Hey!! You've made it to issue #122 of the VC Demystified newsletter. To access the 100+ other venture capital guides I've written, go here.
VC Job Openings Preview (3 of 10)🪄
Primary is hiring a Incubation Associate, Compute.
https://jobs.ashbyhq.com/primary/48877020-9c04-42bf-a81c-e0acf4d5da7a
Cometa is hiring an Investor.
https://airtable.com/appDnVkEqRvCNTupM/pagS2g6ePkuJYS4nd/form
ICA Fund is hiring an Investment Principal.
https://www.ica.fund/careers/investment-principal
Read time: 5 minutes
VC is such a nuanced industry. There are so many unspoken dynamics that happen on the inside that many folks who don’t sit on this side of the table are not privvy to. And that’s the whole point of this newsletter. Today I want to talk about how certain founders are able to win over VCs with their story and founder-market fit and why others aren’t.
Scenario: Two founders pitched the same VC in the same month, going after the same market. Both raising a pre-seed round.
Founder A had:
Sharper product story
Cleaner deck
Better wedge
More defensible moat on paper
Founder B had:
A good idea (not great, arguably the weaker of the two on paper)
The fund passed on Founder A and wrote the check for Founder B. WHY?
It’s because investors at the early stage are underwriting the person more than the idea. And in this scenario, Founder B must have had a more compelling founder-market fit or at least, they did a better job of pitching that to the VC.
If you're prepping to raise, or you're the one on the other side of the table trying to size someone up, here's what actually gets weighed when a fund decides whether you're the right person to solve this particular problem.
Have you built something before, anything?
Not "have you founded a company."
Have you ever taken something from nothing to something, 0 to 1. A club, a non-profit, a Discord community that hit 10K members, a scrappy side project that launched.
Investors are pattern-matching for people who don't wait for permission to make things exist. That instinct doesn't just show up the minute they decide to found a company, it is believed that a founder has always had that innate passion and desire to build.
Have you lived inside this problem or are you visiting it?
There's a difference between "I read a report about this industry" and "I spent four years watching this exact inefficiency."
Founders with scar tissue from the problem move faster and get fooled less. It's the single fastest way to separate a tourist from a resident.
This means you have done extensive customer research before deciding this is the problem to solve.
Who in the industry picks up when you call?
Not LinkedIn connections, actual relationships.
Subscribe to Premium to read the rest.
Become a paying subscriber of Premium to get access to this post and other subscriber-only content.
Upgrade
