I've raised $1B in my tech career. 10 years of funding tips in 5 minutes:

VC's Lead or Follow-On. Lead investors are the first money in. They set the: → $$$ Size → Valuation → Legal "Term Sheet" Follow-on investors only come in after a term sheet. When looking to raise, first focus ONLY on lead investors first.

Fundraising = Sales Funnel You have to build a “fundraising machine”. This is exactly what you do in a Sales process: → Qualify the Leads → Reach out process (referral or cold email) → Demo (the pitch) → Convert down the funnel

Funding Rounds Are 20-30% Dilutive Investors need their pound of flesh to make their business work. This is usually 20-30% each round of capital you raise. There are outliners. "Hot" rounds can be ~15% and "challenging" rounds ~40%. But expect ~20-30% dilution each round.

Post-Money Option Pools Investors expect to include a large 10%+ option pool on the POST-money. Post-money pool = investor actually gains % ownership until the option pool is fully granted. Everyone does it and there's really no way around it.

Dollars = VC Fund Size The amount of dollars VCs invest are correlated to the VC fund size. Seed Funds with $30M write checks of $500k - $2M. Growth Funds of $400M invest with $5-20M. Don't expect a $50M fund to write you a $10M check.

Momentum is your Friend If investors are interested, expect them to be knocking down your door. Deals are generally done in days. If it’s been >1 week and you haven’t heard back then the deal is likely dead. Investors ride momentum.

VC's invest in a Category Investors have mandates in what they do and don't invest in. Don't expect a SaaS investor to do Hard Tech and vice versa. Target investors based on historical investment categories similar to yours.

Probability Weighted Odds Calculate your probabilistic odds by the investor actions. For instance, I’ve never closed a deal when: → Investor asks for the deck instead of a call → Partner drops you with new grad as first step → Investors asks: “what if [Google] does this?”

I hope you've found this thread helpful. I've been building tech companies for 20 years. Founder of Figure, Archer ($2.7B IPO), and Vettery ($100M exit). Follow me @Brett Adcock for more. Like/Retweet the first tweet below if you can: