VCP 100: Nominate the Top Utah Founders VCs Must Watch! Nominate Now

Jon Bradshaw & Peter Harris

How do you find a venture capitalist for your startup? We talk about all of the different ways you should pursue to get funding for your startup.

How To Find a Venture Capitalist

How to Find a Venture Capitalist (And Get Funded)
Let’s talk about how do you find a venture capitalist for your startup.

Questions Covered in This Episode Include:

  1. What is your general advice for someone raising in 2022?
  2. Has the process changed in recent years?
  3. Will the process change in the coming years?

Now lets cover some common questions to make sure we’re addressing them

  1. Should I focus my efforts on VC’s in my geographic area, or extend beyond my city/state?
  2. How accurate are online lists? What arethe good ones?
    1. Angel List
    2. Forbes Midas list
    3. Crunchbase
    4. CB Inisghts
    5. PitchBook
    6. Others?
  3. How do you find a venture capitalist that is a good fit for you?
    1. Size of business (Idea, Pre-Revenue, Etc.)
    2. Industry
  4. What about VC’s that focus on particular industries like Blockchain, Healthcare, or SaaS? Or should we look to a generalist?
  5. What are your thoughts on professional fundraisers as a source?
  6. Is it worth my time to network and build relationships with local entrepreneurs to ultimately find a VC?
  7. What do VC super connectors look like?
  8. Does the process change if I’m a college student or a new entrepreneur?
  9. Does attending a boot camp like NewChip, TechStars, or YCombinator help?
  10. Would first signing with a syndicate, like Jason Calcanis’, increase my odds?
  11. How helpful is it to attend events and virtual conferences with investors present?
Hosted By

Episode Transcript

Jon: Welcome to the Venture Capital podcast. I'm here with Peter Harris with the University Growth Fund. And today we are going to talk about how to find a venture capitalist for your startup.
Jon: I know this is something that we've been talking about because we own appointment dot com and I'm like in 2022. I'm not sure if the methods that worked five years ago are the same things that happened today. So on this podcast, let's kind of go through it. So the first question is, is Peter like you're like, what is your general advice for someone raising in 2022?
Peter: Yeah, so it's a good question. I mean, I think at the start out there's a whole bunch of tools that exist today that didn't exist before. For example, one of my favorites is Signal and Effects, and it's this great database of VCs and the kind of stuff they invest in. If you know somebody that has an account to pitchbook, that's another good place.
Peter: And basically, like the way I would approach it is I would start looking through the different types of VCs have invested in companies similar to mine and target those funds. And ideally you want to look not just for the fund itself, but for the actual partner within the fund that's doing those deals.
Jon: Does signal provide.
Peter: That? They do, actually, yeah, it's great. It's a free tool, so I highly recommend it. Pitchbook also has similar data, but you know, that's a paid subscription, so you got to either pay for it or get some help on that one.
Jon: Crunchbase or AngelList wouldn't have that kind of data.
Peter: No, they both they both do. But, you know, Crunchbase doesn't you know, it can be a little bit hit or miss sometimes.
Jon: Because angels would just say, if I'm with this fund, this fund has been invested in these deals. But you're saying that you're trying to find let's just say we're targeting true ventures. Yeah, True Ventures has worked a lot with scheduling apps and there's also a particular VC there. Crunchbase would never cover that. Angels wouldn't cover that unless and.
Peter: Crunchbase my here and there also show that oftentimes even the website will have that information on it. So, you know, you can see what, what deals the partner's been on a signal will have that to some extent Pitchbook is will probably be the best because it will actually show you who's on the board of those different companies. So, yeah, I mean, step one, find the VCs that are actually relevant to you.
Peter: And then the next step is you've got to get your foot in the door with those VCs.
Jon: So I guess my next question is, has it changed in recent years?
Peter: You know, I don't think it's changed all that much, only that that there are a ton of VCs today that didn't exist. Five years ago. There are more and more people flooding into the market there more there's more money in the market. So that's change. And then, like I said, like signal on effects and a bunch of these other tools.
Peter: They also didn't exist five years ago. So to a certain extent there's a huge advantage to be able to tap into a lot of those tools. And frankly, there's also a lot more funds out there that you can approach.
Jon: The number of fake VCs increase because I would assume over the last five years that's probably increased with the popularity of wanting to seem important to get exposure.
Peter: So how do you define a fake VC?
Jon: A fake VC is someone who might say they're an investor on LinkedIn and has never invested more than five K into a startup. I mean, I would say someone should be putting an investor on their title on LinkedIn unless they are like, you know, they've got a fund of at least 100 K minimum, preferably am in a million or more.
Jon: Yeah, be like a true investor. Otherwise you're just like, guess it's more of a hobby.
Peter: I mean, I would almost argue if you only have a fund that's 100 K, it's more it's mostly a hobby.
Jon: William Blake You could be like a personal angel investor and do an angel investment of like 20 5ka year.
Peter: That's fair. That's fair. But that's different than having a fund, right? That's having 100,000 allocated towards seed stage investments or Angel stage ventures.
Jon: Right. But there's a ton of people I see that are investors as part of like a pseudo way to get clients for their business.
Peter: yeah. I think that's those are significant. I mean, there's a spectrum, right? Because on the one hand you have people that, you know, maybe they put $5,000 into an equity crowdfunding deal and call themselves a VC all the way up to still, in my opinion, kind of a fake VC. If it's somebody that represents that they have decision making, power check, writing, ability out a venture fund, but they actually don't write so that they can associate like an associate somebody or sometimes they'll even be a quote unquote partner but still not have check writing ability and they'll string entrepreneurs along.
Peter: So sometimes those fund sponsors can be super legit and they can do very big deals and they have a very dedicated investor base behind them and very legit. Right. Just as just as legit as a, you know, a partner at a $300 million dedicated venture fund. The flipside is, though, that they can also be a little bit fly by night in that they can promise an entrepreneur, yeah, like we're in for 10 million, 20 million, 30 million, whatever it might be.
Peter: And then they're not able to pull it together and they kind of leave the startup high and dry, which, you know, unfortunately I've seen happen a few times this past year.
Jon: A few times. So like, how common is this? I don't think.
Peter: It's like super common because I think most people are, you know, sensitive to the fact that they don't want to overpromise and under-deliver generally, But it is something like you have to think about as an entrepreneur if you're going to take money from a fund, the sponsor, you have to have a high degree of conviction and confidence that they're going to actually be able to raise the money from their network of investors.
Jon: What are some examples of funnel sponsors that might exist here locally in Utah or nationally?
Peter: So here in Utah, there's there's a funnel sponsor, David Jensen with and Light Ventures. Okay. you know, he's done a bunch of deals this year and there's also another group called Sandbox that I know well, yeah, and then you've got Usher and Landon and Landon at Usher does a bunch of SPVs and a startups.
Jon: You would call Syndicate as a funnel sponsor.
Peter: Yeah, of course.
Jon: Okay, Got it. Good to know.
Peter: Well, I mean, a syndicate in terms that. That's what he calls it, right? It's the issuer syndicates. Same thing with angels indicates. Right. You don't have a dedicated fund. You're going to investors. You're convincing them to do the deal with you. You bring them in to an entity, usually an SPV, a single purpose vehicle. And then that single purpose vehicle makes the investment.
Jon: Okay. So the last question here before I get into just a bunch of specifics, are will this process change in the coming years? You've got this this website that shows you what investments are done. Who particular has done it and or what boards they're on. And you're just going through the database and you're just saying how do I find something similar?
Peter: Yeah, I mean, I just think there's going to be more and more proliferation of tools, right? So Andreessen Horowitz just backed a company called Stocks dot com. It's pretty interesting, kind of a equity raising platform that has a bunch of videos on it of entrepreneurs pitching and then accredited investors can, you know, quickly view a bunch and make investments.
Peter: So you know, you've got Republic, you've got WI funder you've got seed invest. I mean there's, there's a long, long list after that too. So I think there'll be more and more of those types of platforms popping up, that will enable entrepreneurs to find VCs. And then another way to find VCs is to talk to entrepreneurs that have raised money, okay?
Peter: And the more successful that they are having raised money in terms of like the type of fund that's invested in them usually means that they probably met with a lot more funds than just that one. Right? So Excel or Sequoia or, you know, or Founders Fund, one of these large, well-known reputable funds, invest in a company that entrepreneur in all likelihood, probably met with all of the rest that he didn't take money from.
Peter: And they can be a valuable resource as well to making introductions and pointing you in the right direction of what VCs would find your particular startup interesting and which, you know, might be wasting your time.
Jon: I think that's a common one that that's shared with a lot of people. Let me ask this question. Should I be focusing on my geographic area to find a VC for So, like, let's say we are raising for appointment tomorrow. Should I go? Hey, we've got Kickstart locally, we've got album, we've got. they just do the job and Ventures.
Jon: Petersen Ventures. Well, someone that just invests in. Let me grab your name real fast.
Peter: You've got Peat Capital.
Jon: P, Capital, Pickle Tamarack, You.
Peter: Have Tamarack, which is a family office.
Jon: Okay. And there's a bunch of other family offices. Like if I'm going to fundraise and if I'm from the state of Utah, should I approach there first? And the reason I'm asking is and a prior startup called Tiny Torch, we were looking to raise and we met with True Ventures. And one of their questions was as well, why aren't you first raising or getting a lead from your local state?
Jon: Like how do we know we can trust you as a foreigner? And they I felt like they were looking for that signal of a local VC that was interested first for before they wanted a bite of the apple.
Peter: Yeah, I mean, it's a good question. You know, most early stage funds don't travel geographically as much as later stage funds do. So, you know, in that case, like, there is a feeling of like, hey, it would be nice to if I'm going to invest outside of the state, to have somebody in the state that I know and trust that's coming in alongside me, that's kind of capturing some of that insider knowledge within the state.
Peter: Look, I think you should absolutely pitch to funds in the state where you are that are geographically close, that in all likelihood you probably have better networks, better relationships that can get you in front of them. And it can't hurt the flip side is you want to be a little bit careful as an entrepreneur that you don't only take money from funds that are geographically close because it could be that there's a better partner based on your business type somewhere else, you know, outside of your geographic area.
Peter: And it may also be that that the local funds try to take advantage of you by being local and you end up with a slightly lower valuation than you could get if you had gone. And but.
Jon: Once you.
Peter: Entertained people from the coasts.
Jon: What you had a term sheet. As long as there's no order, no shop clause, you're probably fine to keep looking. Right? And then at that point.
Peter: Yeah, tunics.
Jon: Market might balance out. I think the biggest question right in my mind is, you know, how much time should someone spend pushing for funding if you can't get back in, you know, buy in from the local community, You know, should I hop on a plane and say, hey, like, be like Gary like Gary? literally when he was raising for a scan, took 47 flights to Silicon Valley before he got aerial poller to lead his round in and run with it.
Jon: And so in that case, he was lucky. But I kind of feel like, at least in my case, you know, maybe that was their excuse. But I felt like not having a local fund participating at all, even if they weren't leading, was a big stumbling block.
Peter: Yeah, I don't know. It really it can be a stumbling block because it's, it's, it's a red flag, right? It's like, well, if you have such a great company, then how come Kickstart or album or, you know.
Jon: Whatever the fighting.
Peter: Is, how come they're not fighting to get in. Right. Okay. But, you know, the flip side is like, look at I'm not sure. Back in the day, right. Josh went to like all the local VCs, they all turned him down, went to Silicon Valley and ended up raising money from Hammer Winblad. And their comment was, if he had been here in the Valley, in Silicon Valley, we would have never been able to get into this deal because, like, it's a really interesting, compelling deal a lot of other people would have, you know, got it before us.
Jon: So with Josh James and John Boston and years ago, there wasn't a market here in Utah.
Peter: For, but there were still venture funds.
Jon: Much less than today. But even still though for sure were to Silicon Valley.
Peter: But there were a lot less in Silicon Valley as well.
Jon: We're still sub10 venture funds that are significant in Salt Lake City.
Peter: Yeah, but on a population like that level, it's actually a lot like what other what other, you know, market or ecosystem of what are we at like half a million people or something like that has as many venture shops as we do. I'm not sure. I mean, look, even look at Austin, right? Everybody talks about how great Austin is.
Peter: We have more venture funds and more venture dollars being like. But in funds here in Utah than Austin does. Okay. So I don't know. I don't buy that. I think I think actually, Utah had a lot of your money.
Jon: Okay.
Peter: On a relative basis.
Jon: For the next question, let's talk about list and how to find VCs as a good source. So you said you like signal facts, correct? Yeah. What are your thoughts on Angel? Is it like is it valuable now? Is it not valuable?
Peter: I think Angel is can be valuable. It's a little more geared towards like angel investors and seed stage investments versus like a like series A.
Jon: Could tension on depends.
Peter: On what you're what you're raising.
Jon: For to raise for VC Does having an angel help or hurt if you're looking?
Peter: it depends on the angel generally speaking.
Jon: In general.
Peter: Just having like, some random angel.
Jon: Yeah, not like, not like Ariel Polar would be.
Peter: It doesn't really matter.
Jon: Does it matter?
Peter: Okay, I don't think so.
Jon: It doesn't help. Doesn't hurt.
Peter: Now, if they're a known entity that has a negative kind of like reputation, that probably hurts. And if they have a really good reputation, it probably helps a ton. Okay. So, you know, it can cut both ways.
Jon: All right. Next question. The Forbes Midas list. I a I assume you're familiar with it. of course. Is it a goal to be on that one day now? All right. Should I try to start there and just say, hey, who on the Forbes Midas list? And should I go top down?
Peter: I'm sure. I mean, it's a list of VCs, so. Sure.
Jon: The top 100 something.
Peter: That's funny, though, about the Midas list is that it's not actually like performance driven. Okay? It's more like, this partner was affiliated with this deal. And we know that this deal like, did really well.
Jon: And so it's sort of like, who's got the Midas touch?
Peter: We're going to we're going to assume that they did really well. But like, you know, I was talking to a friend of mine at a fund and has fun. He has two people on the Forbes Midas list and two of his partners are on it or have been. And they were like, yeah, like, we're on it for, you know, this deal.
Peter: But the reality is like, that deal did okay. We made way more money on these other two deals that like nobody even knows about. So like, yeah, Midas list it's cool, right? It's, you know, Pats amigos and it can it's a list of top tier venture capitalist, no question. Right. Yeah, but it's not always correlated with who's the best investor.
Peter: Okay? And it's also not necessarily correlated with who's the best investor for you. Okay.
Jon: CB Insights.
Peter: I mean, like CBN, I don't remember how much CB Insights is, but Pitchbook is like $20,000 a year. Okay, yeah, they're going to have better data, but I would hope they.
Jon: Would if I'm trying to fundraise, should I find someone with a subscription to CB Insights? I know a lot of local. I assume our SAS sales reps have have licenses.
Peter: Yeah, I mean, I haven't honestly use CB insights a whole lot, so I really can't speak to it, although that does remind me. They're in every market that I've seen. There's usually like some community group, and they oftentimes are collecting a ton of data around investors and stuff.
Jon: Like the Angel Capital Association, like the Angel.
Peter: Capital Association in Utah. There's, and in the mountain regions, there's the Rocky Mountain Venture Capital Association in Atlanta, there's venture Atlanta, there's hippopotamus, there's silicon slopes here in Utah. Like there's a bunch of like news sources and community groups that aggregate a lot of this data as well and publish reports. And so oftentimes you can get those reports either for free or for very low cost, and those can be great resources as well.
Jon: Okay. Are there any other that someone should have on their list of like what about a Twitter list? A Twitter list might be a good example. There's a bunch of them are, you know, should I is that a good place to go if the most active on Twitter? Sure. I mean, I don't know how VCs love Twitter. So why do they love Twitter so much?
Peter: I don't know. Because they like they like to post things that make them sound smart. And, it's it's not as time intensive as other things like blogging.
Jon: Okay, what about so next, actually, we've talked about this a little bit, but you would use signal effects to find someone that's, you know, like invest in similar sized businesses and or industry. But like, if someone when is if you're looking for someone, when was it too close to your industry.
Peter: Like like you don't want to go to a VC that's invested in a competitor.
Jon: I mean, it's like for appointment. Should I go to the VCs that bought that backed Coulombe?
Peter: Sure, why not? Yeah, because they're probably. Well, are they still in counseling?
Jon: I don't know. But whether they still would've gotten a return.
Peter: I mean, maybe if they're still in it, then maybe you don't. Right. But if they were in it and then they've exited. So for example, you know, we're looking at a deal right now in the rideshare space. But, you know, part of that is because we invested and left and we did pretty well on Lyft and and we like the space, right?
Peter: So but we're out of Lyft, like we've we've sold our shares and we've returned our investment back to investors who are out. So there's no real conflict there. I think if we were still an investor in Lyft and we were looking at a company that was really a direct competitor, like.
Jon: We.
Peter: We in our case would probably pass.
Jon: So what are your thoughts on using a professional fundraiser as a source of finding investors and VCs?
Peter: So what do you mean by professional fundraiser?
Jon: Someone who, who does this as a as a living? I mean, we've got some.
Peter: Like an investment banker or just somebody that's like super well-connected. So, like, I mean.
Jon: There's like, there's some like, we've got friends who say, Hey, I'll help you go raise raise a fund. They'll try to get a cut or whatnot. Yeah, probably someone who does this actually for a living and who would be certified by the FCC.
Peter: Okay. So they're they're a broker dealer.
Jon: A broker dealer?
Peter: Yeah. yeah. I mean, they they can be they can be helpful in a lot of cases, right? We have friends that have done it and helped a lot of companies raise money.
Jon: Is that a good is that a good avenue to do it, or should you wait till, hey, I've raised half my fund now go to them and get them to close. Help close the second half.
Peter: I feel like if you're coming at this in your brand new and you don't have a lot of relationships already, that they can be really helpful in terms of like opening the door to a lot of different groups. I think there are cheaper ways to do it personally, right? So like we mentioned earlier, like going to other entrepreneurs that have raised building relationships with them and having them make those those intros.
Peter: But you know, sometimes it can be really helpful just to bring on somebody that's that's paid and full time focus on helping you fundraise. I don't think there's necessarily anything wrong with that. From the entrepreneur perspective, it does signal a little bit negatively. so when I meet with somebody who is a professional fundraiser and it's obvious that they're just there, they're like, help the company raise, I'm always a little like more hesitant because it's like, okay, well why can't you just do this yourself?
Peter: Like, is it because your company is not that interesting? Is it because you as an entrepreneur aren't that compelling? Like you're not able to to raise money, right? Like those are things that like make me as an investor, like pause, but not necessarily. It's not a deal killer. That said, like, look, as an entrepreneur and this is important as an entrepreneur, if you're going to build something big, one of the skills you need to have or you need to develop over time is the ability to fundraise.
Peter: Because in today's day and age, like so much of success, is driven by your ability to fundraise and then take that money and put it to work efficiently for growth. and that's how you compete in large part, right? You think about Uber, Uber in large part one because they could out fundraise everybody else. And so that is like a really valuable trait.
Peter: And so as a as a VC, like, that's something I care about. Like, can this entrepreneur raise money? Because the last thing I want to do is put money into a company and then the entrepreneur can't raise any more money and the company burns through all the cash I gave them and then files bankruptcy, right? Like there's no bueno.
Peter: Did you.
Jon: Cry? Had that happened to you before?
Peter: I mean, to a certain extent. Like, every every company that's failed fails because it runs out of money. Okay? Right. So, yes.
Jon: Okay. What about of like, is there a thing like a C super connector? Like, are there people who just somehow that aren't VCs that tend to gravitate have trust of Ava? AVC Like, what would that person look like?
Peter: Yeah, no, there's definitely those kinds of people. so you see them in a lot of services industries. Okay, So lawyers, accountants sometimes will be like that, especially if they're really good at networking. You've got people that work at like accelerators, and angel groups that sometimes fit that role, sometimes just angels themselves, right? They're, you know, they're not a VC, but they are actively investing and they kind of know everybody.
Jon: So if I'm trying to fundraise, would it make sense to, to instead of finding maybe a local Utah attorney say, hey, I mean, and maybe a local Utah attorney could help, but it's say, hey, let's go to Wilsons and senior, one of these Fenwick and West and one of these top Silicon Valley brands build a relationship with V.C. as your in-house or not in-house, but as your counsel.
Jon: Is that would that be is that probable or not probable?
Peter: Yeah. I mean, I think back in the day, it used to be that attorneys drove a ton of deal flow back to VCs. I don't think that's the case as much anymore, honestly. I think they can be helpful. But I would think less about like, I need to have Cooley or I need to have Wilsons in Senior, I need to have Gunderson because they can connect me to all these VC funds and think more about, Hey, is there a partner at any law firm that's got a lot of connections?
Peter: That's a believer in what I'm doing that can open some doors for me.
Jon: How would you identify that person?
Peter: Well, are they doing a lot of deals in and around your space? Okay. And how would you have a good relationship today?
Jon: How would you find an attorney or an accountant that does that? Would you just have to go to the local like Utah or others and just stay plugged in?
Peter: You could do that. You could also just look at you could reach out to entrepreneurs and say, Hey, who did you use and who did you consider for your counsel? Okay, you can talk to venture funds, ask the same thing. Like who? Who in the market do you trust as an attorney when when it's either representing you or representing the company?
Jon: Hey, Peter, who's an attorney in the market that you trust?
Peter: You know, I'm going to give a shout out to my my good friend James Platt. Over it, counselor.
Jon: Okay.
Peter: Here locally. Okay. So he's, you know, in full, full transparency. He's one of my former students, but he he's awesome.
Jon: Okay, sounds good. so you talked about boot camps. Like, are things like new Chip, Techstars, Y Combinator or other accelerators. Would that be a good way to get VC funding to say, Hey, I'm going to approach these groups first, I'm going to get the program and then leverage their network?
Peter: Yeah. So my, my feeling on accelerators is that they are like MBA programs. You go to an accelerator for three things. You go for the brand, you go for the network and you go because maybe you learn something. They help you with your business.
Jon: So you don't think you get funding from them.
Peter: I mean, like what do you get funding wise? You get like 20 grand in most cases.
Jon: They open the.
Peter: Door. I mean, Y Combinator opens up a lot more.
Jon: But does it is Y Combinator in 2022? I don't see Y Combinator as a compelling reason for me to like.
Peter: Why we moved to Y Combinator.
Jon: Well, they have what, 100 to 200 plus companies each round and they do 2 to 4 a year.
Peter: Now they like invest in tier two for a year.
Jon: I mean, I mean.
Peter: They invest in all of them to a certain extent.
Jon: We could provide the stats on the on the screen here if you're watching on YouTube. But yeah, like I don't.
Peter: I mean, like I still think Y Combinator is a really strong brand as as maybe it's been diluted over time as they brought more people into the program and run more cohorts than they used to, probably that's probably fair, but it still helps. But it still helps, I think.
Jon: But being part of Techstars helps.
Peter: I think so.
Jon: Would you? And your chip is, I don't know. I think they're based out of us. I've got a friend using them right now. He loves their documents, but I don't know if it helps or not.
Peter: Like I think. Right. The, you know, different school like state schools have MBA programs. Why do they have an MBA program if they don't have the best brand in the world? Well, because they may be specialized in helping their students with one thing or another. Right? They may provide a local network that's valuable. They may. They may have a great education.
Peter: Those same things still matter if you're working with a, startup accelerator. That's not super well known like Y Combinator or Techstars. Now the flipside is you go to Harvard, you go to Harvard because the network of the network and because it's Harvard, the brand, right? And then maybe you learn something cool, right, while you're there. and I think that's the same thing.
Peter: Y you would go to Y Combinator or Techstars, right? It's a, it's an amazing network. It's a great brand. Okay. Right. And maybe they help you a little bit. Okay. But that network, like I know a bunch of people have gone through Y Combinator and the networks are really powerful. Like they really step up and help, They make introductions, they give feedback and guidance.
Peter: Like what? And those things can help you raise.
Jon: Which will it be where they're at today? If they hadn't gone through Techstars.
Peter: I'm not close enough to get to know one way or the other. Okay. Honestly.
Jon: Okay. On the flip side, lose the chart applied to an accelerator locally. Didn't get it. Now they're a multibillion dollar company, so.
Peter: Clearly they didn't need it.
Jon: Clearly.
Peter: Okay, but look how many people never go to college and are billionaires.
Jon: Yeah, true. But what about Syndicate? So, like, we talked about like funnels funds.
Peter: Yeah.
Jon: Jason Calacanis is like one of my I don't, I don't want to call him Iroh an idol, someone who I feel like who's like a distant mentor because I've never personally met him. Yeah, but he talks a lot about like he's got his syndicate. I'm wonder, do you know what? Maybe that's a better way to raise funding or to to attract a signal.
Jon: Because a lot about raising funding is just signal signaling.
Peter: Yeah, there's a lot of FOMO. Right. And Venture is like, wow, if you're in there, wow, that's must be a really good deal. I got to get in.
Jon: I feel like my biggest the hardest part about me for fundraising.
Peter: Is creating.
Jon: FOMO.
Peter: Creating FOMO. Yeah, that's fair.
Jon: I just want to be a shooter where other my friends are. Like, This is what's happening. I'm like, I had one friend who lived with me, not to mention name and the things I heard that entrepreneurs say and the things that actually were true under the hood. I'm like, Man, this the delta is just huge, huge. And I'm like, I don't feel comfortable.
Peter: Like it's like the Theranos argument, right? Where's that line? Because every entrepreneur, to a certain extent, like they're pushing the boundaries of of reality just by being an entrepreneur generally, right? So they have this vision that they're they're trying to communicate. But there is a definite line where like you are just straight being dishonest versus selling a vision.

And I think good entrepreneurs are able to sell the vision without crossing that line of being just it's it's super tricky.
Jon: It's super easy.
Peter: It is super tricky. And look like I'm.
Jon: On the one side because I'm just like, I don't want to say anything that I think I could could do. And I think.
Peter: I don't know. Ultimately, it always comes back to bite them. If you lie and you can't deliver.
Jon: You can't raise your next fund.
Peter: You can't raise your next round.
Jon: But then how many times? But mostly as a VC podcast, I listen to you. They say, What startups actually ever hit their numbers? we think we can be here.
Peter: I mean, it's a pretty low percentage, but the reality is venture is a parallel game where there's a handful that do hit their numbers and those are the ones that drive the returns. And let's think about it this way. Would you want to invest in a company that doesn't shoot for the moon? No, probably not. And venture right.
Peter: Like in Venture, you're all about like, hey, I got to get into the next huge big thing because that's going to drive all the returns. And so if a company pitches me and they're not even like trying to be the next big thing, then it's like, great. Like you don't even think you're going to get there. Why am I going to believe, yeah, I'm out, right?
Peter: Yeah. So, but yeah, it's, it's a game and that's, that's why VCs that are good do their diligence.
Jon: My last question is, is does attending a local local networking events help like silicon?
Peter: I think so. I think they can be helpful.
Jon: That should you like. One thing that Seth Godin has always talked about is building their relationships. You want two years before it's going to happen, right? So he says, if you want to be a real estate agent, just to take a tangent, yes, join the PTA two years before that where you're not selling anything, you can build authentic relationships.
Jon: Yep. And then when you're ready. So, like, I mean, I think if it were me, if I was wanting to fundraise and I was a college student or coming out, you know, was an unknown, being part of an organization contributing building, my brand that way would be a powerful way.
Peter: Do I totally agree.
Jon: Okay.
Peter: What college students like, they should be out networking and leveraging their student card to the hilt. But they're not. But they don't.
Jon: Actually. They're on Tinder way too much.
Peter: Do you say so, John?
Jon: I know from firsthand experience my wife back here met a bubble. All right. So are there any things that we miss, Peter, that would be helpful to talk about how to find a VC for your startup?
Peter: So I think, like VCs are pretty easy to find, right? There's lots of lists of venture funds that are out there, right? There's lots of tools. I think the more challenging thing is finding the right angels for your investment, Right? Okay, We.
Jon: Should do that as a follow as a follow up podcast, How to Find the Right Angel for Your Startup.
Peter: And yeah, I mean, I think that's a little more tricky because there are a lot of angels out there, but you don't always know who they are and they, you know, and how to get in front of them. And the other thing is how to differentiate between the angels that are going to be good investors for your startup and the ones that are going to be like a disaster and you should stay away from because they're the the spread between like very high quality and stay away, right, is so vast with angels in comparison to venture funds.
Peter: Like if you've raised money and you're an institutional venture fund like people, you know, you may fall somewhere on a spectrum, but it's going to be a much tighter spectrum than in Angel land. so I think honestly, though, the answer's still the same, which is leverage the race, the relationships you have work with entrepreneurs, other entrepreneurs have been successful raising, find out who they raise money from and get their recommendations and then get old.
Peter: Really make intros. Yeah.
Jon: Are there any items.
Peter: Which is not super unique, but it's super powerful if it.
Jon: Is super powerful, super time consuming. So it's something you have to really plan and commit to.
Peter: Put it in advance.
Jon: Put it on your vision board. I think all the things that we we think about, we want in life, most of them take longer to obtain than we think. And so we just have to be slow and steady and and make those commitments. Hey, my goal is I want to start my own company. I want to be venture backed.
Peter: I think those are some things people just drag their feet on. I think people are they just got to stand up and do it because they are afraid, right?
Jon: Gary G had no connections and went and one of the things I like about the so we've talked about finding people to help help is Gary G was a student of my while he taught at a local university. Yeah and literally I'm like this he needs to make it. So I met with him and said, Hey, I'm going to introduce you to all of the angel investors in Utah.
Jon: Yep. Some of them might offer you money. Don't take it. Use it for practice. I mean, if you get a good deal, you get a good deal. But my guess is once you get that experience, then immediately go to Silicon Valley. I didn't have connections at that time, but he did 40 intros in Silicon in Utah. I think that really prepped him and he learned how to answer the tough questions.
Jon: That's what I'm assuming. And Gary might know. So you're wrong. But like I introduced him to like David Bradford to a lot of people who had taken funding. Yeah. And then he went and then raised a two, I think was a $10 million round the first time as a in college. It's pretty good And he had no revenue but he had a ton of downloads.
Peter: Yeah, I mean he had a product that was taking off that was interesting. Yeah.
Jon: So, yeah, well, that's good. That's good. So I think that's all I have for this podcast. Join us next time. We'll talk about this. When we talk about how to find a VC, the next one we're going to talk about how to get their attention.
Peter: How to land it, how to land it.
Jon: All right. Well, thanks, guys. We're watching to make sure you like subscribe, check out Peter Harris. Go to if you want, Get in touch with Peter. We'll have his links in the bottom of this episode. All right. Thanks, guys. Thanks so.