Ellecoin

Random observation from a founder relatively new to VC fundraising. I’ve only been through a Series A for one of my companies, and I’m preparing for a Series A for another. So I certainly don’t claim to be an expert on venture capital. But coming from a capital markets background, there’s something about the VC fundraising process that I find fascinating. In capital markets, if you want alpha, you do the homework. You research the market. You identify opportunities before others recognize them. You develop conviction, take a position, and hopefully capture the upside. The opportunity doesn’t come knocking on your door with a pitch deck asking you to invest. So why does venture capital sometimes seem to work in reverse? One of the most common pieces of fundraising advice I’ve received is that founders need to proactively reach out to VCs, build relationships, pitch their companies, and constantly follow up. Shouldn’t it be the other way around, too? I’m running two companies. I’ve completed one Series A and am preparing for another. I barely have time to fundraise, let alone chase VCs. Interestingly, the investors who impress me most are the persistent ones who do their homework, understand our business, and add value BEFORE getting an allocation. They’re often the ones who become our strongest supporters. If VCs only invest in founders who are good at fundraising, are they missing founders who are too busy building? Genuinely curious what founders and VCs think. I’m still learning this game.

Feels like 1) startup ideas 2) winners of those ideas are increasingly decided by venture capital. There are many teams building the same product or service however only a couple usually are "legible" to capital. Even customers themselves come from the portfolio of the same VCs and other customers usually ask if "you have raised VC and who did you raise it from and how much" Not to shade on the effort of the founders, it still takes a lot of hard work. However after some time in startups, you notice hat winning does not always have to be painful. Just sad that there are no "garage" startups anymore.

"we're better than them and they raised 3x what we struggle to raise" I dont buy it. teams set out to raise different amounts, and the goals, the ambition and how they think about valuation can just be different. but if you assume more money raised = the better, then the other team is just stronger. if they were below your level, theyd have raised another amount or not raise at all. so if I were you Id ask what they had that got them that round, and you dont. and if you say "it was the network they got from X" - someone might as well say the same about your round too when it's announced.

The fundraising market right now feels as polarised as I've seen it in a long time. It's becoming a story of extremes - either traction or vision. Arguably, this is what venture has always been for. The difference now is how fast the bar for each is rising. Every week brings new "fastest to $100m ARR" or another announcement of a collection of incredbily credentialed individuals raising a first round at a Bn+ valuation. We are living through a technology revolution that is opening the doors to both potential extreme scenarios. And as such, VC is crowding into these narratives. However, history of startups tells us that raising the largest round or having the swiftest fundraise often does not exclusively correlate with the ultimate most successful companies. There are going to be incredible founders building generational companies that do not satisfy this dynamic or the current venture zeitgeist. Such founders who can successfuly navigate this period of time may be the ones who benefit the most by building enduring companies.

VC and startups are basically The Hunger Games personified. Thousands of founders enter the arena. A handful get funded. Even fewer survive. The winners get more capital, better talent, stronger networks, and increasingly unfair advantages. The VCs are the sponsors, deciding who gets resources, who gets another chance, and who gets left behind. And the irony? Even the VCs are competing in their own Hunger Games, fighting for LP capital, access to the best founders, and the few exits that return entire funds. The founders compete to survive. The VCs compete to pick the survivors. The LPs bet on which VCs will pick correctly. And everyone is watching the same handful of winners.

don’t write off a founder for a failed startup. don’t give them extra credit for it either. ask what they’d refuse to repeat, even if their next investor pushed for it.

Imagine having a rough month at your startup & then having to write your investor update. Probably the last email you feel like sending. And when a founder sends it anyway, that says a lot.

One of the hardest parts of early-stage investing is backing a great founder the rest of the VC community doesn’t recognize yet.

The debate about whether founders should meet junior VCs is getting a little ridiculous. A good associate can become your strongest advocate inside a fund. They can also become a partner somewhere else in five years. Of course, founders should understand who's making the investment decisions and how the process works. But dismissing someone because they don't have GP in their title seems like a strange approach to an industry built on relationships. Today's junior VC might be tomorrow's lead investor.

Women now own more than 40% of businesses in America From 2022 to 2025, women-owned businesses grew by 12.1% whereas men-owned businesses grew by 6.3% Markets are changing, with that women can shape what gets built and which problems get solved Bullish on the future

if you’re branded, you can raise $100M+ for your seed round in a single week if you’re unbranded, you may struggle to raise even $2M why? 80% of VCs add negative value, and 80% of VCs are lazy. they ask claudette to pull a list of who’s on your team, then sit in IC enumerating your wunderkammer of IOIs and Ivy Leagues and ex-lab folks, and everyone gets starry-eyed, enchanted by the billions branded teams surely guarantee. enchanted by the thrill of throwing massive checks whilst doing hardly any DD, because, certainly, that’s irrelevant, and these people will figure it out, right? right. and so you run wild with the money. you store it in a grotto and show up at the doorstep of the neoclouds, the governments, the enterprises, with an unlimited rope of credit tied to an origin no one can quite explain some of the branded people will make it & rule the world. some of them are thrilling, brilliant, hilarious people, and for that, I’m happy to support and stand in awe of their success. but they shouldn’t be the only ones allowed to make it. many of the most talented & ethical visionaries I know are stuck in dead ends despite wanting to found, because they are illegible to capital. the unbranded genius has depressingly jagged societal intelligence. she is more awake to the rules of people games than the branded cadre, and yet she is never given a seat to play the unbranded genius is an opsec purist who only chats on signal the unbranded genius is invited to more exclusive parties in her field than many of the branded people, and yet VCs underwrite her network as irrelevant the unbranded genius is told to curate a public persona to seem smart to the salesmen of money. but she has an aversion to being perceived, so she operates almost entirely offline, where no one can ever know who she is or what she’s up to in the valley of automation, she is alone in the unquiet darkness. I extend a branch to pull her up, but every time, without fail, it snaps, and I’m forced to watch her fall into the valley’s maw. she gets chewed up and spat out, but she’s a genius and she’s strong, so she reassembles the bits of herself. but every time she does, it’s groundhog day yet again. and so i'm left asking: how do we brand people without logo stacking? I can’t keep watching unbranded geniuses fall. it’s becoming too much for the soul.

when we raised our seed round years ago, i actually told investors exactly how we *could* fail. i'm generally a no bs person, so i wanted to lay all the cards out. the pitch had 3 parts: -here's what we think this could become -here's what we know so far -here are all the risks for how this company could fail i told them in a meeting, "you could tell me 5 risks you see. i'll tell you 100, because we've done the work to understand all 100." we raised $4.5m a couple of weeks later, and the journey started. investors aren't stupid. they hear pitches all day, and they can tell when a founder is hiding the downside. so if you're looking to raise: don't oversell the upside, and definitely don't hide the downside. honesty wins. — written with @WisprFlow

The thing founders need to understand is that the VC is not ghosting you. Since your meeting, they’ve been pitched by 20-50 other startups. The art is staying top of mind and knowing how the system works.

Over the last few days, I’ve had to pass on several founders I genuinely admired. A lot of them didn’t understand why we passed, so I thought I’d share the 3 most common reasons: 1/ Not enough conviction. As a VC fund, we need to look for strong PMF signals, otherwise investing becomes gambling. In a market as crazy as AI, we need to be more cautious than ever. 2/ Outside of our fund’s focus. It sounds sophisticated, but this can literally mean we don’t understand what the founder is building. A lot of the time, investors will pass on a deal because of their own limitations. 3/ Structural issues. Some examples include incorporation jurisdiction, existing investors, cap tables, business models, founding teams, etc. Some of these are fixable, but it’s often painful and expensive. When VCs love a founding team, they’ll try (very hard) to convince themselves to invest. But we also have an investment committee and LPs to answer to, so underwriting a deal takes a lot more than enthusiasm. It’s important to remember that a fund’s rejection does not always reflect a founder’s potential. Many great companies were rejected countless times before becoming successful.