Dear Fellow Founders,
As an early-stage founder, everything moves at light speed. More often than not, speed and execution are critical when establishing traction in the market and outflanking your competition.
However, one of the slowest processes you'll encounter is that of fundraising and due diligence. The average founder spends about 80% of their time raising their first round — and that’s 80% you could (and should) be spending building and selling your product.
Picking the right investors, particularly at an early stage, can make or break your startup. This series will explore how to approach finding the right fit when considering investors and maximizing the efficiency of your fundraising process. These perspectives are from my own experience as a founder, and I hope they’ll help you in your journey.
The first perspective is this:
A fast "no" is almost as good as a fast "yes."
Investors come in all shapes and sizes, but early-stage investors are a specialized breed. As a former GP and LP, I’ve seen firsthand how different the mindset is between late-stage investors (Series B and beyond) and early-stage investors (Series A and before).
One of the challenges you’ll likely face as a founder raising capital is this: many investors bring a late-stage mindset into early-stage investing. Here are two examples I see regularly:
1. VCs that inaccurately position themselves as early-stage specialists.
Over my 20-year career, I’ve interacted with dozens of funds that do this — and it’s always frustrating.
They’ll respond to your cold outreach, listen to your pitch, watch your demo, try your product, and then tell you they only invest in companies with $3M ARR or more.
Colossal waste of time.
Most pitches are 30 minutes, and many founders I work with have a tendency to want to dive right into their deck. But veteran founders approach this differently. If I have a 30-minute meeting with a prospective investor, I spend the first 5–10 minutes learning about the fund, their thesis, what they look for in investments, and the specific criteria that includes or excludes startups from eligibility.
Beyond the general “tell me about your thesis” questions, here are three specific things I always make sure I know — either before I pitch or early in the meeting:
a. What’s your average check size, and do you lead rounds?
This matters. A lot of funds don’t lead, which means they only participate after someone else has reached an agreement with you.
Also, if you’re raising a $2M round and they typically write $250K checks — even if they say they “lead” — that might not be meaningful enough for them to earn a board seat or drive momentum for your round.
b. What valuation range do you target?
Most funds want to own a specific percentage of equity. So if you’re raising $2M and they want 20%, they’ll either need to cut an appropriately-sized check or force you into a lower valuation to meet their ownership target. If that math doesn’t work, you’re already misaligned.
c. How do you work with your founders?
I tell GPs up front: I’m not looking for dumb money.
I want to know how you’ll help us win. Can you make intros to customers or partners? Can your back office help with our finance, taxes, or marketing? What kind of mentorship do you offer not just me, but my operating team? I try to make sure my direct reports have strong mentors too — not just me.
If I like the answers, I will move forward. If I don’t, I politely end the call. In my career, I've turned down almost as many investors as have turned my startup down.
My pitch structure:
- 10 minutes learning about the fund
- 8 minutes on the deck
- 7 minutes in the demo
- 5 minutes for questions or buffer
I’m not trying to “close” the deal on a 30-minute intro. I’m trying to figure out if there’s real conviction and if they’re the right long-term partner.
2. Some investors drag out their own process endlessly.
Something first-time founders should keep in mind: the level of effort you put into an investor needs to be proportional to their seriousness about investing.
Sometimes investors who write $25K checks cause $500K worth of problems — especially when they don’t understand that early-stage startups won’t look or act like exit-stage companies.
Here’s one hard lesson I learned the wrong way:
A few years back, I spent almost four months talking to a fund that said — from the very beginning — they wanted to lead our round. One GP was super supportive. The other sat there like a dead fish, brought nothing but skepticism, and clearly thought he knew our market better than we did.
That should have been the red flag.
But I stuck around because the first partner kept saying she was “in.” They promised a term sheet “next week,” and then… nothing. No next steps. No clarity. Just vague delays while they “did diligence” and “formed a perspective on the market.”
I took them at face value and paused other conversations.
Weeks turned into months. Still no term sheet. Eventually I realized they weren’t serious — they were just using us to gather market intelligence. Once I saw it clearly, I cut them off and went back to fundraising.
That reset saved our process.
Great VCs are professional decision-makers. They ingest a ton of data, make fast decisions, and adapt even faster. GPs like Vinod Khosla are legendary for this. And I believe great founders have to develop that same skillset.
I had to learn the hard way:
If an investor can’t decide in a week or two whether they’re in, it’s probably a no — even if they aren’t transparent enough to say it.
By cutting ties with that fund, I was able to regain focus and get our raise back on track.
The Bottom Line
For first-time founders, the perspective I’d offer is simple:
A fast “no” is almost as good as a fast “yes.”
A slow no can kill your fundraise. Early-stage founders have to move fast, and great early-stage investors move fast right along side them.
If someone tells you “we’re interested, but we need more time,” ask yourself whether they’re moving at the speed your business needs. Don’t mistake vague interest for actual commitment.
Slow no’s aren’t neutral. They’re corrosive. And they compound when they take your focus off of the real work: building, selling, and leading.
I’d love to hear your reaction to this — and what other lessons you’ve learned on your fundraising journey. Let me know in the comments.
Thanks for reading,
Collin
