A few weeks ago my episode with Nancy Xu, founder and CEO of Moonhub dropped on Funded. In 2023, one of the harder times for fundraising, Nancy closed a massive $10M seed round lead by Google Ventures and Khosla Ventures. Naturally - I wanted to learn more about the logistics behind this raise and how it all came together.

Impressed is an understatement when it comes to this episode. I'll push you to go watch the full conversation, but if you refuse, at least hear my top 3 takeaways:

1. Plan your next round ahead of time

“Once you raise your first round, start to think about what the deck would look like for your second round. Not because you're thinking about how to raise the second round right, but because you're starting to think about what are the milestones you want to actually hit before you reach it. [You don’t want to get the point where you’re asking], "I have six months of runway; have I really thought about the milestones I'm trying to hit here?”

Look, this advice is pretty spot-on. It's not just about prepping for your next round of funding; it's about having a strategic approach to running and growing your startup in general.

Milestones create organization for your company... and also for investors. When you're buried in the day-to-day grind of running your startup, it's too easy to lose sight of those milestones.

Imagining your next pitch deck forces you to look up and see where you're actually heading and start planning how you'll convey that to investors. Because remember - your pitch deck is not just for investors; it should also serve as a tool for you and your team. It should perfectly showcase who you are, what your company has accomplished, and where your company is heading. I actually had a founder tell me the other day that they also use their pitch decks for new hires for the exact reasons I just stated above.

Overall - If you can't picture what you'll be telling investors in a year, you probably don't have a clear enough strategy. Start working on it today.

2. How to handle investor conversations before you are fundraising

"I think it's very fair to say: ‘Look, I'm not looking to raise now, but here are some things I'm thinking about. Can you help me with x, y, z things?’

I think a lot of that is a process of building relationships with investors that you like and maybe would like to participate in your next round."

I say this to everyone - there is absolutely no harm in meeting with investors before you're raising. But you HAVE to mean what you say - you're truly not raising. That means you cannot flip into pitch mode when you feel like they might be interested in becoming a potential investor. Unless you're running a full process, don't. Do not give an investor the opportunity to evaluate you on an island by yourself.

If you have enough interest, meeting with investors before you're fundraising is kind of like giving them a little homework. You can ask them for help with something specific and see if they actually bring value.

This move is genius for a couple reasons.

First, it's a win for your company - you might get some free advice or connections. But more importantly, it gives you a chance to test-drive the relationship. Think of it as investor dating. You're checking if you click, if they're actually useful, and if you'd want them around long-term.

On the flip side, investors like this too. They want to feel comfortable with the team they're backing. By giving them these little tasks, you're offering more touch points for them to see how you think and work as a team. It helps them get why you're worth investing in.

3. Build a company that will last

“A lot of people think about ‘How do we build a company to raise money?’ I think this is the wrong way to think about how to build a company.

Frankly, I think you should really think about a company from [a perspective of] ‘How do we build a company that is going to be a lasting and enduring business?'‘

Almost every founder I interview who has raised venture capital says something similar. That immediately should tell you something.

To simplify it for you - investors want to invest in great companies they believe will grow and last... and in turn 100x their money. That's the bet that they're taking.

If you were an investor - what would you have to know in order to take that bet?

Alright! That's a wrap on my takeaways. If you want to hear the FULL story, I'll leave the links down below.

Be chased,
Jason