deserves special attention. As someone in the tech space, I've seen how this creates what I'd call "privileged founder blindness" - potentially missing out on innovative solutions from founders who don't fit the traditional Silicon Valley archetype. The "70% of SaaS Unicorns being new versions of existing categories" stat is fascinating and somewhat counterintuitive to the disruptive innovation narrative we often hear. It suggests that real success often lies in better execution rather than radical innovation. That economic "marriage" analogy for investor relationships is spot-on. Just like traditional VCs are "products" for their LPs, startups are "products" for VCs - a perspective shift that many founders need to understand. The closing truth about needing to "go much further without privilege and credentials" is both sobering and essential. While it's not fair, acknowledging this reality helps founders better prepare for the journey ahead. #StartupFunding #VentureCapital #EntrepreneurshipReality #StartupAdvice #InvestorInsights

Fundraising Challenges in 2025 🚀 Recently, Pitchbook released a report highlighting that there are currently over 4,000 zombie venture funds in the market—the highest count on record. 🧟♂️🧟♀️ What are zombie funds? These are funds that technically exist, but in practice, don’t. They create an illusion of activity, taking up founders’ time and joining calls, but ultimately, they aren’t closing deals. What does this mean for founders? 1. Raising capital from VCs today has become a daunting task. So, where to turn instead? Based on our own experience (as we’re preparing for a new round), three active sources are currently standing out: Angels, family offices, and banks. 💸 (Yes, we actually had a call with the Development Bank of Thailand, and they’re investing in startups, believe it or not! 😮) 2. Startups that are more than four years old face the toughest challenge in securing investments. Their survival may hinge on either a unique innovation or extreme growth. 📈 Why? Investors are aware that many of these startups raised funds during the era of “helicopter money,” and 99% of those projects are considered dead weight—rarely worth the time it takes to review a pitch deck. Are there any positives? Absolutely. Here are some key points: 1. The market is cleansing itself—on both the startup and fund sides. 💥 This means competition for capital is decreasing, leading to more productive investor calls. Less wasted time increases the chances of closing rounds in fewer calls. 📞 2. Systematic fundraising is taking new forms. Whereas startups previously needed $100k MRR to start raising a Series A, today they need $200k. Given that the seed-to-A stage is already the toughest transition, this gap has led to a higher startup mortality rate. Bridge rounds were once unpopular, but now there’s a rise in intermediate rounds like seed extensions. 🌱 Essentially, startups can fundraise more opportunistically, rather than on rigid schedules. In my next post, I’ll dive into how founders are finding creative ways to navigate these challenges and secure the funding they need. 💡✨

Was fun writing this basic article on fundraising for #deeptech #toughtech #frontiertech startups with my colleague Tina Tosukhowong. I am sure there will be sequels for this one with higher resolution in the future. While often considered a daunting task, fundraising is pivotal to the growth and sustainability of any startup. At TDK Ventures, we aim to help startups approach funding and syndicate development professionally. That's why we're sharing how startups can give themselves the best chance to secure necessary funding through structured approaches, building a robust business plan, developing a well-crafted pitch deck, and more. Find out more about how to enhance fundraising efforts and secure funding by exploring our comprehensive guide: https://bit.ly/43v9Sr6 #VentureCapital #VC #CVC #startups

Start-Up Investing, Part 3: From Pre-Seed to Series Funding You've probably heard somewhere 'X start up just raised 15 million USD at their Series A round' or similar. What is a Series A or other stages that a start up might raise funding? The journey from an idea to a scaled business is marked by multiple funding stages, each with unique goals, challenges, and types of investors. Here’s a quick guide to the lifecycle of startup investment: 🔹 Pre-Seed and Seed Funding: Early on, funding usually comes from friends, family, or angel investors. The goal is to build a prototype, test product-market fit, or launch an MVP. Seed rounds are often led by angels or micro-VCs. During pre-seed, start ups are not revenue generating, but they might be starting to generate revenue at seed. 🔹 Series A: Once a company shows early traction, it may raise a Series A to optimize product-market fit and expand the team. VCs are typically involved here, seeking proof of potential and growth. At this stage, investors typically expect revenue growth. 🔹 Series B and Beyond: As the company scales, Series B and C rounds fuel market expansion, product improvements, and team scaling. Larger VCs and institutional investors are key, looking for proven growth metrics and market leadership. In some industries, there might even be acquisitions to achieve growth. Beyond this, there could be more rounds depending on the start up. While each stage brings the startup closer to growth, the ultimate goal for many is an IPO (Initial Public Offering)—though only around 1% of startups reach this milestone. 💬 Curious about the funding journey? Share your thoughts or questions below!

VC funding is a high-stakes game that startup founders need to understand, as it involves managing investor expectations and aiming for exponential returns. 💼 Venture Capital 101: A VC fund is essentially a pool of money from Limited Partners (LPs) – think pension funds, family offices, and endowments. General Partners (GPs) are the venture capitalists managing these funds, investing in startups and aiming to generate significant returns. 📈 Money Makers: GPs earn through two key streams—management fees (around 2% annually of the fund size) and carried interest (carry), which is typically 20% of the profits. This creates a strong incentive to turn a $100 million fund into $500 million or more. ⏳ The Clock is Ticking: VC funds usually have a 10-year lifespan, with 3-5 years for initial investments and the rest focused on follow-ups and exits. GPs need to raise new funds every 2-4 years to keep the lights on and continue earning management fees. 🎯 High-Pressure Performance: The key metrics VCs are judged by include IRR (Internal Rate of Return), DPI (Distributions to Paid-In Capital), and TVPI (Total Value to Paid-In Capital). These determine whether LPs will back GPs in future funds, pushing GPs to pursue outsized returns. 🚀 Unicorn Hunting: The "power law" dominates VC strategy—where only 1-2% of investments are expected to return 50x or more. VCs seek out startups with the potential for massive market domination, not just profitable businesses. 🏆 What VCs Look For: Startups with huge market potential (TAM in the billions), a scalable business model (often in tech or SaaS), a strong founding team, and an innovative advantage are most likely to attract VC interest. 🔥 Growth on Steroids: VCs often push founders to raise another round within 18-24 months to increase their investment’s value on paper, making growth the top priority. While this can drive hypergrowth, it also puts immense pressure on founders to deliver rapid results. ⚖️ The Flip Side: If your company fails, it's not necessarily the end. VCs understand that many investments won't succeed, and if you've shown competence, they may back you again in future ventures. 💡 Is VC Right for You?: Before diving into VC funding, ask yourself if your startup can realistically meet the high-growth demands and massive return expectations. Taking VC money means not just capital, but also a commitment to fast scaling and frequent fundraising. #startups #venturecapital #growth 💸 High Stakes, High Rewards: VCs aren't looking for steady, profitable businesses—they're looking for unicorns that can grow fast and deliver outsized returns. 💡 Metrics Matter: Top VCs need to show strong IRR, DPI, and TVPI to raise new funds and keep LPs happy. ♻️ Repost if you enjoyed this post, and follow me César Beltrán Miralles for more curated content about leadership! https://lnkd.in/g7DbGwwS

💰 In Fundraising, Seed is No Longer a Round, It's a Phase. In today's fast-paced startup ecosystem, the landscape of fundraising has evolved significantly. Gone are the days when "Seed" referred to a single, initial round of funding. Instead, Seed has transformed into an extended phase—a critical, multifaceted stage in a startup's journey to growth and success. ☘ Seed as a Phase: What Does it Mean? 🌱 Multiple Rounds Within Seed: Startups now often raise multiple Seed rounds—Pre-Seed, Seed, Seed+, and even Bridge rounds—each aimed at different milestones and growth stages. This allows founders to fine-tune their products, validate their market, and build a robust business model. 🌱 Extended Timeframes: The Seed phase now spans a longer timeframe, providing startups with the runway to experiment, pivot, and perfect their offering. This flexibility is crucial in navigating the uncertainties and dynamics of early-stage ventures. 🌱 Diverse Investor Profiles: Seed investments are no longer limited to traditional angel investors or seed funds. We see a mix of micro VCs, accelerators, and even strategic corporate investors participating, each bringing unique value beyond just capital. 🌱 Strategic Milestones: The focus during the Seed phase is on achieving key milestones—product-market fit, customer acquisition, revenue generation, and team building. These achievements are critical in positioning the startup for successful Series A and beyond. 🌱 Risk Mitigation: By treating Seed as a phase, startups can mitigate risks more effectively. They have the opportunity to gather more data, refine their strategies, and demonstrate traction, thereby increasing their chances of securing subsequent funding rounds. Why This Matters For founders, understanding that Seed is a phase and not just a round reshapes how they approach their fundraising strategy. It emphasizes the importance of continuous growth, strategic planning, and adaptability. For investors, it highlights the need for patience, guidance, and support as startups navigate this extended phase. In this new paradigm, the Seed phase is not just about raising money—it's about laying a solid foundation for sustainable growth. Let's embrace this evolution and continue to support innovative ideas, bold entrepreneurs, and transformative startups.

🚀Exploring the Essentials of Seed Funding for Startups In my previous post, I discussed bootstrapping and its pros and cons. As a startup founder, the natural progression from there is to consider scaling your venture, which often leads to exploring seed funding options. Today, I'm diving deep into seed funding—what it is and the different types available. 🚀 What is Seed Funding? Seed funding, often synonymous with angel investing, is the initial financial fuel for startups at the very beginning of their journey—ranging from the idea stage to early trials with minimal customers. This type of funding is crucial as it allows a business to evolve from a mere concept to a functioning entity. 💡 Why is Seed Funding Vital? Seed funding is not just about financial investment; it’s a catalyst for growth and stability: 🛡 Reduces financial risk for founders 💸 Addresses capital shortages 🔄 Serves as crucial working capital 🔗 Expands business networks through strategic partnerships ⏩ Facilitates rapid scaling and accelerated growth 🌱 Types of Seed Funding: A Diverse Landscape Crowdfunding: Platforms like Kickstarter offer a modern way to raise funds directly from supporters. Corporate Seed Funding: Investments from major firms like Google or Apple can significantly enhance visibility and credibility. Angel Investors: Individual backers looking for equity or convertible debt in return for their investment. Incubators: Typically associated with educational institutions, providing not just funding but also training and resources without necessarily taking equity. Accelerators: Focus more on scaling businesses with a model that includes taking equity stakes. VC Funding: Venture capitalists enter the scene based on detailed analysis of the startup's potential for success and market dynamics. 🔗 In my upcoming post, I’ll dive into how to effectively raise seed funding and navigate the initial rounds of financing. Stay tuned for more insights and feel free to share your experiences or questions about securing seed funding for your startup! #StartupFunding #Entrepreneurship #SeedFunding #StartupLife #AngelInvesting #VentureCapital #BusinessGrowth