This is the first post in our “fundraising out loud” series. Catch up on the rest of the series:
For the past few months, we've been preparing our second fund, and we're ready to hit go. As all founders know, fundraising is hard and there is something new to learn every day. Our conviction for Fund II comes from being proud of what we have done so far, and so we are doubling-down on what we’ve built and learned.
The more we did in preparing to kick off fundraising, the more we realized that this is exactly the sort of work that we should be doing in the open. Much of our most rewarding learning, like the enteric emissions deep dive and our recent ag insurance series, has been done in the open. So, we’re going to do the same with Fund II: sharing our fundraising thoughts, hopes, fears, failures and successes as they happen.
As excited as I am to tell the world about our vision, publicly talking about fundraising is scary.
What if people laugh at our $70M target? And what if we ultimately don’t hit the target? Everyone will know we couldn’t do it.
While facing those outcomes would be hard, especially for my ego, there are three reasons that I find compelling for sharing the journey.
We ask founders all the time to be vulnerable. To learn out loud when they fail. To open up so that others can help them. To share their struggles so others can benefit from their scar tissue and praise their candor.
But if we believe there are lessons to be shared, trust to be built, and credibility to be earned, why would it be any different for investors?
There are already too many frustrating and unquestioned power dynamics in venture. I hope that sharing my lessons from navigating the nuances of family offices, wealth managers, and asset allocators can be useful to founders, providing insights into where and why VCs get their capital.
Venture is also plagued with barriers to entry, from the jargon to the dependence on warm intros. The fundraising world for investors, I’m learning, has a very similar “it’s all about who you know and where you come from” vibe. I hope that fundraising out loud can move the needle on transparency and candor, and maybe even help to increase access and attract MUCH NEEDED different perspectives to the industry.
Only by doing things differently than we have in the past will we be able to solve the challenges and capitalize on the opportunities of the future.
Fundraising is like customer discovery on steroids. When I talk to a dozen potential investors per week (my target during an active raise), I’m drinking from a firehose of feedback that helps us rapidly iterate on our positioning, refine answers to objections, and hone in on our ideal investor profile.
This feedback also helps us be better investors and better able to support our founders, as our processes and systems are tested, theses about the future of the food system are evaluated, and sales skills are put to the test.
But the weeks go fast and there are notes to write and follow up emails to send, so making a commitment to ‘raise out loud’ provides a forcing function to take time to reflect and internalize my learnings. By sharing them at least weekly, I hope I can not only become a better investor but also help other emerging managers and founders who are raising money to change the world. And when I get stuck or waver in my confidence, I hope some of you can help me, too.
Finally, sharing my journey out loud hopefully demonstrates the depth of my empathy for the slog that is fundraising. When I sit across from a founder raising money for something they believe in, I think it matters that I’ve been in the exact same chair at another table.
I’ve had to advocate for a version of the future that’s not always obvious. I’ve had to build different scenarios and the impact on cash flow. I’ve felt the tension of having to keep the internal gears turning and the team’s confidence high while I stave off self-doubt.
I know how hard it is.
Raising Fund I was one of the toughest things I’ve ever done. Armed with only a powerpoint deck and our reputations as operators, ecosystem builders, and industry experts, Matthew and I raised $20M. Not only did we lack warehoused deals, we’d only ever been founders, not investors. And even after our first close, for months my life was unreturned emails and nearly-always-ignored voicemails. We even heard of a group that had actively bet we wouldn’t be able to close the fund.
So it was not always a foregone conclusion that we’d end up oversubscribed, even after increasing the fund size to $35M.
I learned some important sales lessons: psychology matters, scarcity is a thing, and investors are human. I also learned that people cannot invest if they don’t know you’re raising. So by raising out loud for Fund II, in addition to the three reasons above, I also hope to attract and connect with True Believers.
True Believers, like us, believe…
Tenacious Ventures Fund II is happening and I’m going to share the journey, including the good, bad, and (hopefully not too) ugly. Wish me luck!
To learn more about investing in Fund II and our vision for a digitally-native and climate resilient food system, get in touch here. Early-stage agri-food tech startups looking for funding, reach out here.
Disclaimer: The information in this post is not investment advice or a recommendation to invest. It is general information only and does not take into account your investment objectives, financial situation or needs. Before making an investment decision you should read the information memorandum and seek financial advice from a professional financial adviser. Whilst we believe Information is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statue which cannot be excluded.