What's Below in Issue #76:
📰 - Do you love your problem?
📊 - The Rise of Liquidation Preferences in Venture Funding
🎙️ - Podcast #44 w/ Winter Mead, expert guide to mastering venture capital
💵 - Premium startup resources
🆓 - Free startup resources
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Your Pitch Deck Probably Sucks...
For most first-time founders, the idea of a pitch deck sounds easy, but I often get decks with "v43" in the filename, implying it's the 43rd iteration of a deck 😖
Don't be this founder. Collaborate with active VCs on your deck and pay a professional designer to eliminate the guesswork and make a strong first impression when you're ready to pitch investors.
I use DECKO for my clients to ensure I'm getting the expertise we need to get a great deck turned around quickly. They're a group of active VCs who help founders with their decks, you can't go wrong. And you get 10% off with the link below.
Give them a try.
Upgrade Your Pitch Deck with Decko
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Are you passionate about the problem you're solving? Are you great at telling the story about your problem and convincing talent, partners, and investors to join you in solving that problem?
Well, you should know that investors don't want to be pitched and sold for their money.
They want to join passionate entrepreneurs on their journey to success. They want to brag about their investments and talk about their stories. Sure, they have a fiduciary responsibility to their investors to generate a return on their investment, but it's a venture. They expect to lose on most beta and have 1-2 generate all the returns.
This means you need to be great at telling your story about why you're passionate about your problem.
I was listening to Uri Levine, co-founder of Waze, and countless other startups. Uri has seen it all, many failures and 2 unicorn exits. After starting so many companies and sitting on 20 different boards, he knows what makes a winner over a loser.
He simplifies the common denominator to whether or not the founder is in love with the problem. Every company he founded started with the problem not the solution. For Waze, he hated traffic, so he built an AI crowd-sourced platform to solve that problem. He didn’t build an AI platform to find a problem.
Why does this matter to Uri and most other investors? It’s much easier to fall in love with a problem everyone can understand versus a cool solution that is looking for a problem.
Ask yourself, do you really love the problem you’re solving?
How do you really know if you’re in love with your problem? You might tell yourself you do…but do you REALLY???
Here’s a quick litmus test to see if you’re actually in love with solving your problem vs thinking you are. It could mean the difference of years of your life being wasted if you’re wrong about this, so be honest and ask yourself these questions:
- Do you wake up in the middle of the night thinking about the problem? Or do you just dream about being rich?
- Has the problem hurt or negatively impacted you, your loved ones, or the communities you’re a part of? Or are you just riding a trend?
- Do others around you get excited when you talk about it? Or do they tune out or ask questions that don’t pertain to their understanding of the problem?
- Have you convinced very talented people to leave the safety of their previous job, take a pay cut, and work with you? Or do you have to pay market salaries from the start?
- Do you tell a story to investors and have a conversation? Or do you pitch your heart out in a one-way conversation?
If you answered yes to all 5 of the first questions above, then you are on to something. Just make sure that you're working on a problem big enough to build a scalable business around.
It’s one thing to be passionate about helping 3 legged raccoons (full disclosure I love raccoons), but it’s going to be an uphill battle to raise millions of dollars and build a Unicorn company solving this problem.
Reply to this email or message me on LinkedIn if this message impacted you in any way. It's always better to feel like I'm conversing with my subscribers versus just sending emails into the abyss.
-------------------------------------------------------------------------------------------------------------------------------------------------------------Data Corner
The Rise of Liquidation Preferences in Venture Funding
In venture capital, the standard liquidation preference is 1x, ensuring investors recover their money before others receive any cash benefits in liquidity events like M&A or IPO. However, in today's turbulent market, higher liquidation preferences are becoming more prevalent.
The impact varies depending on the company's stage and the type of funding round. Early-stage rounds (Seed & Series A) rarely see high liquidation preferences, but bridge rounds have experienced an increase over the past two years.
Growth-stage rounds (Series B & C) now encounter high liquidation preferences twice as often as in 2022. For late-stage rounds (Series D and beyond), the data is mixed but indicates a rising trend. Founders should anticipate negotiations involving 1.5x, 2x, or even 2.5x liquidation preferences, especially in bridge rounds after Series A, as investors hold more negotiating power in the current slow fundraising environment.
-------------------------------------------------------------------------------------------------------------------------------------------------------------Discover How Winter Mead Helps Emerging Fund Managers Thrive at Coolwater Capital in Episode 44
In this episode, Winter Mead, CEO and founder of Coolwater Capital shares his take on what it takes to support emerging fund managers. Coolwater Capital serves as an accelerator for emerging venture fund managers, offering training, resources, and a supportive cohort model to help them successfully build and scale their firms.
He has influenced over 200 fund launches and continually adapting to the dynamic needs of the venture capital market. We discuss the latest trends in VC funding and the types of fund managers that are currently securing funding. He points out common pitfalls that new fund managers should avoid. Winter also explains the cohort model used by Coolwater to support fund managers, emphasizing the importance of information sharing and strong networks.
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Free Fundraising Resources
🤓 - Free pitch deck reviews - Submit your deck
💸 - Access working capital fast - Explore options for free
😍 - Free list of AI Recommended VCs - Apply for free
👨💻 - Free fundraising coaching session - Schedule 15 minutes with us
📝 - Playbook for Negotiating Term Sheets - Download it Here
💽 - Playbook for Setting Up and Sharing Your Data Room - Download it Here
✉️ - Playbook for Sending Investing Updates - Download it Here
Premium Resources
Your pitch deck built by VCs and designers
🗓️ - Book a one-hour private capital strategy call - Book Now
💫 - Pitch deck design services for founders by VCs - Decko
💼 - Startup Legal Services - Bowery Legal
📚 - Startup Friendly Accounting Services - Chelsea Capital
Download Your List of Targeted Investors:
- Access to VC firms' team tabs to see active partners of the fund & their LinkedIn
-
Navigate a VC's portfolio to see relevant portcos or competitors, quickly find their founders on LinkedIn to connect with them, and request warm introsA downloadable CSV with the investor emails & LinkedIn URLs
- Ability to filter your matches and adjust your profile
-
LiteCRM to track your progress
-
Request intros to VCs directly through the platform
- Get our fundraising guide on how to increase your odds of getting a meeting
- Upgrade to lifetime access (one-time fee of $497) and get a free coaching session
Upgrade Now for $59/month
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Let's stay in touch:
- Written by Jason Kirby - https://www.linkedin.com/in/jasonrkirby
- Subscribe to our weekly newsletter for market and industry news and tips when it comes to raising capital and growing your business - https://join.thunder.vc
- Seeking to raise capital? Get your list of target VCs by creating a free profile here - https://web.thunder.vc
- Looking to raise debt? Explore tailored debt options for free by completing a profile at https://debt.thunder.vc
