💰 Pre-Seed Fundraising 101
Morning Kernalers,
Summer IG stories are at all-time highs, JPEGs of apes/rocks are outperforming the S&P 500, and the fourth wave is the hottest Jeopardy question at every dinner table this week. Our advice? Hit the "hot" tab on Kernal ideas when you need a mental break. 🙏
Today’s writing lineup:
- Pre-Seed for Dummies: latest tips to score pre-seed cheques.
- 4 Tips for Fundraising: stats and advice to build a 10/10 deck
- Internet Gems: cool stories to hockey-stick your Twitter likes.
Top up the coffee cup and let's dig in: ☕️
👀 Pre-Seed Dilemma for Dummies
Let's cut to the chase. Fundraising is not easy and any Business Insider article that (you can't open on the free plan) says differently is lying. If you chat with anyone founder that's raised a round, they'll have some scars and wins to share. Our hope? Give you the latest trends and tips today, so you're ready to pounce tomorrow.
ICYMI, Pre-seed investing only surfaced as a true category in 2014. It stemmed out of the competitive nature of VCs wanting even earlier access to startups without needing to see a developed product. Since 2014, more and more institutional investors have raced downstream to get a piece of the pie.
But word has spread and some say the pre-seed rules are shifting. With more capital floating and keen founders typing, investors in 2021 may now expect a "clear product that's in or close to being in-market" (ie. in beta). 💸
P.S. in the Kernal waitlist signup, 70% of you voted that you haven't fundraised before and ~25% are actively looking for investors. Regardless of where you stand, we hope this article can be one you flag and come back to.
💎 4 Fundraising Hacks for Founders
We called our friends and did some internet digging. Here's how to position your pre-seed startup idea to land some capital. Let's raise you a kickass round.
1. Build a Product Investors Wanna Brag About:
Steve Jobs proved simple sells, and pre-seed meetings are no different. You need to build a product that you're on fire about. Traction will always win meetings and as soon as you say yes to fundraising, the clock starts ticking.
You wanna make sure you have a product you're long on and a runway that makes VCs brag to their friends and say, "Oh you didn't hear about so and so, round just closed". 😏
Some other ways to build FOMO:
- Post your startup idea on Kernal and build a long list of users & builders
- Give a sneak peek on social or create a witty pinned tweet to lure interest
- Build excitement around the problem/solution early on in your deck
2. Plug into the Founder/VC Ecosystem:
Even though fundraising is hard, the best part is knowing there are 1000's of founders that have paved the path. Secret: a ton of them are hanging out on Kernal. 🤠 — But to score some time with them, you need to apply some hustle grease. Podcasts, private FB groups and even Twitter DMs are great avenues to have a go.
Founders will give you timely advice for pitching, but investors are ultimately gonna make or break for cap table. FYI, Docsend says 90% of successful raises are only 20-40 VC meetings. So treat every chat with care:
3. Find Investors Aligned with your Startup Wave:
When you're trying to find new investor contacts, start with your strengths. Look into former alumni groups, university connections, and even former boards you've interacted with.
The VC world is smaller than you think and as long as you have great character someone would stand behind, you'd be amazed how fast an email intro happens. Docsend claims the avg read time an investor takes on your deck is 3:21 minutes, so the better job you can do at finding investors aligned with your product roadmap, the better your conversions will be:
4. Write a Forwardable Monthly Newsletter:
One of the easiest low touch, high impact ways to build FOMO is writing a monthly startup update. This is for your early fans, curious investors and home gym crowd that wants to chant your idea to the world. Give them a sign to hold.
We've been building our weekly newsletters on Ghost and loving it. Each day we can check our open rate (not too shabby 😎) and see which hyperlinks were most helpful to readers.
Frame the newsletter in a forward friendly manner that's easy to pass around. It sparks conversations with new connections and builds free 2-way dialogue. If you suck at writing, hire someone. It's well worth the cash and you're leaving chips on the table if you don't.
👑 TLDR:
- Build a Product Investors Brag About
- Plug into the Founder/VC ecosystem ASAP
- Find investors aligned with your startup wave
- Write a forward friendly monthly update newsletter
🚨 We Teamed up with DocSend 🚨
The cat's outta the bag... our friends at DocSend were doing too many cool things to not strike up a conversation. One thing led to a next and now you have 90% off DocSend's slide deck software to drum up some VC capital on your Kernal idea.
The only catch? There is none lol. C'mon, it's Kernal. Just use this link to sign up for access. 🌱
Oh ya, the cool thing is that DocSend has kinda helped startups raise $18B using their slide deck info. The tech track opens, views, time/page and many more cool stats that help you refine your pitch. Drop us a note if you like using it.
More Fundraising Resources to Flag:
- 14 Page PDF on the Pre-Seed Round and how to prepare
- Investor Strategy Article on how to nail the pre-seed fundraise
- Free Pitch Deck Analyzer when you're ready to go to market
Weekend Internet Gems:
💼 Startup School LSAT: You can't hire Michael Ross to write your YC Application, but you can avoid these mistakes to increase your chances...
👀 Uh Oh, Joe: Haven't heard much of Joe Rogan likely? You're not alone. The Verge found this Spotify deal might be the case for his decline.
⚡️ Wet your beak in the $2.5B freelance market: we've all got a friend that's the freelance wizard. Well here's a playbook to start building your rep with bigger clients.
📝 Uncuffing the App Store: fellow founders should keep an eye out for some big changes likely to happen to the App Store as a result of a new bipartisan bill in the US Senate.