How to Be a Founder Investors Want to Bet On

In my opinion / experience, a large part of the game for early-stage teams and whether they receive fundraising or not is whether the person / team is worth “betting on" or not.

The way that the VC model is structured is that a fund will be extremely profitable if just 1/100 investments hits and gives them a large return.

They don’t make their money on 20 “solid” investments.

They need 1 home run to make up for 99 miss hits. But they’re still handing out millions of dollars to the 99 other “misses”.

This gives your company a massive opportunity to prove yourself.

Early-stage investing (pre-seed, seed, even early Series A) is not about spreadsheets, margin analysis, or conservative projections. It is a conviction game.

Here are the 3 things that I’ve seen makes a founder and their team “bet worthy” for a VC / investor:

• An edge - Something unfair, specific, and hard to replicate

  • “You’re the right person to build this and win this market.”

• Conviction + velocity - Not just passion, but proof you move fast and don’t wait for permission

  • “You’re going to figure it out, no matter what.”

• Clarity of upside - You’ve done the mental work to simplify the upside and show the outcome

  • “If this hits, this could be a billion-dollar company - and here's the path.”

Again, a lot of this is based on my opinion / experience in the market, but I think the display of competence in your area and conveying that to an investment group cannot be understated on how important it is.

This isn’t to say that the meat and potatoes of your company isn’t important. This is already assuming that:

• Your Idea / market make sense

• Traction data is there or improving

• TAM is large enough for real scale

But there’s something about the confidence and conviction of the founder that helps take this to the next level.

Here’s what we do at Breakout to put this idea in action for you:

• From the point of a call being booked with an investment group to actually taking the call, there’s a lot you can do to “warm them up” and get them familiar with your brand

• We help script out, and write a 1-2 minute VSL of you talking about your company, the problem you solve, and any other key details

  • This gets a firm to see your face and hear your voice, which goes a long way for likability and trust

• We also script out and write a full pre-call sales letter to give a high level view of you and your firm

  • The main thing this does is skip the small talk or intro questions on the call itself, so you can have better conversations, easier and faster

There’s such a massive lift between companies that approach their fundraising with a modern sales motion like this, and those who don’t.

And we’re here to exploit the difference with our clients as much as possible.

Hope this helps, let me know if you have any questions.

Ryan
Breakout