Noah Lichtenstein, Cowboy Ventures Partner on Raising a Seed Round3 min read

noahlichtenstein

Looking to raise a seed round?

Noah Lichtenstein (@Noah_L), partner at Cowboy Ventures, sat down with our members for an fnMentoring session on raising a seed round. Some of Cowboy’s investments include Area 1 Security, Product Hunt, and more.  During the session, Noah gave a background on Cowboy Ventures’ focus on “Life 2.0”–companies re-imagining work and personal lives, and spoke to what they are looking for in potential investments. He also led a Q&A with the founders in attendance focused on what you should ask yourself when you’re looking to raise a seed round:

Are you beyond the idea stage?
Seed investors are not usually the first round of funding–they’re not there to build the company from the ground. Be able to answer questions like: How many people want your product or service? How much would it cost to acquire customers? How much would it cost to acquire content you need? If you can show the investor that you have de-risked your idea, and tested your thesis, the more they will be able to see that you have gone past the idea stage.

Does your data show how you think?
Use your forecast to show investors how you think.  For example, if you are projecting your revenue to jump from Q1 to Q2, Noah said that the investor will want to know how you came up with that assumption.

If you’re not monetizing now, when?
You don’t necessarily need to be generating revenue to show the potential for monetization. For some, value is based on the number of users engaged with your product. If you are not monetizing at the moment, speak to how you plan to in the future.

Don’t just stay heads down building, set aside time to set some goals and look at what key metrics you should be capturing.
Know your key metrics. For example, Noah mentioned that SaaS companies should be at 100k MRR to get to a Series A, but again, these numbers depend on what your business does. Noah referenced Tom Tunguz’s blog (VC at Redpoint), as well as the Mattermark daily digest as a few good resources. He advised, Don’t just stay heads down in building, set aside time to set some goals and look at what key metrics you should be capturing.

If you can’t get a warm intro, what does that say about your hustle?
Although it can be challenging, getting a warm intro proves to the investor that you can reach out and find someone interested enough.  As Noah said, “If you can’t get a warm intro, what does that say about your hustle?” As an entrepreneur, you should be reaching out to customers you’ve never met–investors want to see that you have that drive.

 

A big thanks to Noah for his time and mentorship! If you are a member, you can listen to the full fnMentoring recording here.


To access FN’s many benefits, including an invitation to our next fnMentoring session,  learn about our approval process.

Founded in 2011, Founders Network offers lifelong peer mentorship to over 600 tech startup founders globally. Our platform, programs and high-touch service facilitate authentic experience sharing, warm introductions and long-term professional relationships. Additional benefits include over $500k in startup discounts and promotion to 2,000 newsletter readers. Members are located in San Francisco, New York City, Los Angeles, Vancouver, Toronto, London and other tech hubs. Each month our Membership Committee admits a new cohort of full-time tech founders who are nominated by an existing member.

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