Pricey SaaStr: What was your first assembly with a VC like?
My first assembly with a VC …
It went rather well. In truth the very first VC I ever pitched as a founder supplied to fund us tentatively with $5m — by the tip of the primary assembly!
And … then I blew it.
What occurred? Nicely, first the intro was from an ex-boss, so I had a robust heat referral. I additionally had a reasonably good deck and presentation and workforce. Market timing was additionally on our aspect. We had 2 sturdy early reference prospects. And … we have been a reasonably good duo pitching, my co-founder and me. Keep in mind, I’d carried out a lot of VC pitching as a VP at start-ups earlier than. I knew what a very good pitch was, and what good metrics have been, and what VCs have been thinking about. I used to be new as a founder — however not new to fundraising.
We pretty rapidly acquired a draft time period sheet for $5m on one thing like a $10m pre. Not an excellent at this time given the early traction we had, however truthful sufficient for the time.
I went and requested some people what to do. I used to be suggested to push again and ask for a considerably increased worth. So … I did. With out even interested by it. I requested for one thing like $7m-$8m at a considerably increased worth. The small print I kind of overlook. However I do know I requested for materially extra.
The VC acquired offended / pissed / indignant / spooked / apprehensive / one thing. I don’t know what to today. However he went darkish.
I requested him 4 weeks later what occurred, and after 3 emails or so, he lastly responded. He mentioned I had simply pushed him too laborious. With out understanding it.
However understanding what I do know now, I feel I pushed him out of his consolation zone. His fund wasn’t large, and $5m was possible the “chew dimension” he was snug with. However greater than that was simply too large of a test. So he walked. Something greater than $5m at this time is an excessive amount of for me, too, at SaaStr Fund.
And in the long run, there was drama, and we needed to accept lower than $8m pre from one other, worse investor. So it wasn’t price it on any degree.
So then I discovered to push, for certain — however to hear. Fastidiously. To be taught what every VC is ready to do, is snug to do. And to not by chance cross these strains. Particularly with out understanding it.
