Pete Flint from NFX shares his biggest learnings about fundraising, such as "Treat VCs like a check and that’s all you’ll ever get. Your perception drives who you attract. Optimize for skill sets and personality, and never settle."
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@peteflint@nfxguild www.nfx.com
Largest global online real estate
marketplace
$33 million raised
$96 million IPO
$3.5 billion merger
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VALUE DRIVEN BY NETWORK EFFECTS
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ONE
If you tell a VC you don’t
have competitors, you are just
communicating ignorance.
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THE TRUTH ABOUT COMPETITION
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•If you don’t have any, you generally aren’t attacking a big
market
•3 competitor views you need: direct, adjacent and potential
•Minimum 5 criteria to address: Strengths, weaknesses, funding,
location, scale
•Your competitive edge = why they can not or will not do what
YOU are doing
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GREAT ATHLETES
KNOW THEIR
COMPETITION
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AIRBNB
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TRULIA
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TWO
NEARLY EVERY
SUCCESSFUL FUNDRAISE
IS DRIVEN BY SCARCITY
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THE TRUTH ABOUT SCARCITY
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•Scarcity can be engineered by 3 key factors: size of raise,
your confidence, and how quickly you move
•DO Raise less than you need
•DO Manufacture ”want” by confident articulation
•DO Seize interest with speed
•DON’T think its closed deal until the $ hits the bank
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SCARCITY IN
FUNDRAISING IS
CREATED BY
BEHAVIOR,
NOT WORDS
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THREE
YOUR NETWORK IS THE
RESULT OF YOUR
HUNGER
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THE TRUTH ABOUT NETWORKS
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•Few people are born connected; the rest are just hungry
•If you can’t figure out how to meet VCs, you’ll have a
really hard time building a startup
•Give first
•Use Signal to find, understand, and connect with VC’s:
http://signal.nfx.com
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FOUR
OPTIMIZE FOR THE
SHORT-TERM AND EVEN
IF YOU WIN, YOU LOSE.
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THE TRUTH ABOUT LONG-TERM THINKING
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•Few fundraise for the long-term, those who do often win.
•Top investors who turn you down will often meet you
again. Hit your plan.
•Trust is like traction – it takes a long time to earn but once
you do, the benefit is exponential.
•Keep terms simple, don’t optimize for valuation.
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FIVE
FORMULA FOR “YES”=
MARKET TIMING +
PRODUCT TIMING +
COMPANY TIMING
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THE TRUTH ABOUT VENTURE RISK
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It’s the right time to invest in this market
AND
It’s the right time to invest in this product
AND
It’s the right time to invest in this company
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THE 3-FACTOR TIPPING POINT
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•Market timing: Is this a big enough market that is likely
going through some sort of change?
•Product timing: Is this product in the most exciting and
fastest growing part of the market?
•Company timing: Is this team relative to the
competition & opportunity the right fit for this investor?
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SIX
HAVING TOO MANY VC
MEETINGS CAN BE AS
BAD AS HAVING NONE
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THE TRUTH ABOUT VC SIGNAL
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•VC’s are highly collaborative. Word travels fast.
•VC’s tend to have the same, small groups of
co-investors.
•If you’re meeting with no one = bad signal
•If you’re meeting with everyone = neutral to bad signal
•If you’re meeting with a targeted few = strong signal
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BETA ACCESS FOR
STARTUP GRIND:
VCmatchApp.com
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SEVEN
TREAT VC’S LIKE A
CHECK, AND THAT’S ALL
YOU’LL EVER GET.
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THE TRUTH ABOUT FOUNDER-VC RELATIONSHIPS
@peteflint@nfxguild www.nfx.com
•True – Not all VC’s are accretive.
•But – Your expectation drives probability.
•And – Your perception drives who you attract.
•If you’re looking for money, that is all you’ll get.
•Optimize for personality and skill fits, and never settle.
•Remember – your investor syndicate is your brand.
