In Order To Raise From a VC, You Need To Think Like a VC
1. Key Themes
Theme 1: Reframe fundraising as selling an opportunity, not asking for a favor
Investors are paid to deploy capital and fear missing winners
The article's core argument is that the founder-investor dynamic is mis-framed. Funds exist to invest, and their economics are driven by a handful of outsized winners.
"A VC gets paid to invest. The partners raise a fund from their own investors, and their whole job is to put that money into companies like yours."
"For funds that ARE deploying capital, it means they want it just as much as you do to write the cheque."
The Power Law shapes investor psychology
Because returns concentrate in a few big winners, investors weigh upside far more than the frequency of misses, which should shape how you pitch.
"Ilya... describes an industry trained to care far more about the size of a possible success than about how often the bets fail. This is the exact logic a founder has to adopt."
"You shouldn't pitch as if you are begging for cash, but as if you are presenting an opportunity the investor would regret passing on."
Confidence must be paired with coachability
"Do not sound arrogant or stubborn, founders tend to fall in love with their idea... VCs want a confident founder, who's presenting them with an opportunity of a lifetime, but they are also receptive to feedback and coachable."
Theme 2: At pre-seed/seed, investors are underwriting the team, not the product
Team ranks above product and market
Evidence comes from a large survey of VCs.
"In the survey Strebulaev ran with Paul Gompers, Will Gornall and Steven Kaplan, covering 885 venture capitalists at 681 firms, the founding team came out as the factor investors rated most important, ahead of the product and the market."
Why the team dominates early decisions
"At the earliest stage, the team is the only part of the company with a past that can be examined. They are also the only part of the company that will be able to fix whatever ends up breaking."
Investors rely on proxies to judge people quickly
Conviction has to be built fast on thin evidence, so signals that shorten the distance between a stranger and a judgment matter.
"Investors therefore rely on whatever shortens the distance between a stranger and a judgement, such as an accelerator that has already selected the founder, a stint at a company known for a hard interview process, a referral from someone they trust, or a public record of shipping work."
"At the pre-seed and seed stages, investors will end up building conviction in companies that may have little more than a minimum viable product (MVP) and a handful of users at best."
Theme 3: Fundraising is a pre-built relationship game, not a cold-outreach funnel
Most deals don't come from inbound
"Ilya's survey referenced above found that only about 10% of the deals investors closed came as inbound from founders, with most of the rest arriving through professional networks and/or referrals from other investors."
Build visibility 6-12 months ahead
"Before you reach out, make sure you build a steady record of progress updates and customer stories that will get passed along and eventually reach the right ears."
"Investors are more likely to invest in a founder that they have watched improve over a period of 6-12 months."
Consistency is itself a signal
"Consistency is rewarded by investors because consistency and longevity is evidence that the founder is still building and shipping."
Theme 4: Time and competition are the founder's leverage
Time asymmetry favors the investor, so engage early
"When a VC is interested, they don't mind waiting. A GP loses nothing by waiting, but the founder will keep burning. So an early conversation is valuable for both."
The first offer is the hardest; compress the process
Citing Sam Altman's essay, the article argues for running parallel meetings.
"He also says that the first offer is by far the hardest to obtain, and then the others arrive at a surprising speed."
"Set up meetings in parallel within 1 or 2 weeks, so that each investor knows others are looking at the same time, and to reward whoever moves first."
Urgency must be real
"Urgency has to be genuine, since investors talk constantly and a founder who claims a round is closing when no offer exists will definitely be caught out."
2. Contrarian Perspectives
"Fundraising is a myth" - investors back founders they already know, not the ones who pitch them This challenges the common founder playbook of mass-emailing decks. The evidence is the low inbound close rate and the volume of decks funds ignore.
"Most VC funds will receive thousands of decks throughout the year, will meet an equal amount of founders, and they will only end up investing in the ones they found themselves."
"Only about 10% of the deals investors closed came as inbound from founders."
The implication is that the work of fundraising happens before the ask: personal brand, PR, events, and a "distribution machine."
Thinking like an investor may tell you not to raise VC at all Rather than treating a raise as the goal, the article suggests that honest investor logic can lead founders away from venture funding, and that this willingness is itself attractive to investors.
"Followed honestly, an investor's logic will sometimes lead a founder to conclude that the company would be better served by customers' money than by a fund's, and the founders willing to reach that conclusion are, by the same reasoning, the ones investors most want to back."
"Startups have always existed, even before VCs, so keep this in mind before you choose to fundraise."
A great product can still be passed on if the team is a black box Against the "build it and they will come" instinct, the article argues a technology-only pitch loses deals.
"A founder whose pitch is entirely about the technology leaves those questions unanswered. An investor with no way to answer them will usually pass, even on a good product, because the risk of being wrong about the people is too hard to price."
3. Companies Identified
HubSpot for Startups
- Description: HubSpot's startup program, sponsor of this issue, offering a free go-to-market diagnostic.
- Why mentioned: Sponsored tool for founders to self-assess go-to-market readiness before investor meetings.
- Quotes: "HubSpot for Startups packed everything it learned helping 35,000+ startups grow into one free GTM Diagnostic." / "I'd run it the week before any investor meeting."
Stanford Graduate School of Business
- Description: Business school where Ilya Strebulaev is a professor.
- Why mentioned: Institutional home of the research on VC decision-making cited throughout.
- Quotes: "Ilya Strebulaev is an economist and professor at the Stanford Graduate School of Business."
- Description: National Bureau of Economic Research.
- Why mentioned: Source credited for the survey chart on factors VCs rate most important.
- Quotes: "Image source: NBER"
BIP Ventures
- Description: Venture investor.
- Why mentioned: Credited as the image source for a graphic accompanying the discussion of investor/founder dynamics.
- Quotes: "Image source: BIP Ventures"
4. People Identified
Ilya Strebulaev
- Description: Economist, Stanford GSB professor, co-author of The Venture Mindset.
- Why mentioned: His research underpins the article's key claims: the power-law mindset, team as top factor, and only ~10% inbound deals.
- Quotes: "He's also the co-author of The Venture Mindset, where he describes an industry trained to care far more about the size of a possible success than about how often the bets fail."
Paul Gompers, Will Gornall, Steven Kaplan
- Description: Co-researchers on the VC survey with Strebulaev.
- Why mentioned: Co-authored the survey of 885 VCs at 681 firms.
- Quotes: "In the survey Strebulaev ran with Paul Gompers, Will Gornall and Steven Kaplan, covering 885 venture capitalists at 681 firms..."
Sam Altman
- Description: Tech executive and former Y Combinator president (identified in the article as author of the essay).
- Why mentioned: His essay "Fundraising Mistakes Founders Make" provides the guidance on competition, parallel meetings, and genuine urgency.
- Quotes: "Sam Altman wrote a seminal essay 13 years ago titled 'Fundraising Mistakes Founders Make', where he describes competition as the one part of the process that you should pay attention it."
- Description: Author of The VC Corner.
- Why mentioned: Writer of the piece; also promotes his related tools and databases.
- Quotes: "The VC Database Most Founders Spend Weeks Building" / "We Built a Free Tool That Reads Your Deck the Way an Investor's Triage Does"
5. Operating Insights
Run a compressed, parallel process, but only with real urgency Schedule investor meetings within a one-to-two week window so competition forms naturally, and never fabricate a deadline.
"Setting up meetings in parallel within 1 or 2 weeks, so that each investor knows others are looking at the same time, and to reward whoever moves first."
"A good founder building a solid product has no need to invent anything beyond a theoretical deadline."
Seed the relationship 6-12 months before you ask Send regular progress updates and customer stories, show up at events, and build a personal brand so investors have watched you improve before the pitch.
"Build a steady record of progress updates and customer stories that will get passed along and eventually reach the right ears."
"Go to the events and do PR for yourself, build a personal brand and a distribution machine."
Pitch the team's proof points, not just the product Make the team's credibility legible with the proxies investors trust.
"An accelerator that has already selected the founder, a stint at a company known for a hard interview process, a referral from someone they trust, or a public record of shipping work."
6. Overlooked Insights
Investor-style thinking pays off after the round closes The article notes in passing that understanding why a fund said yes helps you plan for the next raise.
"The larger benefit of thinking like an investor appears after the money arrives, when the founder who understood why a fund said yes also understands what it will need to see before writing the next check."
Early conversations carry an option value for investors, which is a negotiating asset Early, no-pressure meetings give investors free information and a chance to get ahead of the market.
"The founder earns early feedback, the investor learns about a company for free, and gives them a potential chance to buy into it before anyone else."