VC Minute
VC Minute
255. Raising Seed and Reaching Investors, feat. Sunny Han, Founder & CEO of Fulcrum
Text your thoughts directly to Rich.
Running a targeted fundraising process—knowing who he want to reach and who can introduce him—got the fundraise moving quickly.
About Fulcrum
Fulcrum applies modern technology to manufacturing processes, helping makers focus on their craft and grow their businesses. The innovation of American manufacturers is critical to a better world, and Fulcrum aims to revitalize the industry with automation software.
About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast - get to know AVL Growth Partners at avlgrowth.com. (Sponsored)
About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.
Matt, your partner, actually, I, pitched him and he said, there's no way we can lead this round, but he introduced me to basically everybody that ended up putting in a term sheet. one piece of advice is that even if there are people out there that can't lead the round, If they really believe in you, an endorsement from them really massively increases the likelihood that someone's going to take you seriously, especially at the seed stage. didn't know where I was in that fundraise, but I did it very differently than before. Before it was like, alright, we have this parallel path of bootstrapping, and we also need fundraising, and I took a meeting here, and a meeting there, and a meeting there. The second time, in 2020, we are running out of money, we will die as a business, I haven't paid myself in a year, I'm in massive debt, I told everybody we're doing this, I owe my parents money, I owe my in laws money, I have no savings left, and we have less than two months of runway before everybody's just gone, we have no lifeline left, so I just met with about 35 VCs in the span of two weeks. And the process was, I went online and looked at anybody who had invested in vertical SaaS, in manufacturing, in industrials, anybody who had worked at a VC that had invested later stage in those types of companies and that had either formed their own fund or moved somewhere else. Anybody who was connected to people that I thought had companies that were similar, and then I whittled that list down from like 300 firms down to the top 50 that I would want to take money from, and I just reached out. To everyone in my network that said, hey, I need an intro. This is what I At first, I felt really, guilty about it, I felt like I was bothering people. But every single person that either started a company or worked at a startup, I said, can you introduce me to your investor or to this person? They either said no, but here's somebody who can, or they just made the intro. it was so much more support and help in making introductions than I expected. I expected it to be really, really difficult. I don't have that many connections to like other startup founders. I don't have that many connections to VCs, but I found so many people in my network that I had warm connections with that were one or two degrees removed. It was a little bit of a pain to crawl through there, but yeah, I think over the course of one month I pitched 35 people, which is not a lot. I know people that have pitched far more firms in far less time. But I remember distinctly in July, thinking, okay, this isn't gonna work out, we're gonna have to do consulting again, and we got one term sheet, and that one term sheet, when I pulled that, I just sent an email blast out, hey, we have a term sheet, it's not at the valuation that we want, or at the size that we want, but we got seven other term sheets within 24 hours. The perception that I had within 24 hours of this fundraise is gonna fail, to we now have eight competing term sheets that we have to select from was just a wild reminder of how poor our perceptions of reality can really be at times.
