What to do with non-lead investors + Fundraising Fieldnotes - 10.22.21

Hey - it’s Jason Yeh 🕺🏻

This is my Friday recap of thoughts I’ve had while helping founders solve their fundraising challenges this past week (10.22.21)

If you have any questions, please reply! I try to get to every comment/question I get :)

On to the Fieldnotes for 10.22.21…

Non-lead investor says they’re interested but doesn’t offer to make intros to leads 🚩🚩🚩🚩🚩🚩

Lots of follower funds out there…

Calling out and explaining this red flag was originally going to be the first example in a piece covering a series of short red flags within fundraising. Instead of going a mile wide and an inch deep within a stale meme, I’m going to hone in on this somewhat ambiguous concept.. It’s a great opportunity to share more details on: 

1. What a non-lead investor is

2. How they operate / What you should expect

3. How you can leverage them

What is a non-lead?

To start, it would be helpful to understand what a non-lead investor is. While simple sounding, this is not so crazy of a starting point because many founders I talk to don’t realize that “Lead Investor” isn’t a formal term that the NVCA or some set of laws defines. It has a loose definition at best. In my essay comparing leads with co-leads I offered this simple description of a lead investor:

In the most traditional sense, a pure lead investor is 1) going to have at least 50% of the round and 2) will set the terms 

So with that directionally accurate description of a Lead, a non-lead is a bit easier to define:  An investor who has less than 50% of a round and who won’t provide you with a term sheet.

How they operate / what you should expect 

(continue reading…)

---

Storytelling is important

Justin Kan @justinkan

I've raised over $150,000,000 as a founder, simply by being a good storyteller. Here's how to get VC's to throw money at you:

Unpopular opinion: doing things to sound good to investors will help your business

Jason Yeh @jayyeh

This has come up a lot with founders recently so sharing more widely It's en vogue to hate on VCs and can be easy to poo poo doing things that investors want to see, but in most cases they want to see it because it's good for a company... 🧐

Till next week. Stay adamant and be chased.

Jason

p.s. DYK Squid Game is reportedly set to drive $900MM of value for Netflix??

Small asks!

If you thought this was helpful or enjoyable in anyway, I’d love for you to:

• Forward this newsletter with others who would enjoy it

• Follow me on Twitter where I’ve begun building in public (my course, my podcast, etc)!

• Listen with a friend to Funded, my podcast that tells the rollercoaster stories of how founders raised millions (and subscribe🙏)

• Ask me your fundraising questions so I can help you and cover them in a future issue