The most surprising aspect of raising our first round and watching other companies raise alongside us is the fact that the best people at pitching often have the fewest skills when it comes to building a tech product.
I say surprising, because in retrospect it makes sense —everyone has their own unique combination of skills. Some are good at putting on a show, others are good at sitting at a computer for 40 hours straight building a product. It just wasn’t what I expected.
I figured that the rare breed of creature who convinced people to fund their startup had to have a combination of pitching skills and technical chops. But when you’re starting out, investors often have nothing tangible to look at besides, well, you, your circus act…and some B+ Photoshop designs. Because of this, it begins to make sense that some subpar products get funded. The people with the connections and the best pitches can convince investors to hand over cash. And often, the reverse is true as well — the smartest product people often don’t know where to begin when it comes to raising money and getting the word out.
This is the point where I say that the best venture capitalists can see through the dog and pony show. It still helps, but it won’t get you all the way. For example, Momunt went through Jason Calcanis’ LAUNCH Incubator and they won’t accept companies that don’t have at least a functioning MVP.
Additionally, Y Combinator has vocally stated their unwillingness to work with MBA-types over technical founders. I now completely understand why: it turns out there are a lot of people who can — how does Jay-Z put it? (and I roughly quote) sell ice in the winter, sell fire in hell/be a hustler baby, sell water to a well — but when it comes down to building a product, they’ve got nothing.
Not to beat a dead horse but this MAKES SENSE! Pitching is putting on a show. Jake Gyllenhall sure looks like a great boxer in that new movie “SouthPaw,” but I doubt we’ll see him in the ring with Mayweather. The pitch/show are often a completely different beast from actually competing in the market.
You should probably have a co-founder
If you’re the pitchman or woman, your co-founder should probably be technical. Hell, if you’re main role is to be an amazing pitch woman you should probably have two technical co-founders. Again, I’m reminded of Y Combinator and its unwillingness to fund most companies with only one founder. It’s super unlikely that you’re good at both pitching and technical work. Turns out that both of those skills are pretty important.
-Pitching gets you money, and potentially, users (that’s a whole other post)
-Product makes your product not suck
I’m definitely oversimplifying and the best leaders in the tech space fill out many, many more roles than simply being “product” or “pitch.” However, this simplification resonates with what I’ve seen in the market. You need the pitch to get that money (barring crazy viral success) and you need the technical chops to make sure you live up to the bold claims you make to investors.
Series A crunch
Though I’ve never raised a Series A, I’m consistently reading about how it’s 100,000x harder to raise than a seed round. It would seem that given how prevalent venture cash is right now, the dog and pony show can get you your first $$ but any subsequent rounds will require that rare combination of showmanship and a product actually showing its potential to take off like a rocketship…or in an ideal world, maybe it’s already a rocketship!
But what does it all mean?
My experience raising over the past six months has led me to believe that you need both skills on your team to really play ball in the venture-backed tech space. I’ve had to learn what I’m best at, as well as what my founder’s skills are, and adjust accordingly. If you’re looking to dig in and raise your first round, first find out where you fit into the puzzle. Make sure your co-founder has your back for whatever skills you lack. It’s a long road and you can’t do it alone.
As always — we’d love to hear from you. Reach out to email@example.com and download Momunt 2.0 www.momunt.com/download.