A Product Market Fit Show | Startup Podcast for Founders
00:21:15 · Lee Silverstone, Pablo Srugo
[00:21:15] S0: And the other thing too, I would say, and this is a mistake I've made before, is you get these intros to VCs with really big names. You're not ready to go meet with that fund, but you're like excited by the name of the fund and walking into the meeting you're like, why am I doing this? I'm, I'm not ready <laugh> I know , I know they're gonna ask questions that are not good , that I'm not gonna have good answers for. And you should be very intellectually honest with yourself about if you should be going into that room or not. And I, and I think people don't do that enough 'cause they get excited about the brand name. [00:21:45] S1: Boom. So those are the mistakes. Kay , here's a handful of tips. Tip number one. Founder intros are the best intros. Agree or disagree? [00:21:55] S0: Disagree. I don't know if, I don't know if they're the best intros. I think founder intros are the best intros. If the founder who's introing you has had an exit for that fund and now they're also like an angel investor or something like that. I think if the founder is like a current founder in the fund, you don't know what the relationship is with that fund or not. I would say actually my favorite intros to funds are LPs, [00:22:18] S1: LPs. LPs. That's a good one. But harder to find. No, [00:22:21] S0: Yeah , for sure. Harder to find. Yeah . I don't even know if you're an LP or not, but some, a lot of angel investors are LPs , uh, and a lot of like founders who have had exits are LPs. I actually think that's the better intro than founders.
00:22:21 · Lee Silverstone, Pablo Srugo
[00:22:21] S0: Yeah , for sure. Harder to find. Yeah . I don't even know if you're an LP or not, but some, a lot of angel investors are LPs , uh, and a lot of like founders who have had exits are LPs. I actually think that's the better intro than founders. [00:22:32] S1: I think that's true and you can get it. I guess my point is, as a founder thinking of raising, one thing that I don't think is tapped enough is like, it's pretty easy to get another founder who's like a notch above you to give you 30 minutes, like for true advice. And that founder guarantees knows some VCs. Do you know what I mean? So I I find that that's like an untapped, not as, could be more tapped. I mean, people use it, but [00:22:53] S0: I think it's, I think it's good. It is better than asking <laugh> like another VC for an intro to a VC fund. Don't do that. Yes , exactly . Uh , like don't ask Pablo for an intro to another Canadian VC fund. They're gonna be like, well, Pablo's not investing. Like what ? Why , why is he just , [00:23:08] S1: That's a tough one, man. I get that often. Like, you know, pass and it's like, okay, like do you know any other VCs you should [00:23:13] S0: Talk to ? No, no, no, no. The opposite. If , if , if , if I came to you and I asked you to invest in my business and you passed , I'd be like, don't ever tell anyone. Don't ever intro me to a vc. Don't ever tell a VC that you and I talk. You don't even know me, bro. You don't even know who I am .
00:23:13 · Lee Silverstone, Pablo Srugo
[00:23:13] S0: Talk to ? No, no, no, no. The opposite. If , if , if , if I came to you and I asked you to invest in my business and you passed , I'd be like, don't ever tell anyone. Don't ever intro me to a vc. Don't ever tell a VC that you and I talk. You don't even know me, bro. You don't even know who I am . [00:23:27] S1: Okay , here's a tip and I think you're gonna hate it because it's so cliche, but there's some reality to it. And I just wanna get your reaction raising from a position of strength. What's your initial reaction when you hear that? [00:23:38] S0: Uh, I, I think like, you know , uh, yeah, I think it's. <laugh> [00:23:42] S1: <laugh> [00:23:43] S0: What business is ever in a position of strength? <laugh> . Like you ne you never are. You ne there's always skeletons in the closet. There's always like, you know, storytelling and whatever and all this stuff going on. Like no company is in a position of power ever. If you were in a position of power, like you probably wouldn't need to fundraise that. That's the reality. Like, and I , I don't know, I don't really like it. The the reality is, is like I think you should raise from a position of having a good story heading in the right direction. But this idea of position of power is like crazy.
00:23:43 · Lee Silverstone, Pablo Srugo
[00:23:43] S0: What business is ever in a position of strength? <laugh> . Like you ne you never are. You ne there's always skeletons in the closet. There's always like, you know, storytelling and whatever and all this stuff going on. Like no company is in a position of power ever. If you were in a position of power, like you probably wouldn't need to fundraise that. That's the reality. Like, and I , I don't know, I don't really like it. The the reality is, is like I think you should raise from a position of having a good story heading in the right direction. But this idea of position of power is like crazy. [00:24:14] S1: I'll tell you where, where I think it can apply, but it , it's for , it's, you know, privileged situations, <laugh> , but because you have to be getting inbound to even fall into this. But I have seen this, okay , I've seen it and I've seen it as a difference, especially between first time founders who I think haven't gone through enough cycles to know how fundraising, how hard fundraising could be versus multi-time founders who know that they're not really in control of things. And so I've had situations where I go out to a founder and, and , and I've seen them receive these from others, right? And they don't need to fundraise like they've maybe just raised in the last few months, right? But then they have some inbound interest. And I have seen a difference where first time founders will take , tell those VCs, look, we just raised , like we're just not raising right now. You know , uh, let's chat in a few months or in a few quarters where I can know ,
00:24:14 · Pablo Srugo, Lee Silverstone
[00:24:14] S1: I'll tell you where, where I think it can apply, but it , it's for , it's, you know, privileged situations, <laugh> , but because you have to be getting inbound to even fall into this. But I have seen this, okay , I've seen it and I've seen it as a difference, especially between first time founders who I think haven't gone through enough cycles to know how fundraising, how hard fundraising could be versus multi-time founders who know that they're not really in control of things. And so I've had situations where I go out to a founder and, and , and I've seen them receive these from others, right? And they don't need to fundraise like they've maybe just raised in the last few months, right? But then they have some inbound interest. And I have seen a difference where first time founders will take , tell those VCs, look, we just raised , like we're just not raising right now. You know , uh, let's chat in a few months or in a few quarters where I can know , [00:25:01] S0: Right ? And then the business isn't going well in a few <laugh> and [00:25:03] S1: The business doesn't do as well. Yeah . The macro changes that VC does, two other deals forgets about you versus what I have seen is multi-time founders kind of go back to that and say like, yeah, I know. Like I'm not really raising, like, happy to have a chat. They take the chat and then they just use it to get stupid terms and still raise that money <laugh> . You know what I mean?
00:25:03 · Pablo Srugo, Lee Silverstone
[00:25:03] S1: The business doesn't do as well. Yeah . The macro changes that VC does, two other deals forgets about you versus what I have seen is multi-time founders kind of go back to that and say like, yeah, I know. Like I'm not really raising, like, happy to have a chat. They take the chat and then they just use it to get stupid terms and still raise that money <laugh> . You know what I mean? [00:25:23] S0: Yeah. I, so, okay, so that position of power. Yeah, for sure. If you've just raised money and then someone comes to you and they're like, Hey, I want to have a conversation. A hundred percent. I'm taking that conversation. I'm like, okay, so let's talk, because I'm not gonna tell you what I would raise on again, I'm not gonna tell you what the terms would be . And if you are like, dude, I'll do whatever I can to get into this company and I'll basically preempt your series A, like, why would I say no to that? So, okay, if you're in that position of power, I agree. It's, it's probably a good idea. I <laugh> , I, I changed my mind. I like it. You've converted. Okay, [00:25:54] S1: And then the final tip, we kind of went through this one, but, but it's not, you know what, it's not as common as I, as I think it could be is early days increasing the amount you're raising over time. So when you're raising that first you think you need a million and we're talking like mainly an angel round , maybe some pres VCs start off with two 50 k, get close, then raise it to 500, get close, then raise it to a million. Thoughts on that?