Fundraising: telling your story

Part 3 of a primer on early stage tech fundraising based on YCombinator's guidance and my own learning in-the-trenches as a successful founder

Previous posts in this primer:

1. Fundraising (start here)

2. Fundraising: timing

When you raise money you’ll need three versions of your story:

1. A short blurb that covers the most important reasons an investor should take a meeting with you

2. A bullet version of your story that you’ll use as a reference during pitch conversations

3. A deck that aligns with the bullet version of your story to send after conversations

Short fundraising blurb

This is 5-10 sentences covering the most critical parts of your business. It likely covers:

1. Target customer / problem you are solving

2. Market size

3. Early traction metrics (revenue, user base, growth)

4. Key info about the founding team; impressive accomplishments

5. Round size

6. Notable investors if you already have some

This is what you’ll send to the people who you ask for intros to others. This is also something you can ask for feedback on from friendly entrepreneurs and investors. Prospective investors will be using this blurb as well as the strength of the connection and energetics conveyed in the intro to decide whether to take a meeting with you, so you want to make sure this is strong and improve it over time as you learn what elements investors resonate with most. Using selective bolding and bullets is one way to help the key points stand out.

Example blurb from Plura

About Plura

Plura is the virtual town square for edge-of-culture communities. Plura is pioneering a paradigm shift in social apps, emphasizing in-person community events as the nexus for online connection. Plura centers on queer, ethically non-monogamous, and other edge-of-culture communities whose needs have long been ignored by mainstream tech - a $10B market opportunity fueled by generational cultural shifts. Plura is raising a $2M seed.

• Exceptional team: Plura is founded and led by Luna Ray, who led viral growth for Instagram from 700M to 1.1B users. The tech team is led by Jeremy Gillick, who has 20 years of full stack and eng leadership experience from Google, LinkedIn, Paypal, and Ebay.

• Over Xk MAU; growing 25% MoM with 60% 90-day retention (Instagram is 40%)

• Exceptionally enthusiastic community has already committed over 10% of the round without advertising

• Investors include YCombinator, Charles Hudson (Precursor Ventures), Tuesday VC, Claire Hughes (former COO Stripe), Nate Mitchell (Oculus co-founder), and Aditya Koolwal (former Facebook Events Product Lead)

The bullet version of your story

Start here when you are fundraising to get the key elements of your story down. The order of them will shift over time, and you’ll dial-in on what depth of information to share on each area as you have conversations with other entrepreneurs and then prospective investors. My recommendation is to pitch without slides up as they are often distracting - you’ll likely be pitching mostly over Zoom and occasionally in-person, and you want to be able to see the person you are speaking with to read their body language rather than having the slides take up the whole screen. You also want it to be more of a back-and-forth conversation than a pitch. Make sure you have some questions prepared to ask them, and try to avoid launching directly into a ten minute narrative without there being a conversational vibe.

The key elements of your story will likely include:

1. Founding team

   1. Relevant experience, impressive accomplishments, experience working together

   2. If you you have a history of collaboration, VCs like to hear that since it likely means more stability

2. Your / your founding team’s connection to the problem

   1. Why do you have “product/founder fit”?

   2. Why are you uniquely suited to solve this problem?

   3. Why hasn’t this been done before?

3. Market size

   1. Bottoms up analysis is better than top down

   2. It should be venture scale - so at least $10B

4. Early traction metrics

   1. Revenue/monthly recurring revenue, monthly active users, MoM growth, retention, CAC, etc.

   2. Whatever traction metrics are most relevant to your business

5. Raise details

   1. How much you are raising

   2. Valuation

   3. What you plan to do with it

6. Notable investors if you already have some

   1. Only list people who have committed, signed and wired and given their consent

   2. If they haven’t wired yet, don’t list them

When you start talking to other entrepreneurs, get their take on your story first. Does the narrative make sense? What are the parts that get them excited? What parts do they want to know more about? And keep iterating from there.

The deck

While it’s a power move to not even bother to build a deck (”our fundraise is moving so quickly we didn’t even have time”) it seems like even the best YC companies have one these days, so unless you truly are a top 1% business when it comes to fundraising, you probably want one.

You’ll convert the bullet version of your story into slides, and to minimize having to rework your deck a ton, I’d recommend focusing feedback on the bullet version of the story and then building it into slides. I’d also recommend hiring a freelancer who can give your slides a modern look and has worked on startup pitch decks before. Even though this piece of polish isn’t necessary, it really ups the professional look and signals you know what modern design standards are; for consumer-facing businesses this is even more important. It might take you a few weeks to find someone and get in their queue, so put this to-do early on your planning list.

As I said above, you won’t be pitching with your slides, you’ll be sending them after. They should map to your bullet version of your story. No need to overthink this; if you haven’t already convinced someone to invest in you during your conversation, your slides are unlikely to change their mind, so they are more of a way to help them remember your conversation and get them across the finish line. YC has great publicly available content on what to put in your slides and how to design them, so I won’t rehash that here.

YC’s advises not to send your deck to VCs ahead of time, even if they ask. Why? You want to get them on the phone. You don’t want them to see your deck to gather info and just pass.

Next up: Network and intros

Luna Ray works with post-PMF founders as an executive coach. She is the founder and Chair of YCombinator-backed Plura and ex-Meta, Instagram, Faire, and Bain & Company.