Season 2: 10/10 VC Series — Preparing for Future Fundraising🧠
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Alix Ventures: Supporting Early Stage Life Science Startups Engineering Biology to Drive Radical Advances in Human Health
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Overview: 10 Questions to 10 Early Stage Venture Capitalists
This topic series brings together perspectives across a variety of early-stage VC funds to help readers gain insight into what investors believe to be key to their growth and success. In our belief that perspectives should be well-rounded and not monopolistic, we chose to feature 10 different investors rather than to dive deep with just 1 or 2 individuals. We have a lot to learn from each other and hope that by sharing 10 unique viewpoints, we may all come to our own insights faster. Our posts will be organized by question and cover topics including investment criteria, portfolio support, industry trends, and general advice.
We are honored to feature investors at:
Boehringer Ingelheim, Breakout Ventures, Arkitekt Ventures, Time BioVentures, B Capital Group, NEA, Bessemer Venture Partners, NFX, Not Boring, Mayfield Fund, & Alix Ventures
We asked our guests:
“How do you advise founders in your portfolio to prepare ahead of time for future fundraises?”
“I could write about this for many paragraphs, but like anything, a clear story and ask is the key. I firmly believe that science determines the contours of a deal so I would suggest that they are as open as they can be about the data they have, the risks, and the time/money to a meaningful value inflection point. I would then take the story to a small number of known, trusted and experienced people to ask for feedback. While you likely won’t get consistent messages, the key is to listen to where people feel ‘the story falls apart.’ Take that feedback seriously and try to incorporate it into your deck.”
Kanad Das — Investment Director @ Boehringer Ingelheim
“Ideally you are always thinking about recruiting new partners to your story — whether investors, corporate partners or people who can help build your business. The most natural process happens bit by bit ahead of the actual fundraise. It gives you a chance to get feedback that you can work into your plans and it gives investors a chance to see how you think and respond to that feedback.”
Julia Moore — Co-Founder & Managing Partner @ Breakout Ventures
“Identify what you and your company need help with beyond capital well in advance of the raise and build your target list with that in mind. Leverage your existing investors to get candid feedback on the best partners for the next round and start to build relationships with high-value investors early. Ideally, you’ve already built relationships with your next round potential leads well in advance of kicking off a fundraise.”
Pavan Choksi — Partner @ Arkitekt Ventures
“In a cash-burning start-up, one is *always* fundraising. I advise founders against thinking of their raises as discrete events, and push them to view fundraising as perhaps their greatest existential activity, and one that must be pursued continuously and opportunistically.”
D.A. Wallach — Co-Founder & General Partner @ Time BioVentures
“Fundraising can be all-consuming and is not a time to boil the ocean. Focus on finding synergies and high hit rates, so make sure to do some research to understand what motivates the potential investors and if they’re compatible with your vision and plans. Never lose sight of macro trends. Seek warm introductions and run a disciplined process. This seems obvious but it’s surprising how many companies take a shotgun approach to fundraising.”
Widya Mulyasasmita — Sr. Principal @ B Capital Group
“It’s important to consistently market check what future investors think about your current milestones. Then it’s good to scenario plan for what should happen if you miss milestones, hit them, or exceed expectations. This will help you to best cover the spectrum of possible outcomes.”
J.C. Lopez — Principal @ NEA
“Prepare in advance key documents and share a well-organized data room. This gives VCs insight into how the company is run. (this will vary if you are a biotech vs a health tech)
As you embark on the process, also listen to the questions that come up and iterate on the story to anticipate questions.”
Sofia Guerra — Investor @ Bessemer Venture Partners
“Let us in early. We have seen thousands of pitches and know how to spot a good deck. Let your investors help you and give feedback on the story and the flow.”
Omri Amirav-Drory — General Partner @ NFX
“Show the big vision and how an iconic company will be created, demonstrate the value created in this round through execution, outline the value creation milestones in the next round, and finally, emphasize the world class team you are building to get you there. Demonstrate quality and excellence in every dimension, with every interaction.”
Arvind Gupta — Partner @ Mayfield Fund
“VC is fundamentally about building relationships and trust, so it’s valuable to start conversations with investors before the actual fundraising process for the next round. Also, there is a huge variety of different funds and philosophies, so it’s important to spend time doing your homework to know which firms might have the most overlap with your vision of the world. This can make the fundraising process much smoother instead of running uphill by pitching to firms that won’t be a good fit.”
Elliot Hershberg — Partner @ Not Boring
“One of the best pieces of advice I’ve ever been given is, “know people before you need to know them”. My personal belief is that 90% of fundraising can be done between rounds & then it comes down to logistics / dealmaking.
In terms of more tactical strategy:
We advise Founders to immediately after closing their prior round put together a list of top milestones for their next fundraise, identify the 10–15 high priority VCs they should get to know, & then ask these VCs to validate their milestones. When you can fix a target & know what you are supposed to do, it does a great deal in eliminating guesswork, & puts the focus where it should be — on execution. From here we often recommend Founders schedule routine touch points (3–6 months) with these high priority VCs where you share progress (but on your terms, this is not a formal pitch), ask for help (particularly intros), & continue most of all the relationship building process (leds often take Board seats & as a founder you should feel comfortable with this person well before a decision is made. As the saying goes, “a lot of great companies have been ruined by bad boards”). In parallel we recommend, Founders create a “Friends of Your Company” newsletter that you distribute routinely (so folks remember who you are, hear good news, & see your logo). With these tactics in mind then it becomes sounding the horn that you have hit your consensus milestones. At this point VCs should already feel comfortable in knowing you, your company, objectives, and then it comes down to can we make a partnership happen.
The sad eternal truth is “a startup is as good as the next round it can raise”. We believe trying to mitigate capital risk to be highly prudent.”
Chas Pulido — General Partner @ Alix Ventures
To read a recap of the insights provided by our esteemed guest contributors, click here to view our final recap post…
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Alix Ventures, by way of BIOS Community, is providing this content for general information purposes only. Reference to any specific product or entity does not constitute an endorsement or recommendation by Alix Ventures, BIOS Community, or its affiliates. The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by Alix Ventures employees are those of the employees and do not necessarily reflect the view of Alix Ventures, BIOS Community, affiliates, and content sponsors.
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