Based on my conversations last week at TechCrunch Early Stage, VCs are very open to first-time founders who can demonstrate more than just enthusiasm.
But dealmaking is idiosyncratic: a few investors might be content to make a deal over coffee, but early-stage teams still need a sturdy pitch deck or memo they can leave behind.
Similarly, one VC may encourage newly minted CEOs to eat ramen and ride the bus, while another might suggest a salary in the low six-figures, depending on geography, revenue, and other factors.
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I asked five early-stage investors to share frank advice for first-timers, and I’m going to save you some time — many, if not most, of you are probably not yet ready to pitch an investor.
If you haven’t already spoken to scores of customers or created a contact spreadsheet for at least 25 investors who’ve backed companies like yours, it’s too soon.
And if you’ve added “AI” to your pitch deck only to make it more appealing, I have some more bad news: FOMO is passé, and due diligence is the new black.
Thanks very much to everyone who took the time to respond! If you’re an early-stage investor who wants to be included in future columns, email firstname.lastname@example.org with “How to pitch me” in the subject line.
Here’s who participated this month:
- Rudina Seseri, founder and managing partner, Glasswing Ventures
- Patrick Salyer, partner, Mayfield Fund
- Josh Constine, venture partner, SignalFire
- Alexa von Tobel, managing partner, Inspired Capital
- Oren Yunger, partner, GGV Capital
Thanks for reading,
Editorial Manager, TechCrunch+
10 years of fintech failure: 3 more ideas that failed to live up to the initial hype
Do you remember P2P lending and on-demand insurance? If not, there’s a good reason: despite a lot of hype, they’re just two of several fintech innovations that fizzled over the last decade.
For his latest TC+ column, fintech consultant Grant Easterbook examined three more ideas “that initially seemed promising, but largely failed to change the financial services industry.”
According to Easterbrook, these misfires offer valuable lessons to today’s founders and investors: “Fintech entrepreneurs must remember the essential principle that the average consumer doesn’t like thinking about money and often wants someone else to take care of it.”
Precision fermentation’s capacity craze: Have we lost the plot?
Foods produced via precision fermentation are in supermarket frozen aisles and fast food restaurants, but when will bioprocessing’s output surpass traditional farming methods?
“Leading scientists and technologists from the industry and academia tend to tell me – often in hushed tones, and sometimes only off the record – that the economics of food-grade precision fermentation is nowhere near competing with commodity dairy or eggs,” says Blake Byrne, a University of Cambridge graduate who’s building a stealth mode biomanufacturing startup.
Instead of “scaling legacy systems,” the precision fermentation industry should invest in applications that produce “radical rather than incremental process intensification,” he writes in TC+.
At 0.69% in Q1, the dip in funding for Black founders ‘no longer evokes an emotional response’
Including seed, corporate venture, private equity and venture capital, Black founders generally receive around 1% of all funding.
Recently, however, the entrepreneurs in this cohort saw a significant decrease: in Q1 2023, “Black founders raised an estimated 0.69%, or just $312 million, out of the around $45 billion Crunchbase totaled for the quarter,” reports Dominic Madori-Davis.
During the same period last year, they raised $1.26 billion.
With such an uneven playing field, it’s legitimate to expect some players to take a different course, which is why some Black founders are exploring alternatives like government grants, “CVC funds and emerging firms in the Middle East.”
Aventurine helps early-stage founders find their footing
Odysseus wandered for 10 years trying to find his way home, which is also about how long a founder can expect to work on building a successful startup.
Like an epic poem, the journey is beset by pitfalls and self-made setbacks. It’s not for everyone, which is why Aventurine Capital Group “gets in early to support people who aren’t natural entrepreneurs,” writes Haje Jan Kamps.
“These people are professors at universities, and asking them to pick up roots and come to where we are, where there’s a studio, is not going to work,” said Joe Maruschak, managing director.