Elad Gil's 5 Fundraising Tips for Founders

Today's fundraising tips come from Elad Gil, one of Silicon Valley's leading investors and startup advisors. Gil is the author of the influential book High Growth Handbook and has backed numerous unicorns, including Airbnb, Coinbase, Stripe, Pinterest, Square, Instacart, and Gusto. He previously held senior roles at Google and Twitter and co-founded Color Genomics and Mixer Labs, which was acquired by Twitter. Here are some of his best tips for startups raising capital: - Pitch friends and advisors first: "Your first few pitches will likely suck. Take a few days to practice your pitch on advisors, other entrepreneurs, or on angels you really don't want to raise money from. Else you may spend a few weeks getting nos." - Helpful investors > valuation: "If your company does well, you will be working with your investors for the next 5-10 years. As such, you should optimize for (i) who can help your company and (ii) who you have good personal chemistry with. It is a long road. Over optimizing for valuation and brand tends to be a common first-time founder thing. The specific partner at a fund, or set of angels you work with is more important than a bit more dilution or a brand name firm with a partner you don't really get along with." - Schedule investor meetings in sprints: "You should schedule all your VC meetings in as short a time period as possible. This creates buzz, momentum, and an auction dynamic, preventing early 'no's' from hurting you and increasing your confidence and negotiation leverage." - Don't disclose which investors you are talking to before they sign: "Never, never, never tell a venture fund who else you are talking to until a term sheet is signed. They will call each other and collude. You want all the funds to be competing against one another to drive up your price." - Choose the right partner at a VC: "It is important during a fundraise that you get introduced to the right partner at any given venture firm. Often, the person you get intro'd to first at a partnership takes the lead on representing you to the full venture partnership as well as takes the board seat if the firm invests."