Patel: Founder story and mission scope drive seed fundraising
Satya Patel · 20VC: Homebrew's Satya Patel on The Key Components of Being A Great VC & The 3 Main Reasons Startups Fail At Seed · Mar 28, 2016 · at 7:25
Satya Patel, co-founder of Homebrew, discusses what enables startups to successfully raise seed funding from venture capitalists.
0:00 / 1:03exact quote · 63.7s
720p mp4 · rendered on demand · StarZero watermark
“And I think the key to successful fundraising at the seed stage is really establishing that emotional resonance with an investor. And there's really only two means by which to do that. One is the personal story of the founders, right? Why it is they're focused on the problem that they're focused on? What makes them uniquely suited to attack it? What's the belief that they have about their solution to the problem that is unique to them and to, and maybe different than what the rest of the world sees? You know hopefully some common ground with the investor that helps investor relate to them or the problem that they're solving. So that's the first. And then secondly is the mission itself. And is it a problem area again that the investor can relate to, or is it, An opportunity of such massive scope and potential scale that the investor has to be involved in it. You know, is it something where we like to say the founders have a very narrow near-term focus, but a broad long-term vision around what the world should look like. And I think those two things kind of the founder and the mission are the only things that can help establish that emotional resonance early on.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Satya Patel
Patel: $100M seed funds are awkwardly sized tweeners in current venture markets
“In today's market at the seed stage in particular a hundred million dollar fund is a bit of a tweener. You've either got to be larger to be able to write large checks and get the ownership that you need in order to win the best opportunities and deliver the ty…”
Patel: Self-funded investing frees investors from needing fund-returner outcomes
“The flexibility that we have in not having a fund now is that we don't have to think of every investment as having the potential to return the fund, right? Every investment just has to be a good return.”
Patel: Homebrew testing whether non-lead seed investors can maintain lead influence
“One of the experiments we're running here is kind of the testing the thinking around can capital and counsel be separated over the course of time, right? And so one of the things we're trying to evaluate is in some cases when we do a smaller check, can we stil…”
Patel: VCs rarely regret early distributions, but heavily regret holding to zero
“Most investors, investors don't realize, like, they're not gonna regret the upside if they put money in their pocket, but if they don't take the upside and things go away, they're gonna have a lot of regret.”
Patel: Distribution wins over product in early-stage startups
“It's not the best product that wins, it's the best distribution that wins, and that the best distribution creates a feedback cycle that allows you to have the best product over time, but distribution wins over product in the early days.”