The Biggest Lie Founders Tell Themselves About Fundraising
I was giving an update to one of my investors over coffee when he finally asked the question I’d been dreading: “How close are you on your next round of funding?”
The truth, of course, was “not close enough.” I’d been working on our round for nearly five months, it had been taking most of my time, and the company had clearly been suffering as a result. None of my investors were happy about that.
Not wanting to disappoint him, I said what most founders say when they’re struggling to fundraise: “We’ve got most of the round lined up; we just need to find our lead investor.”
My investor nodded his head. But it wasn’t a nod of acceptance. It was a nod of skepticism. He was clearly debating whether he should call me out or let my answer pass without comment.
What is a lead investor?
Anyone who’s attempted to raise venture capital knows the term “lead investor.” And yet, despite its ubiquity, its meaning is nebulous. A lead investor isn’t an official role or job title. Nor is it a subcategory of venture capitalist. As-in, there aren’t “lead investor” venture capitalists and “non-lead-investor” venture capitalists.
Instead, the term “lead investor” is really just a shorthand for the first person to say “yes” to…
