Adam Jackson, Co-Founder & CEO ,Braintrust - Raising a Seed Round: How to Win the Real Numbers Game

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This document provides advice on raising a seed round of venture capital funding. It recommends aiming to raise twice as much funding as initially planned to allow for buffer. It also suggests derisking the deal by having a strong founding team, targeting a big market, and demonstrating customer validation. The document advises talking to 50 potential investors to ensure getting enough commitments since coming up short could be fatal. It emphasizes building momentum by becoming oversubscribed and maintaining leverage by having a cash-flow-positive option. The overall message is that raising venture capital is a numbers game that requires a brute force approach.

Technology

JUNE 10, 2019 TECHSYLVANIA
RAISING A SEED
ROUND: HOW TO WIN
THE REAL NUMBERS
GAME
01

05
● Who is this guy
● Pros / Cons of VC
● Prep your deal
● How to win
OUTLINE

Engineer → Entrepreneur
4x Founder (2x CTO, 2x CEO)
● 2006: StepUp Commerce acquired by Intuit
● 2011: DriverSide acquired by Advance Auto Parts
Founded 2012, $160M raised Founded 2018, $5M raised
Early Stage Investor
Angel: Rapportive, Zeneﬁts, Milo, Protocol Labs, Automatic, Zappedy, Placer, Coverhound, MyTime, Markable + ~40 more.
Digital Assets:
ADAM JACKSON

VC: PROs and CONs
Build the best team
Room to explore / iterate
Social proof
PROs CONs
Lose control
Massive time distraction
Lack of discipline

IT’S PURELY A NUMBERS GAME
1. How much to raise
2. Derisk your deal
3. Who will be helpful
4. How to get it done
IF YOU DO GO THE VC ROUTE...

Effort to raise $1m = effort to raise $3m once you get momentum
Add buffer -- raise 2x what you think you’ll need
HOW MUCH TO RAISE

Keep it reasonable - you want your early investors to do great
High price early → lots of pain later
HOW TO PRICE?

Strong founding team:
Engineer
Subject expert
Strong narrative
Big market
Strong customer development
Clear value proposition: painkillers > vitamins
Don’t stress over early metrics - even if good, investors won’t buy them at small scale
DERISK YOUR DEAL

Strategic value-add for your category
Good brands
Warm intros to Series A
Access to customers / community
0 VCs or 5 VCs!
WHO WILL BE HELPFUL

BRUTE FORCE APPROACH
Investors are busy
Pattern matching makes them miss most interesting deals
Deal could be a great fit for the firm but partner can’t take another company
Geography
Group think: collusion is common
GET IT DONE

Play the numbers.
There is more VC $ than good deals out there - keep that in mind to keep your
confidence high
Keep it time constrained
Shock and Awe
HOW TO WIN

$1m seed round
10 x $100k
1 x $500k + 10 x $50k
You’ll need 10-20 investors, minimum
So talk to 50
Why?
Coming up short = death
PIPELINE: HOW BIG?

Once you’re close, start using this word → builds strong momentum
BE OVERSUBSCRIBED

Work hard to have a cash-flow-positive option → builds leverage
CASH IS KING

GOOD LUCK
45
CONFIDENTIAL
KEEP IN TOUCH!
@ADAMJACKSONSF
linkedin.com/in/ajackson

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