What's up, everyone? This is Anthony promptly on. Oh, many of, you know, me as Pop. You're listening to the pump podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So, it would mean the world to me. If you would subscribe to the show on your favorite audio platform, watch episodes on YouTube and tell your friends and family about the podcast. My goal is to help Millions learn from the world's most interesting people. So let's get into today's episode.
The Following episode is with Peter Pham, the co-founder and managing director of science. An incubator based in Los Angeles in this conversation. We talked about the art of fundraising for founders with startups this includes what materials to use the timing and process you should pursue how you can create a bidding war and why up and to the right charts or so important science is incubated companies like Dollar Shave Club, Liquid death and many others. Peter is one of the best fundraisers that I've ever met and he drops insanely.
Valuable information in this episode. So I really hope that you take notes and you take away things that you can go Implement tomorrow. Here is my conversation with Peter Pham Anthony, Pamplona runs pomp Investments, all views of him and the guests on his podcast, our sholay, their opinions, and do not reflect the opinions of other investment. You should not treat any opinion expressed by pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal.
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So Peter and I met a couple years ago, we were in Puerto Rico at a conference. I don't know if I really cared about the conference or he did. I don't know how either one of us got there. We looked at each other and we said, hey, you want to go get dinner and went and got dinner and about 3:00 in the morning. We were like, man, we're still not at dinner but we are dancing drinking having a blast all throughout Puerto Rico, and somehow we stayed,
Friends, which may be a testament to you. And along the way, I've watched you do some incredible things. You run a product studio for the sitter know, science is probably the leading product studio in the country, and you guys have incubated Dollar Shave Club Liquid death many. Many other companies can't just tell us the Dollar Shave Club story, first specifically between great marketing, great product, and funding something that was different and you had to do a lot of work, I think.
To kind of make sure that you guys have the capital, you needed to scale that to a billion dollar business. Yeah. So
raising money. It turns out I'm just really good at it. I think
I put the microphone like raising money is fairly
easy to me now mostly because it's repetition, right? I've had somewhere between 7 to 8000 knows at this point in the way. Science Works, everyone Venture fund. La, I helped our Founders raise money so we're basically helping them cope on the business. They move into the offices and It's a Grind.
So Dollar Shave Club friend of a friend introduced us Michael Devon and we'll get to liquid effort. Similar story. He worked at an agency, Super Creative had this crazy idea through a random friend of a friend ended up with the Lily Warehouse, full of razor blades that was being stored at a church. And I think that you got a good wind back, the clock a little this is nobody had ever shipped. There was subscription, did
It exists on online. Right? It was built on Magento. So this is pre Shopify, right? This is like stripe had just started and nothing existed for consumers. Buy stuff online to get shipped to the house.
So here's the pitch Dollar Shave Club today. People go the razors at the CVS and $30. It's locked behind a cabinets, you feel like a criminal? Now, I'm Seth if it gets you buy eggs is behind blocks. And we're going to shift the consumers direct but humor drives everything. So my basis of everything is always culture. And he is just funny and creative and that video that original cost sixty five hundred dollars. All right,
YouTube adjust. This is like early you two days and ideas was like, well, can we drive our reality? Let's put the video on the homepage.
Him. And I actually argue to, like, 5:00 in the morning on launch day homepage autoplay homepage all please, like, absolutely not, absolutely not 6:00. In the morning, he relents you put on the homepage autoplays. It crashes, the servers in that, like, that was the moment, right? It's like that's for me, the moment and understanding, like, okay, social drives Commerce, so back. Then the idea of raising money for the video and selling resumes online, we got knows everywhere here.
In Green at Forerunner. She hadn't even closer fun yet. I begged her to invest Eileen who essentially is Cowboy Ventures. Now, she was at Kleiner, big tournaments, 250, 250. I didn't think it'd felices Ventures. Like these are some of the best firms today. Thanks. He put in 100, the rest was like begging and stealing. 50 thousand, 50, to raise the first million, and I went through 75 to 80 nose and like these are personal friends of my, trust me, this is gonna work this going to work.
So that first million, right? And so it's one of these things where you just got to hit it over and over and over and I now, raising money for me, is, it is not personal when someone says no, it's just not for them. That's okay. Like music I went, I was like gospel last night so they close at 4:30. I don't know why you the dance music are you don't write? You hear a song? Like oh who is that? I want to listen to again Who's the artist put on my playlist?
But then you hear songs like that's not me. Like Metallica is no honey. They're clearly the on the best heavy metal as the world. That's okay. And I don't want that investor. So when people say no, that's okay, wake up. There's always another another, another
I know you were out late because I was in the WhatsApp group all your planning, and then I saw, I got removed at 12:30 while I was sleeping. I was like damn, they're still planning a lot in there. I guess there's only one 3:30, I'm from l.a. So
Let's talk liquid death. I think a similar story and what's interesting is you called me and were like, Hey we're going to do water in a can and I said Peter, I love you. No, that's stupid. And then you were like, no pomp seriously like trust me. And I was like, hey let me think about it and then I saw you in Austin, Texas South by Southwest plane and I were both there and you literally had a cooler of liquid death that you were carrying around. You were handing them out to people and I'll never forget we were in a bar and you handed
Both of us, she drinks low. So we're leaving the bar. She still had hers and we went to leave and the bouncer was like, hey, you can't leave without
qahal and it hit me. I was
like holy shit. Every single person is going to think this is alcohol but is actually water and then you explain kind of social component of you want to look cool at the bar. You don't have to Dasani bottle but whatever what was that fundraising experience like because it took me.
Well, multiple times and a personal relationship and you basically twisting my arm. And then if I was like, I
had some of the angel investor in ring and Jamie siminoff I called and I said if you invest ice, it's all interesting. I did it for because he made me money.
Yeah you didn't offer me this Del go
ahead and I said if you invest I will personally guarantee that you will not lose me. I will I will write a check out of my pocket. If this thing doesn't work, please in the sand. So I knew so my things about culture.
Just honestly, why I excuse, why go out last night is understanding in the moment when I got pitched. This idea, I was doing the similar talk for Snapchats accelerator, so that's P. Gold asked me to, like, they were doing early days of their accelerator. He talk to entrepreneurs, how raise money and it's got Michael, who's running the accelerates. The hey, there's a company that applied, it's not for us for Snapchat, but I think you'd like it liquid death. Here's their Facebook page and it was just reading. It's a image of a can
An on Facebook page and a fan page and people just commenting how stupid it was. This is idiotic, Etc. And I just knew it was gonna work mostly because I have the experience of dollarshaveclub.com be works and just is this video where someone's like liquid death it murders your thirst but here's how water kills. You water boarding surfing drowning like people die with water all the time. Let's do liquid death it was just this funny commercial. We're live at the end of it.
She's waterboarding, somebody right dark humor obviously, and but we just ban plastic straws.
That Lana could just wrote an article and how China's that buying our trash anymore to recycle plastic bottle water. Bottles to me, were like, the Next Generation cigarette butts like, you why? And I don't drink right as much as I dance. I shal drinks. And I think we did just become legal, in Denver was like, psychedelics, like new friends are doing shrooms ready. And beam is a party. I go to EDM is like nobody's doing alcohol, it'll work. Pitching liquid doesn't can that's insane like
It just didn't make sense of people because it's a two dollar can of water, but for me, but once I had invested, I
think that maybe it was, I was paying more attention. But also, they started to kind of figure out like they literally were building a cold and we've heard from a couple people in terms of like, really, really doubling and tripling down on the people who believe. And so people are getting tattoos. They were taking the haters comments and turning them into rock songs, like they really went and we're like we are going to build something that people.
Feel an emotional connections. Yeah it's
if you look at today's culture we have two sides right? People just automatically pick a side just like human nature and if you know what you are and you own it, people respect that way, way more. Right. And you pick that side. We pick one side like it's fucking funny. You know who's our audience? People who don't take themselves seriously that's it. Some people take themselves too seriously and they don't like it. That's okay. And so Mike Cesario.
All shaped of, right? This is liquid ass off of my both works at an agency, both the creative work. Both have this crazy idea while working at a creative agency, say, hey, all he did, was he was making these commercials for like brands that were good for you. But it's always extremes and grass and it's like, well why is it red ball? I'm Taco Bell on in Mountain View just like those worst thing for you. The world with like exciting. Why would make something good for you? But exciting. And also by the way, if you think about the biggest impact that
Like, like, my stress is always Tesla, the biggest impact is they made Blackjack cars. Cool. Guess what? Every manufacturing world is now, we can let your cars. We're making their Vision can cool water. So, it's not that look, we'll sell hundreds of millions of cans, and eventually billions of cans, but Coke, and Pepsi, produced like a billion, plastic bottles a day, right? So culture,
To your point. Why? This over time the seed round million dollars in vague still look at this point, I have a fun. So we funded it in every single round got harder and harder and then it got easier like everything else. Right? And what I say is fundraising, is the world used to look like this. So the tips of always fundraising is
The format is the world used to be like this.
The world now has this.
I'm building this thing that's taking advantage of this in. This is how the world will be over here,
right? So think about this again. So, this is the format that you guys use in the pictures and in the decks. And just for context, when I say that Peter is one of the best fundraisers. I know, any major Venture fund is probably invested in one of the companies. Literally, he, many times goes and raise the money, not the CEO of the business, because he is so good at doing it and it's the same exact formula. Every single time I
get my favorite was, I was in bench. All sitting up there. A reason for that.
VK and Benchmark. And Bill girly looks at me and goes, Peter, what are you doing in the meaning? Like, like, you know, what you're doing here as first-time founder, like, I'm here to translate have the questions you ask, you doesn't even understand right and Bill girl, eventually vessels on the board. We merge with Rover, it's not public, but it it's a communication right there. Asking questions I can read it. I know exactly what's happening in the room. What questions? Why they're saying? No, I can read a no mile away.
It's always, but think of all the biggest companies in the world it was before Uber, right? It was well, the people call taxis but because of cell phone and GPS that smartphone, I can now hit a button and then people cars will come and because of eBay because of this idea of an honest person, but well, we'll have five star reviews this person. I'm going to start trusting right. Actually think about like boobers in the doordash and lift actually eBay. Started it. Oh this is an honest person loss reviews, five stars
Awesome money. And they might send me stuff. Uber the same thing, right? And so this is now how the world looked liquid death? Well, the plastic water bottles alcohol. The world now, doesn't want plastic. They don't drink. They want something fun. And it turns out the inside of this, and I've handed out personally,
Somewhere between eight, nine thousand cans out of my hand. Is that when you hold it, people talk to you. That's it. When you hold this people, what's that? This is either the stupidest idea in the world. Oh my God. That's so dumb or it's funny, and it's awesome. Right? And that's it. And so this stranger, we're not talking about the weather anywhere, went on it. What you do during lockdown, like, what's your story of? What do you do, which is fucking terrible question?
What's on my something funny, you know, like human, that human interaction of haha, funny connection. Well, pavlovian response is when I'm at a concert right where the official waterfall Live Nation. When I go to the concession stand, I'm just, you're just thirsty. You're not actually caring. What want to grab a Coke? Nobody talks to me. Grab Bud, Light, definitely. Nobody talks to me. Like I'm a liquid us. That I always meet somebody funny and it's fun. We're not so that right? So cultural insights. So telling that story and showing people in the reaction,
That's how you kind of get the story told in fundraising, is how the world was, how the world is now? What's happening? And how am I taking advantage of that moment? This is where the world's going to look now the secret of all fundraising seed. Otherwise usually pass CC, it is obviously the worst thing for your pitch is numbers. Everything is worse. Once you actually have Revenue because now I'm driving, let's do multiples. And so you just kind of casual like
Story telling of a story, it's almost storytelling. And if you tell people, I hate this like oh and I'm a seed company. Here's my Revenue, five years,
I know you're making shit up. Why are we making? Why we making shit
up, right? Tell me a bigger story. In fact, you might be limiting yourself. So the with the secret is you say oh I'll be doing two hundred million dollars in two years like so. Now as an investor I'm like, oh so that's half of what if that's too small for it. We have this whole serve a Masa and SoftBank that's way too small.
Let me give me the tools for my imaginator, my imagination to run wild and oh my God, you know, he doesn't know what I know and if I invest, oh, it's gonna be so much bigger than that person. Knows that, that makes me feel like I want invest, right? So make sense, like, almost in a way, kind of taking advantage of Young, Buck over here. Let me get some money and he doesn't know what he's got, but if you, if you tell me what you got in, like I get to judge, like too small.
Always and fundraising. There's three things, people always Focus for me. As always. Always tell people focus on the three things. Meaning you have a bit current business, whatever it is, if you are in the moment where you actually have users acquisition retention Revenue, strip yourself back as a founder and say, three things that go up into the right. When I say up the right, if this link, this is what it called. Linear this flat linear flat is
I'm doing a hundred thousand dollars in Revenue month. Every month. Like wait, call me back in 12 months. Maybe 1.2 million. Well, it'll completely more expensive course, that's fine. I will, you tell me I'm going to reduce my Risk by 99%, right, reduce my risk in Pay 2x all day. But if I tell you my Revenue was well, six months ago has hundred thousand dollars and four months kills. 250 last ones like 800
I can't mathematically calculate what's happening? 12 months. So I have to go. I have to invest now some extent. So but it doesn't always have to be Revenue.
Look at things. So hold on. These are like, insights that he can unpack, very deeply, the a. So, the idea of creating urgency by having charts, they go up into the right one coming and it doesn't have to be revenue is explain this
more later grip. It can be correlation. So Enterprise sales, well used
Take me six months to close the sale. Six months ago, six months. It took six months, three months ago, we got it down to like a month last week. They people are like clicking on a button and signing up automatically without talking 20, something right? Like something's happening every snares. Like, well, users used to use the product six months ago, they'd come in and they'd use a product like two minutes.
Three months ago, 12 minutes last week like 48 minutes. I don't know what's happening, right? You tell them what's happened, but in a way right? You're showing that if I give you money, if I as an investor give you money what's your job to get smarter and faster, right? And what's great is as an investor oh you took you took his money and got smarter and faster and I get to jump on the coattails of that make sense. So it makes me feel like
All right, I didn't do a third last round and instead of me thinking that investor got a better price to me, it's like no, no, no. I got. I'm riding the backs of that last investor who took all the risk in that Founders. Now figured a lot of shit out. And if I give them more money, that means they're going to continue this acceleration path of figuring it out. It's faster. So velocity called velocity. Any magic in your business. Matt doesn't have not be Revenue anything that has velocity, right? So Enterprise sales to Consumers.
Her products. It used to take X. Six months used to take this long to do this thing three months ago and a month ago. And I was still finished for the next 30 days. If you just do that thing manually, I don't care. If you've got to go flyer cars and talk to you, you need to increase your retention, called your customers investor. I didn't know that you physically called every customer they just don't you just start coming back.
I do the hard work right and I think Kat said the thing, do the hard work you better know the entire stack the whole experience but find little gaps in that business where you can say, the whole team's going to focus on getting people to spend more money for get new customers. I want to know
People who spent money last month? Did they come back and they refer a friend? Fine? Convince everyone, referral six months ago, two percent people would refer friend three months ago. Fifth you know, for last week I don't like 30 40 percent but acceleration velocity velocity because it doesn't have
to type the revenue. So there's the story of acceleration. But what about the visual death in the deck? Which is I think one of your greatest hacks explain
this. So right linear
Is flat meaning like I said, 100,000 hundred, 200 cumulative came? Like I can predict this that acceleration. Curve six months ago used to take this long speed speed speed and all of a sudden think my gosh like if I don't invest right now in three months, they're going to figure that out in the conversion is going to go up to 70% right in. Like they'll be such an obvious investment. I can't miss out, fomo is real.
If this goes to the point of when you read a room and investors, if they do not respond 24 hours, they are not dangerous.
Think about all, like if you met somebody out last night, if they took, they don't touch you, you know, for a month, are they interested in here? No, of course, not like, if they're liking your Instagram photos, like that night, that's good, right? And I'll take any signal, I will take any signal of investor interest within 24 hours. It could be a retweet. It could be, they checked out my LinkedIn profile. Ideally they
Email. Me thanking. Me asking me follow up what questions? Right. The reality is when investors say, oh, it's too early. Oh, you know, come back when you think your son's just trying to be nice by or 24 hours, we're not that busy. Well I am most PCS, they're not that busy. Think about it. How Investments do they do? You're telling me you do six a year and if you're really really interesting you can't like text me email something in the next day.
Say that you're right. They're not the moment you definitely something about you, so they're done, don't waste your time move on. And so that's the pace is. I don't get drowned out and Chase and spend some people spend so much time. Chasing the, no, it's not going to happen. Move on, right? Then you start just like everything else in the real world. Yes, that looking
desperate came over. All right. So you know, you want to go fundraise, you come up with a story, right? You've walked us through that formula, you make your deck deck. Looks
Pretty anyone who wants to hack the number one fumble metric in any deck. You can put your little bar chart and then just put a big fat fucking arrow on top of it and really Hammer home. This shit's going to the oven to the right works like a charm. You can even before you get mad, squeeze it. Remember in college, where do you like widened the margins and shit. So that you could get that three-page paper. When we really only wrote two and a half, you can do the same thing. Yeah. Look good. Humans are stupid. No, oh wow. That's a really steep.
Curve, it's all storytelling right now.
Of course, people always think it's not fraud. You just have to tell the story, find things in your business that are just moving faster. Whether y'all used to take you months to recruit somebody and it's fast everything just fat, everything just feels faster in the business. And again let me make the, you know, this connection. Like user growth is connected to this velocity. That's really have never figuring out on the busy. Doesn't matter what it is, but there are moments in the business.
If you focus on it, you can show me this like game. Especially this room is all early stage seed. There's no numbers. You have no numbers, nothing. Ruins a raised bed of the numbers, like, just remember that nothing ruined the raised better than numbers. The moment you have users, it's like great customer acquisition cost retention. Like I should start digging in on that actual number, but you start talking about your user experience and how again you you're getting smarter and faster around that customers getting to that.
Work or driving the time. It takes for customers to consider the purchase right or the time. It takes for them to refer the time-tested renew. The number of cancellations got reduced, whatever. It is like these are the things forget, the topping focus on the underlying part of the business and then less is more every deck I see every single day. Their nose.
Like, 20% less words.
Let's it like nobody wants to read. It's the telephone game. If you pitch me, no matter what I need to tell somebody, I need to tell somebody the story, and if it's a lot of words, I'm not gonna remember it. Like it was just, and then I start feeling stupid. So think about that Telephone Game means when I go home, really, I'm out and networking. I talk to my colleagues, my significant other at different partners. I need to explain why I'm excited about this deal.
And if it's not simple, couple people fish me in, like, what does it do in the using all these buzzwords buzzwords? Like, I don't understand. What do you do? How do I explain the elevator pitch is really about. If you can get it concise, I can then go tell somebody else, that's it, just member telephone game, is they have to tell somebody else if they can't tell their partner, what why they're doing? The deal with the company is they're not gonna do the deal and the moment they feel stupid again. The moment they feel dumb,
Because someone says well what about this? They don't have to answer that like oh yeah you're right. It's not that good with you like anyways, so simplify less words, the deck just short ADHD use chat GPT for god sakes. Just like shorten the thing up bullet points. How the world used to be, this is what I'm taking advantage of and this is the way I look at the world.
Here's why my badass this goes back to early stage super early stage. The founder of the founder of the founder, your product will evolve. Why are you a badass?
I tell people why you been asking why I was here, why is your team about us? And that tells me that you're going to be figuring shit out, like, you will not survive. If you can't figure things out, I'll stay. I met NBA player last night. It's like, I love athletes Olympians. They want Olympians training caught, like the whole lives for this one day, and then they're done. And wait for years resilience has nights like eat resilience has to show up.
Not personality trait right cat yesterday like top all Brazilian that inspiration is like instantly. Tell me your story. Why? And then everything else, like doesn't really so much matter because if you tell me your story, why you and then show me that your strength when people give you money, you figure shit out, you're smart, you figure it out, faster, faster, faster. It's like okay that's somebody has your
back.
Once you have the deck, the story, the great graphics, what's the process? How do you create fomo? How do you make sure you're talking to enough investors? And what does that look
like? It's changed. I think posts Kovac because of Zoom. So used to be that if lots of Sand Hill and you can only kind of knew everybody every firm make and like red points next to the Sequoias office and I vp's upstairs got metals are very I can schedule them.
You inspire drop across streets and decent like this is loop for now, I'll Zoom. The assumption is Will usually call every 30 45 minutes. Remember then bester, you also have remember, which also means that investor that pitching has a little bit more fun with these days because the assumption is
Once I hang up the zoom this person is pitching 10, 15, 20 people day, right? All of the world. So the process for me, is still relatively pitched early call at Friendly's people that I wouldn't take their money, they're not that great. But like they're going to ask some good questions, some dumb questions and the goal is after every meeting. What was the question, you can kind of, see emotionally, they got hung up on. How do I enter that into my story so that it's answered, let's super all simple.
It would not have people either. What were the question that they got hung up with? And I felt like I spent too much time explaining myself, how do I incorporate that into the store in the deck. So that question doesn't come up, we get that right because the whole goal and then if you get an hour, 30 minutes, if it's an hour, get through the store in 25 minutes. Ideally so that the rest is just the session. It's just get through it. But if you're all the way an hour and 58 minutes and you're barely going to the last slide,
It's not going to work, you have to finish early, which means your you were concise, 20 slides, 25 minutes ideal, like 1716 slides, 25 minutes. Like, you know, you're just coming through and then you're inviting questions when, you know, their layups.
But if you get questions, they're like I don't know what about this? One of those, you know I used to figure out put that in the story, early answer it, put it in the deck. In the goal is early investors that you wouldn't for you to take my firm or really small checks, they're going to you're gonna get all kind of think of like to be honest. So they'll have the same questions answer that and then second thing slow Investments so there's slow yeses and fast. Yes investor
Again, I've pitched every single firm every day. I know, every GP, every firm, I know the personalities. I know the slow people that fastball pitch to slow people first obviously because it's a, it's a horse at the end of the, at the end of the cycle, I thought, 30 days, give yourself 30 days to pitch 30 days of clothes, going back to the three points that are open to the right, whatever those three data points that you do you spend 30 days getting it there.
But you got to make sure for the next 60. They continue to go up into the right, okay. I repeat the next 60 years
while a full update.
30 days, why are you raising? Well, you know, it used to take this long and then this long but the last three days it's like it's really
exciting. It's all working it working. So, you know, I
don't. So I should raise the money while I'm pitching during the follow-ups that week. Next week, there's reasons for the Fall Out, Boy.
Got you know, you met 2 weeks ago and I told you that conversion funnel and retention went from here to here. Now it's this.
Almost starts kicking in. So that makes sense and then term sheet diligence is 30 days. It better keep going because you won't get to the last money in the bank is what you need. 30 days of grinding that data 30 days. As it's coming up your pitching every week. There's something interesting new, I feel like I'm missing out. It's going to get away from me. I give you term sheet, I feel good, we're talking the data and the things are still feel going up during that.
If it's still going up, I might start trying to bring more people into the realm. Like, give me motivated giving to the story. So, that's a really important thing over the next 90. Over 90 days, slow investors, fast investors. There are some people who are, like, yes, let's go, but you don't want that. Yes. Now you want it when everyone else is at the same thing, to imagine a horse race, some horses, start off, slow some fast, that's the ones goes, first fast ones catch up so that you're all kind of finishing.
Close at the same time. Your negotiation window for a term. She is at most two weeks you are rude and an asshole. If all of a sudden you're like I give you a term sheet and you just don't answer. Well, here's how you slow game the term sheet.
Very simple. Let's get to know each other. Hey this is marriage. Can we go out to dinner? I can't this week next week, like think of all the things of like you, you gotta say, you have a week, two weeks Max. But you cannot just sit onto a sheet because Birdman hand, right? Like what if everybody else says? No. So you, but you want them all to getting the same point in all of a sudden you can starting if you want to get to the point of negotiation. Otherwise I will say this, do not over optimize for
Starts to Binary when I say that either exits or it does not exit, you did not start this company because you want a job for the next nine, eleven years making 125,000 year, like, right.
The difference at the end game is if you made a hundred million dollars.
Well, if I didn't take that dilution, I would have made 119 million dollars. It doesn't matter if you really mattered, you wouldn't live in fucking New York, you'd go to Florida.
True. So think of that dilution. So people folks so much do the spreadsheet? I was encouraged down there, see this the like oh, Thurston delicious too much. I really don't 25. It doesn't make a difference. Your personal spreadsheet, your Equity over round seed ABCDE,
At the end it ends up being like 12 percent. It's not that big of a deal, right? So the best investors at the table because they will help you. Their job is to help you raise the next round. The next round, the next round because you are always be raising, always, always, always be raising rights, like ABC is always be charging.
Closing always be raising. So, the pace is the really important. If you want this Collective pressure at the end, I'm also talking this firm almost talk to this firm in. Once I know you're talking about firms over once I finish, I want to close. If I know I'm the only investment fund
I get to negotiate. I slowed down my decision, process ball
contracts, walk and show you their blood. Um, obviously it helps to have a good product, a good company like it gives you the data, it does. All these
things early stage. Look, watering can, it's the story. The story and belief, the team right in some things that will tell the story of why. Now,
Advisories sometime work I can't. It depends on investor some investors love that you have. Advisors, I hate it. This is bullshit. Unless it's real, right? If it's somebody I know or somebody who truly has that Insight or has the connections that can accelerate that business, it's the cheat code, so, and so's on my board. So, and so personally, that's is so I used to work for something. So like last night's dinner, the moment, he told me he was on Family Team butcher box and then he's building this company.
Really like yeah, let me give you money
like no, yeah, I know I love the
company. It's storytelling but it's understanding the business and say oh why this person? Oh he's done it. Been there for one of the fastest growing companies. I know in the Commerce in space.
The world used to look into this, they show through all these things, he helped figure all this stuff out realize well that should just be a separate company and if that's a separate company and here's the benefit for everybody else, oh, the world is like this. Now with this, give me money, some building, this simple like Lily is. That's it. That's the story. You just want to heat up persuade, it's not about
numbers. So
Let's say that you're great at this and it works. Now, all of a sudden all these Venture funds want to access, and I've seen this one time I was working on something. It was the number one app in the app store and it was right. Yes, I knew it will forget. That would only be. And so Venture capitals were literally sending this is a true story. A pie
To the office with a note that says we would love to get a piece of the pie.
Real clever. I mean, like, that's the shit that was going on. Right? I've had I've
no stores where like built they'll send the private plane at the whole thing. Yeah,
they will show up. They, I mean, when it's game time and there's competition between, especially the major firms, they will pull every single thing out of the repertoire to impress a Founder etcetera. How do you
Enjoy the perks, but also balance, not getting caught up emotionally and potentially making a bad decision or going with a investor that might not be the best one out of those that are
interested. So investors the whole your job as a Founder is obviously the funding company but honestly, it spending more time on thinking about
What's the possibility this person being - okay, like boards? The the board their job to remind you is to decide. Is this CEO doing their job? In should they get fired?
Board meeting. This is what I'm going to tell you. This is how the company's doing. This is what we're going to do before. Now in the next board meeting. Next board meeting, I told you what I was going to do in this is what we did. If you three strikes you're out, if you show up to the board three times, you didn't do what you said you can do time to go. So remember that so why do take that seriously? It's a marriage. So spend the time doing diligence, it's crazy. That not enough people check references, I truly rev not
Offenses. They tell you find out everybody. They said look.
People behave, the way they are all the time. So, find the people that they aren't telling you about. And there are stories, we all know who they are. You just got to find. So, I spend the time, like who truly loves your song, right? Going back to music, obsessed with the song, as you playlist. Truly can like understand you.
And want to invest, not because they want to make money. We can all make money somewhere, but they truly want to be part of the journey but more important, they're not assholes and there's moments, there will be moments in the business with a hyzer highs, as you know, as a founder of the lows are low. And you want the person who's going to be supporting you, and not just thinking about the money because the more they start think about my, they don't care about you and they make the de worst decisions and pushing you out of the business and they start pushing to me,
Decisions in the business that are the net - so it's one of these things, one, yes, great firms. All this bidding war spend time with spend time. Who's joining the board. That's like my only Vice just due diligence from the love of
God. So you and I have talked on the diligent side, the best Founders to talk to in an Investor's portfolio. To get an honest assessment is, go find the ones that didn't work because you basically see the downside. And then the second thing is never believe the first bad story, but listen to the second one, right?
Like everyone, whether you're a founder and investor, whatever everyone just didn't get along with someone didn't like someone they took something personal whatever. But if you hear it twice, then pay attention.
Yeah, a lot of negative stories are just personal vendettas. They said knows they're an asset. Like know if they did real deep dark deep cut shit like that's stuff you gotta find out otherwise enjoy it while it lasts but remember that firm on that round their job is to help you.
The next round their job is to help recruit people. Their job is to open up the doors and help accelerate the business we live in a world. Now, the it's really interesting to me part of the story, your moat, this last thing inside took me about the the rules change this year.
I didn't think of it as much before but I do think about all the time now in the world of AI. I don't know how to code, but I can pie clone every startup in here in a weekend.
Right? Think about that. Like whatever product you have like pop and iPod this weekend. We can clone it literally with Chad GPT the UI, The Experience, etcetera. And I don't so well, how do you win, right? What's the most? The most is so much more important. So in a way the advisory stuff does kind of help, right? Well they have access to this, right? Have this exclusive API access here or are you have customer base here or so and so is investing in the largest distributor on the
Eastern Seaboard for this. Like, that's the most otherwise,
I can just think about whatever you're pitching, trust me. There's a it used to be maybe one or two, maybe another YC company. Now it's like 100 companies. The in this exact same thought you have is not that original. It's really not someone else cloning. So now the decisions like, okay, so much more now goes into, why you versus this person, and all these, other hundred people who are using chat, because he built the same thing. Why you? And then what's the moat
Exclusive relationship with this Kaiser to roll out my sass off, whatever it is like it's got to have some more in there. It's going to be a little bit harder these
days. The only thing I'll add before we end is, I'm surprised I've spent recently with two different Founders so much a fundraising meetings and there's two kind of reminders, right? If you haven't done it in a while, one every single Venture capitals will show up unprepared like maybe late, right? But they get on, they haven't looked at your product yet, maybe they looked at the deck and you'd be shocked.
Because you're like, oh, I'm gonna push them for money and like this is like, you know, you literally block this out, you prepared you did. All the stuff is like the most important meeting of the day. Unfortunately, you're one of many pitches and so you have to be prepared for them to be like, so like how does the product work? Whether that sharing the screen, whether it's having the screenshots like you have to anticipate some of those are think you were gonna mentioning. But the second thing is, you can't have the same exact pitch for every single investor and so it can take you 10 minutes if you know you're meeting with.
Her red Venture firm go on their Twitter account. See what they've been talking about. Good look at their blog post. Go look at the industry Trends, show up and and guess what? They told you the answers to the test. Let's get wasted in Creator, a economy. Our SAS tool. Has a really big thing in the Creator economy right there and you can talk through it. But the more that you kind of related to what they're interested in, obviously they're going to spend more time on. Remember,
one of the things about it when you're talking investor is
I like some 70,000 every round I've ever done. I've done, I'm somewhere. Like 150 rounds of help raise each round up on average. Is 100 nose, Okay? 7,200 nose for every single. Yes! Okay, it just you average that out. So just you gotta keep at it, but in every story, you know, Ryan at Flex Port, I remember.
His seed round was done his board member. Roy, Bhai is a good friend of mine. He's like, he helped humans. Help raising a nobody wants to give money. I'm like, I sat down with them. Here's a lot of the world. Do you know it's green screens? Don't got it, all of shipping Logistics world as green screens, right? And show the vigil of literally on the screen. What agrees? Because people don't know what that is. It's like, oh really?
What are you doing? You're beautiful web UI software. Oh, okay. Duh. Like Basham like that pitch alone. The whole world is working on Lily. Greene's Bean text-based Logistics and you're bringing a visual interface where you can track chips all over the world and tell you where the product is. That's the pitch. They raised a be around struggles again, come back in its it was just storytelling for experts. Now you know, things
Fifty billion dollar company, every story, every founder has that story. It was always about just how to tell that story the pitch. It's just is very slight tweak. It has to be simple, right? Was fuck sport. The Whole World Series champion screens. You I was like 10 years ago, that should work. What do they do? Right. It's not complicated. You don't need to do the intricacies and use all these bullshit web terminology like forget the term out. What is the product you and let me visualize it in so that I can tell.
Tell the story to my partners and understand
it and give you money. Ladies and gentlemen, Peter Pham
