VC Minute Weekly Recap: AJ Raised 9 Venture Rounds in 10 Years
You're not building the plane while flying it. Find the right partner. Negotiate the right things in the term sheet.
After the perspective on not raising venture capital last week, I thought it would be great to follow it with a founder who has gone in the opposite direction.
AJ has raised nine venture rounds in ten years. In his own words, “a lot of sleepless nights, a lot of pitches, a lot of door knocking and rejections.” Those rounds were for two different companies, the first of which he successfully sold for $225 million.
He has a ton of fundraising experience to share with founders, from how to build pitch decks, the importance of asking questions, to what really matters in a term sheet.
I loved that he was not a fan of the startup maxim, “building the plane while flying it.” It’s better to think about it as upgrading while in flight. That aside, here are my three takeaways:
Everyone gets rejections while fundraising. It’s not just you. Though it may feel that way, you’re not alone in that.
Find the right fund to partner with. Start the process by writing down what you want from a venture fund, then spend time interviewing them as much as they are interviewing you.
Look beyond dilution in term sheets. Negotiate the right things in your term sheet: board control, participation rights, option pools.
AJ loves to talk about fundraising! Did you enjoy his insights?
Episode Summaries
AJ Raised 9 Rounds in 10 Years for 2 Companies, He's Not Building the Plane While Flying It
This week's guest, AJ Bruno, QuotaPath's CEO, reflects on raising $70 million for QuotaPath and selling TrendKite for $225 million after nine funding rounds in 10 years. AJ challenges the startup analogy of "building the plane while flying it," advocating for focus and clear value propositions.
Fundraising Process Starts With Storytelling, Network and Finding the Best Partner
AJ Bruno shares his fundraising process, emphasizing the importance of leveraging his network, crafting a narrative-driven pitch deck, and carefully selecting the right partner for QuotaPath.
Asking VC Questions Builds Relationships and Gets Clear Answers
AJ Bruno advises founders to fearlessly ask questions during partner meetings and initial discussions, urging curiosity about fund dynamics, decision-making processes, and finding alignment with a fund's investment thesis.
Key Terms for Founders Negotiating Term Sheets
AJ delves into essential aspects of term sheet negotiation, decoding clean terms, participation rights, and preference stacks; emphasizing the evolution of terms and unique fund considerations, AJ advises founders to uncover the investor's intent and prioritize understanding key terms like 1X participation.
Valuation Is Only One Part of the Term Sheet
AJ Bruno urges founders to look beyond valuation and dilution in term sheets, emphasizing the critical role of board configuration over dilution percentages. He advises awareness of option pool dynamics and encourages resilience in the face of rejections, emphasizing daily learning and growth.