Fundraising In 2024 - Three Sides Of The Table

During NY Tech Week 2024 Finta hosted a live panel discussion in midtown Manhattan on the state of fundraising in 2024. Delving deep into the nuances of fundraising from three different perspectives: an investor, a founder, and a lawyer.

Our incredible panel for this event consists of:

​The Founder

‍David Silverstein, is the CEO of Ned, a white label lending platform that makes it easy for lenders to effortlessly deploy capital.

The Investor

Rachel ten Brink, General Partner at Red Bike Capital, an early-stage VC fund based in New York, specializing in SaaS, Health & Wellness, and Fintech sectors in the U.S. With over 30 years of experience, including founding a Y Combinator-backed startup that reached $100M in revenue and managing $2B in assets.

The Lawyer

​Jack Sousa, is the Partner & Co-Chair of the Emerging Companies and Venture Capital Practice Group at Wiggin. He is also a wiggin(x) Co-Founder and Partner. Jack focuses his practice on venture capital, startup and early-stage companies and their financing needs.

‍Take A Listen To The Event:

Key Fundraising Insights From This Episode:

How Should Founders Think About Fundraising

David Silverstein kicked off the event emphasizes the importance of focus during a raise. Trying to shrink the amount of time you spend fundraising so you can get back to building the business. Highlighting the importance of relationship building in fundraising, while de-risking and hitting the right milestones to build trust with investors.

Rachel ten Brink advises founders to start planning their next round of funding as soon as they close their current round. She emphasizes the need to reverse-engineer the process, understanding how far the current funds will take the company and what metrics need to be hit for the next raise.

AI's Influence On Startups

AI will fundamentally transform the venture capital landscape. Rachel notes that AI is not just a sector but a foundational technology that will touch every industry. David adds that while AI is important, it is crucial to solve fundamental business problems first.

VC Investor Relations with LP's

Rachel discusses the current trends in VC strategies and the importance of understanding the dynamics between VC funds and their LPs. She highlights the necessity for founders to be aware of the financial health and commitments of the VCs they are pitching to.

Current Market Trends and Company Valuations

The discussion centers around the importance of always being prepared to fundraise and understanding market dynamics. David stresses the situational nature of fundraising, advising founders to be ready to adapt to market conditions.

Important Fundraising Legal Considerations

Jack Sousa recommends involving a lawyer early in the fundraising process to navigate complex legal terms and agreements. He mentions the return of redemption provisions and full ratchet anti-dilution clauses as trends to watch.

How Can Founder's Stand Out To Investors

To stand out, David suggests focusing on demonstrating real customer traction and needs. Rachel emphasizes the importance of clear, concise pitch decks and consistent communication with investors.

Strong Investor Communication

Balancing warm introductions and cold outreach is crucial. David recommends building relationships with investors before needing to raise funds, while Rachel highlights the importance of thoughtful signaling and avoiding desperate outreach.

Practical Tips for Founders

Jack Sousa and Rachel discuss essential legal terms, noting the increasing prevalence of liquidation preferences and full ratchet anti-dilution clauses. They advise founders to keep their cap tables clean and to be aware of the long-term implications of their fundraising choices.

Industry-Specific Insights

Raising funds for deep tech ventures involves unique challenges compared to traditional SaaS startups. Rachel and David emphasize the importance of understanding sector-specific milestones and investor expectations.

The End of Software...?

The panel debates whether the software market has matured. Rachel argues that while the market is evolving, there is still significant upside potential for innovative software solutions, particularly those integrating AI.

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Hosting this event was a blast! A massive thank you to everyone who helped make this event happen and a success. We can't wait to see you all at the next one!

Introducing Firehouse Ventures 🔥

The past few years I have been quietly building an AngelList Syndicate to share co-investment opportunities for some of my favorite companies. When you back a syndicate, you're under no obligation to invest in any deals. You are just committing to keeping any information you receive private and confidential. If you are interested in learning more, just drop your name and email at the button below (and keep reading if you are interested in the back story):

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For over 8 years of my pre-New York City life, I was a volunteer fireman with the Swormville Fire Company. I went in burning buildings, ran transports as an EMT, worked up to the rank of Lieutenant, and served the local community 24 hours per day, 7 days per week. My hope was that I was making a meaningful impact on the people of my local community. I wanted to use my time on this planet to make a dent in the world and leave my mark.

One of the reasons I got into startups and venture capital almost a decade ago, was that I saw it as a way to make an even larger impact on the world. Startups were starting to touch the lives of billions of people. I thought, if I could help the founders do that better, then I could (through some magical butterfly effect) help improve the lives of billions of people. I saw venture capital as a way to have my time, serve a larger community and make a larger impact.

The funds & investors that I looked up to most, a decade ago, were predominantly founder and team-focused. Now you would call the stage they played at Pre-Seed and they called themselves “Super Angels” as that term didn’t exist yet.

It’s no secret that in the last decade, the venture capital industry has been the fastest-growing segment of the private capital industry. With lots of new entrants, the industry evolves every few years and we see new styles of investment. For example, Tiger Global is currently re-writing the playbook by playing a different game than how venture capital has been traditionally done. And Covid has also created “An Unpredictable Reopening In Venture Capital”, which Semil Shah of Haystack recently summed up nicely.

But to me, one thing still stays true throughout all of Venture Capital’s evolution. The people are what make the organizations truly excel. And just how the Firemen are there to serve the people of the community, Venture Capitalists are in the business of serving kickass founders. To keep the structures upright when a crisis happens. To reassure, when the unexpected occurs. To offer aid when it’s needed the most. And to help put out fires. There is a human connection that was key to my role as a firefighter, and it is still key today to my role as an investor.

During my time at Founder Institute, I was very fortunate to meet and work with Rachel Sheppard, who was the Director of Global Marketing. She helped scale FI to 180+ cities and 65+ countries. Now Rachel is the Director of Ventures at Mars Petcare as well as the Co-Creator of the Female Founder Initiative, supporting women founders from all over the world. With her on the west coast and me on the east coast, we are working together through our joint network of entrepreneurs, venture capital funds, and accelerators, to when we can syndicate our favorite deals.

We are calling our syndicate, Firehouse Ventures, a constant reminder to serve the community of founders and never forget that without them (the relentless community of builders), we would be nothing. Here’s to the crazy ones. 🔥

The Next Chapter: Finta for Fundraising

Anytime you close a chapter, you must always turn the page to a new one. In my next role, I am building Finta to continue my mission of helping founders.

Ten years ago, finding the information you needed to know about how to start a company, was not easy to find. A locked box of sorts, that only a privileged few had knowledge of, especially as it related to the business style of Silicon Valley tech companies.

Over the past decade, in order to be “value add” to their potential investments, many Venture Capitalists started to share company building information on their personal blogs. Then some organized that information into three-month-long programs and called them accelerators. Others gave their companies office space and called those incubators. Investments were layered in to further help these companies. Free podcast interviews with founders started to provide insight directly into the minds of business leaders. And on and on it went. The Silicon Valley mindset went global, and once-rare company building information has now become widely accessible to anyone online.

As a result, I have recently seen a shift in what the founders are looking for when starting a company. Information is wonderful, but now that it is widely accessible it is only a piece of the puzzle. In order to be true “Value Add” in this next decade, investors will need to help founders in new ways, beyond just information and money. I believe the best investors will do so by building software for founders.

I put an emphasis on “for founders” because some investors are already building/investing in software for investors. Widely missing the mark when it comes to how they perceive founder pain points. This is due to the fact that founders and investors live on two opposite sides of the traditional venture capital transaction. Resulting in investors becoming much better at buying equity, then founders are at selling it.

Going into this next decade, I believe building great software and platforms to truly help founders is going to be an important part of the puzzle when finding success as an investment firm. This is our motivation behind building Finta. Starting with fundraising, one of the most manual, tedious, and step by step process a founder has to execute. At Finta, we are automating the investment process for companies and issuers. They just set up their company and deal once on our platform. Share it with prospective investors and we will take care of the rest for them.

Finta helps early-stage start-ups raise capital faster. Automating the fundraising process and streamlining the tedious, manual, step-by-step operations of a fundraise, while securing all of your important diligence documents in one place. Helping companies save time, raise more, and increase efficiency.

I am extremely excited to build Finta. It’s a new chapter in my story, and I can’t wait to see what the future holds.

Check out Finta for yourself on our website!