How to raise a pre-seed round from VCs
The 3-ish things you should know about the venture capital ladder
(This isn’t a partiicularly unique theory; tbh I’m just cribbing from Andreas, but it’s still my take, and I think I’m right.)
Hello, tech founder. You’re probably thinking about raising a seed/pre-seed round from Venture Capitalists. This is my theory for how to do it.
There are 3 Things you need to have: Insight, Credentials, and Execution.
Insight is about a theory, or a prediction you have about the state of industry X, for a timeframe of about 5-10 years. You need to have a one-liner that describes it (For PartyKit, it’s simple: The future of the internet is multiplayer.) It’s also about WHY now is the right time to do it. (For PartyKit, the state of software to build these tools is being commodified, there’s desire, and there’s novel infrastructure primitives that have just come to life.) It’s ideally so obvious that just the act of saying the words makes people nod their heads. It’s also ideally so obvious that you can’t believe no one else is doing it. (If you’re not sure if you have insight, you probably don’t.) If you’re in software, I recommend looking back at the last 50 years and looking for stuff that seemed theoretically possible but we either didn’t have the technology, capital, or culture to do it. (For example, the Internet was theoretically possible in the 60s, but we didn’t have the technology, capital, or culture to do it until the 90s.) The nice thing about technology is that capital and iterative improvements makes previously hard and expensive things easy and cheap. The trick is to get the timing right; that’s why it’s considered insight.
Credentials are about why YOU are the right person to work on this. It’s about your background, your experience, your network, and what you’ve obsesseively been thinking about for the last few years of your life. This might just be you as a solo founder, or about a group of 2-5 people who come with the right balance of skills, experience, and network. (For PartyKit, it’s simple: I’ve been working on this for 6 years, and I’ve been thinking about it for 10. I als have a network of influence and culture by particpating in the front end ecosystem for 10+ years, and had a few open source wins along the way.)
Execution is about the HOW. Ideas are cheap, but coming up with an incremental plan to get there, and then actually doing it, is the thing that actually matters. Can you show that you are capable of building a thing