Latest / Success Story with Scott Clary / Lessons - How to Secure Funding When Everyone Else Gets Rejected | Tim Guleri - Legendary VC & Tech Founder

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Lessons - How to Secure Funding When Everyone Else Gets Rejected | Tim Guleri - Legendary VC & Tech Founder · Success Story with Scott Clary

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  In this lessons episode, discover how venture investors can avoid founder misalignment by doing
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  deep personal due diligence before writing a check. Learn why surrounding first-time CEOs with
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  strong co-founders and advisors helps guide growth. Learn how ego and peer advice can mislead
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  new founders and learn why filtering feedback and building intuition through experience is key
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  to long-term success. In a situation like that, is there something that you could do to
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  or that you try and do to help the founder CEO see a line on the same vision like real line?
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  From every person that I've spoken to who does venture investing, the individual is the
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  most important component. The market can shift, but the individual is the X factor. If that person
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  goes rogue, you're done. Let's talk to investors in the audience. They put money into an early-stage
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  company. What can you do in that case? Is there strategy, is there tactic, or is that
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  right off? Yeah, I think so. The first thing is that do as much work as you possibly can
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  for you write the check. I really mean this with all the, this is why I'm not a fan of these
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  party rounds that happen over the weekend and I breathe out in a 300k check and then nobody shows
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  up for work. There's no ownership to the project. The founders raised 4 million bucks, but
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  everybody's put in 200k. Then there's nobody to challenge your ideas or give you new ones and
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  it's a very lonely place to be. If I was advising entrepreneurs, I would say don't do that. Investors,
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  which is a question you asked, I think I now have a much more rigorous process on understanding the
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  individual behind the CEO. What is this person all about? Doing blind references and other
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  calls. Now, what are the benefits we have as a 40-year plus bench capital firm? We have
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  one call away for almost any entrepreneur to find out what are they all about because we've got
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  such a massive network. On this year, UFO, one of these kids from college that doesn't have a
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  history in the valley. If you've done 5, 7, 10 years of work in the valley, we know one person
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  that will give you. I do a lot of work in advance. I also spend a lot of time with them
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  sort of off-cycle, taking them off a dinner or go for a walk before we'd write the check.
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  This is ready to unpack the person down in the person. I think having said all that
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  still goes wrong because people are people. The answer to that is for the listeners,
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  their investors, surround them with a highly skilled set of either co-founders or advisors early on.
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  Because CEOs tend to learn about osmosis the best of them. They have a learning mindset.
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  A great example of this is one of my favorite CEOs. My admin ready is running now, a very,
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  very large company and investment. This company is based in Philly. It's a company called Phenom
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  and the HR tech space and just a rocket ship company, profitable while all the other competitors
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  have burnt and Scott incinerated hundreds of billion dollars of cash here in the valley.
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  This guy's kind of raised less money than the ARR that he's putting on to on his top
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  in every year right now, just a phenomenal company. The big, big thing that I respect about my is
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  that he's surrounded himself with. He's only seeking out that next great idea from the next great
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  person. The job of the early stage entrepreneur is giving capital, doing all your work for you
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  write the check as much as you can, but still thinks it's still going wrong and then surrounding
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  the CEO with what I call experts or people that can really get them sort of additional ideas,
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  once you've identified what their soft spot might be. One of the early stage CEOs happens to be
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  this phenomenal founder from PayPal, technical guy, had to learn, go to market on the job.
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  Right, so I've like inserted like this guy to his company, I've invested in that, you know,
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  worked at a very, very great company on the GTM side called Act Dynamics and that person is now
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  advising Sir Ash who's the two in question that's company I've done called Sadi on GTM.
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  So again, that's a great sort of a fit and he's learning a lot from them and I think that
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  brings on the risk of these founders going off the trip. I think that's very wise. I also think
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  that it's sometimes uncomfortable for a first time founder to ask for help and understanding
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  there's like a mental block there for them to put, you know, put them in that a little bit of a
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  position of I'm sort of saying I don't know what I don't know and please like I want the advice,
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  but I think there's an either involved in that too that a lot of people have a tough time asking
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  for help. So if you're putting those people around them, you're just it's just a very great
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  environment that's going to allow that person to thrive. The other thing and you remind me of
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  something's covering you said that. The other thing I've kind of noticed is that these founders
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  talk to other peers and you know get go to go to advice and you know lock into that advice
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  which might be different, maybe a few degrees sometimes completely opposite to the way I would
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  advise them on that particular point. So I've been thinking about that because, you know,
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  one of my CEOs does a lot of this where you go and talk to another CEO's 28 and try to get advice
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  from fundraising or timing of fundraising and so and so forth and I'm like that is not that guy
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  at personal gal is not giving you the right advice right. So the point here is not that don't
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  talk to your peers you should but filter what you're getting based on the experience that
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  somebody has right because it's more likely I'm not saying I'm always right. It's more likely
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  that somebody just going on a pack that has a perspective and does this professionally.
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  It probably gives you a better advice than then your buddy you have is a bear with right. Yeah.
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  And sometimes I've actually found this a lot and I think that it's also very damaging. So if
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  somebody achieves some early success and they haven't been in the game long enough to understand
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  that their early success is not the the way that they achieve their early success is not the only way
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  to achieve success. They become almost like there's like a religious conviction about how they
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  achieve success and that's the only way to do it and that's the only advice they give and they
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  speak with such conviction and such charisma that you know that they're receiving the recipient of
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  that advice starts to believe that yeah that must be the only way to do it or that must be the
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  only way to operate through this specific and they're only like you know they're 25 26 and they're
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  giving they're giving this advice that serve them well for the first you know four years of their
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  life but they don't realize that multiple things can be true at the same time and that what work in
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  one industry or one instance it doesn't always carry over and this is bias towards this you know
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  they're there's short lived experience and I think that's also damaging and that you probably
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  get that from here the balancing comment is right that's not a yeah age thing or an experience thing
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  right because I think that I met 22 year old that are that are very very insightful and
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  there were different set of experiences so I think the point I think we're both trying to make is
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  as a as a first-time founder understand the source put a filter on top of it okay figure out
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  you know based on a lot of life is all about having a gut instincts right so when you've had
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  enough reps you just know right and so they need to get enough reps and you know if you're if you're
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  taking feedback from founders go talk to 10 not one if you're trying to take get feedback on a
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  particular point from like 10 year VCs or whatever talk to fight not one right and then you balance it
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  and you'll get the right and then I'll comply all on intuition so just just kind of having one
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  conversation over a cocktail doesn't make a strategy thanks for tuning in if you found this
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  valuable don't forget to hit that subscribe button so you never miss an episode and if you want
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  to dive deeper into this conversation check out the links in the description to watch the full
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  episode see you in the next one