A Product Market Fit Show | Startup Podcast for Founders
00:04:20 · Lee Silverstone, Pablo Srugo
[00:04:20] S0: Mean? And that's like this kind of like smart structuring thing that you can do that. I guess you're right. At the time we had no idea that we were doing it. But it's like, and I mean it's kind of why there's like priests, like friends and family ran pre-seed seed , right? Like you can use that terminology to chunk up around where you're like, look, to get to in internally as a founder you're like, I wanna get to a million dollars in a RR . What I need to get there is a million dollars of capital into the business, but I'm gonna chunk it up into a two 50 k raise, a 500 k raise, and a million dollar raise. [00:04:51] S1: But it's, what happened, we , we went from 200 to like 500 to seven 50 . I'll tell you something though . We were talking about how to dry FOMO in this, in this , uh, in this market. I'll tell you one story of just, I, I just consider this like, it very, it , it might seem like small, but I just found it was such a power move that , uh, somehow never seen before. So look, normally when I do these pitch meetings, like somebody's raising around end of the, one of my final questions is just like, okay, and like, where are you at in this fundraise? Right? And I'm just trying to like, obviously just get as much information as possible. And so some of the classic answers are like, oh, well actually I just started this fundraise like last week, you know, one of the first meetings. I'm like, okay, cool. [00:05:31] S0: Which is not, which is never true. Probably they've prob they've probably been doing it for like two months. <laugh>.
00:05:36 · Pablo Srugo
[00:05:36] S1: Maybe it's better than the alternative. But the reality for me is all I know is, okay, cool, I've got a lot of time, I got got time. There's no phone because you just start, you just starting . So either you're lying to me and it's actually been two months and I have even more time <laugh> or you're either way, right? Uh, the other one is like, they actually know say, okay, no, like it's been, you know, it's been four weeks. Like they're pretty honest about it, which is like kind of the worst part. 'cause like that's what you said marginally better, which I've heard often is like, oh yeah, we started three weeks ago. Like, we actually have like five investors in the day room and we expect like two term sheets by next week. Which is like, okay, but it's a bunch of nothingness, right? Like, I have no idea <laugh> . Like, you know, it means absolutely nothing means nothing. Yeah. Because like, who knows if it's, if it's real or not, right? And then this one guy comes and he pitches me and I say to him, you know, okay, cool, where are you at in this fundraiser? And he is like, well, like, actually I already have a term sheet. Um, and I'm like, well then what are you doing? Like why are you , why are you raising? He's like, well, it's actually like, is a term sheet for my existing investors. And like they're, they're willing to lead it. Like they'll do a 3 million round, like they'll put in $2 million at these terms. It's like , but like, you know, I , I also know the value of like working with many different VCs and getting access to a bunch of different networks. So I thought like I'd go out and and talk to some select investors that like, I think could be really helpful and just like see what's out there.
00:06:50 · Lee Silverstone, Pablo Srugo
[00:06:50] S0: Yeah , I want to invest in this guy's company. I don't even know what it is. Just awesome. [00:06:54] S1: <laugh>, that's a power move. First of all, it could be a complete lie. And I'm sure like, you know, because this is another power move is like telling me that like, you wanna work with me specifically even though like you just, you don't even know my name, but like, that's great <laugh>. That just, that works. [00:07:09] S0: I love , I love how honest you are about the like people like kissing your. It [00:07:13] S1: Works, it just works, right? It's like, oh, it's only select VCs. And then I get to go back to my team and be like, guys, it's only select VCs. You know, like just this telephone game you let me play. But in this case, like I have no way to validate this. Like I can't, I mean, if I called their investor and said, are you really gonna lead this? I'm sure they'll say they will like, and maybe they will and maybe they won't. And I have no idea. All I know is by definition this round is a hundred percent happening and I'm either part of it or not, right? Like <laugh> and so [00:07:42] S0: Yeah. Yeah. Oh yeah. That's such a good, that's a good way of putting it is it's happening or not. Exactly. It's happening. Exactly . Regardless or not if I'm on the [00:07:50] S1: Bus, the ship is sailing such a power move.
00:07:50 · Pablo Srugo, Lee Silverstone
[00:07:50] S1: Bus, the ship is sailing such a power move. [00:07:52] S0: Yeah. Yeah. That's such a good framework. Yeah, yeah, yeah. Wow. Yeah. And that's actually, maybe that's actually maybe the framework for all people who wanna raise, right? Is that you're trying to build this story of like, this company is raising money regardless of you or not [00:08:06] S1: A hundred percent [00:08:07] S0: You can choose to come in or not. It's you are you, you writing a check or not is not the deciding factor on this thing is gonna happen or not. [00:08:14] S1: I think that's totally true. Even if you go back to like kind of these concentric circles or like bigger and bigger rounds, it's like that's what's happening. It's like when the rounds are almost filled, you're like, well this is happening no matter if I join or if I don't join. That's exactly what's happening in this case. Like this is, this round is getting done Now that's not gonna, like if I'm not interested in the company or whatever, like that's not gonna make me just invest. But if I'm already interested, that can definitely get me to drop other things, put this one the top of the pile and figure out whether I'm gonna invest or not because there's no time it's happening . You know what I mean? Like all this, that's the momentum you wanna build
00:08:46 · Lee Silverstone, Pablo Srugo
[00:08:46] S0: And like to take it back , like take it up to like a macro high level, which is where this conversation started where you're talking about the , the the , the reduction in the amount of capital that's flowing. This idea of this company's raising money regardless of you come in or not, when there's tons of free flowing money that's in the back of everyone's mind, right? Is that this company is gonna raise money regardless. What has happened now is because there's less capital to build that story of, oh man, regardless if I read a check or not , this company is gonna go raise. That's now the challenge for founders, right? You don't have this extrinsic thing of like, oh yeah, I'm gonna go have 10 VC meetings and one of them's gonna write a check. It's like in VC's minds or investors' Minds , um, these guys are gonna go have 10 meetings and no one's gonna write a check, right? Anybody [00:09:29] S1: Can do this as long as you have like this , it can be your first round. But like if you have us as a VC and you're raising the next round or anybody as an investor and you're raising the next round, like that's a pretty easy ask to your investors, Hey like can you help me drive FOMO by just like, you know, kind of saying that, you know, and maybe it's not even that much of a lie. 'cause by the way, if you don't raise, you will probably back me anyways. Like, unless you really don't like me. So I think that's just something everybody can use. What
00:09:29 · Pablo Srugo, Lee Silverstone
[00:09:29] S1: Can do this as long as you have like this , it can be your first round. But like if you have us as a VC and you're raising the next round or anybody as an investor and you're raising the next round, like that's a pretty easy ask to your investors, Hey like can you help me drive FOMO by just like, you know, kind of saying that, you know, and maybe it's not even that much of a lie. 'cause by the way, if you don't raise, you will probably back me anyways. Like, unless you really don't like me. So I think that's just something everybody can use. What [00:09:53] S0: About first time founders? What about first time founders? How do first time founders build that like, you know, build that we're gonna go raise regardless of you ? I mean for us at Gym Track as first time founders for sure was 500 startups, like getting into an accelerator. That for us was for sure the like impetus or the driving factor behind it. What else have you seen from like first time founders? [00:10:16] S1: I think it's that, right? Like it's, it is back to that framework. Like you have to have enough like built like in terms of relationships that you can actually like make that credible. And I think like as one of the, one of the tips I think like first time founders like getting into an accelerator, it it like if obviously if you can go to yc yc, if you can go to 500, 500 if you can't go to texts , like, but basically going down the list. Yeah . Like [00:10:38] S0: Were you just rank , were you just ranking all the accelerators in in your, in your list? You were just