Oversubscribed Weekly #2

November 14, 2018 by Max

Welcome to the second edition of Oversubscribed Weekly: our weekly newsletter providing insights on seed fundraising from both founders and investors.

Tweets worth reading

From YC Partner Aaron Harris, a good reminder of one of the core lessons from Oversubscribed: it’s easy to get over-excited when VCs seem to be showing enthusiasm, but an offer is never an offer until it’s official. We’d go even further and remind you that it’s never a done deal until the money is actually in the bank. Although it’s uncommon, signed term sheets can and do fall through.

Ian was one of the earliest investors in Max’s startup Castle and is a great Twitter follow to boot. His firm, Cantos, is on the cutting edge of VC, and he has a great knack for spotting where the startup industry is headed. This tweet dovetails with our own belief that the next crop of world-changing startups won’t be software-only, but rather those that combine software and real-world services or hardware.

Okay, we’re cheating a bit with this one, since the “tweet” worth reading is really a link to Social Capital’s 15-page annual letter. Although Social Capital isn’t technically a VC firm anymore (they’re in the process of converting into a technology holding company), Chamath’s annual letter is well worth reading. In it, he criticizes what he calls the “dangerous Ponzi scheme” of the current VC landscape.  

Q&A with an anonymous VC

Q: What’s a technique you see founders using that never works?

A: Bragging about the other VC firms you have meetings with. VC is a small world, so chances are I know someone at the firms you’re name-dropping and can find out exactly what they think of you. It’s one thing if you have actual offers from these firms, but just mentioning them isn’t likely to impress me.

Q&A with a founder

This week’s Q&A comes to you courtesy of Zubin Teherani. Zubin is Cofounder & COO of LeagueSide, which connects youth sports leagues with scalable and effective sponsors.

Q: If you could go back in time to before you started your company and teach yourself one fundraising-related lesson, what would it be?

A: Early-stage fundraising is all about perceived momentum. Keep advisors and potential investors up to date, so they have better context of where you started and where you are now. This can manifest as a monthly newsletter or 5–10 check-in calls.

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