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A Summary of

A Playbook for Fundraising

by
Lenny Rachitsky
Lenny's Newsletter
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Fundraising is make or break when a founder begins their endeavor

  • This is a guide for investors after they have raised their original seed round looking for the next round of funding
  • Fundraising is an exercise in building trust
  • Careers are staked on how successful investments are 

Step One: Preparation

  • You should figure out when and why you need another round of funding
    • Most founders look for fundraising when they are out of capital
    • Should do so as an investment instead
  • You are generally ready for a series A after a credible value hypothesis
    • Investors want to invest in growth
  • Should prepare
    • A short blurb for your business
    • A short teaser deck
    • A long presentation deck
    • A 2-3 year forecast

Step Two: Outreach

  • Put together a list of 50-60 funds to talk to
  • Find partners within each fund you would like to work with based on their past deals
  • Be cautious with coffee meetings because they are time-consuming and require a lot of preparation

Step Three: Navigating the process

  • Have the first meetings with the funds between 2-3 weeks of each other
  • Approach meetings with the eyes of a project manager
    • Build a calendar with feedback from the funds
    • Keep all funds on similar timelines
    • Until a deal is made they are all still suitors to the creation
  • Having five funds still interested after a diligence stage is a success

Step Four: Partner meeting + closing

  • After building the relationships you should now focus on the business side of things
  • Do not share what fund offered what valuation to the others, it could reflect poorly on your character
  • Once you receive a term sheet, you are on the clock to accept, negotiate or reject it
  • It can take 3-6 weeks to see it all play out
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