Two years, our team at First Round, led by partners Bill Trenchard and Brett Berson, began to quietly build out a program to help our founders navigate the choppy waters of follow-on fundraising.
All together, we have immense knowledge in fundraising that we’ve accrued witnessing our companies raise over 1,000 rounds and $18 billion in follow-on funding. It’s possible for startup founders to know more about almost every facet of company-building, but fundraising is one area where we’ll always be able to offer more experience.
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Realizing how well positioned we were to help, we built a program called Pitch Assist — a four to six week bootcamp for our startups that are getting ready to raise follow-on capital. At the end of the program, they emerge with a well-designed deck, a strong narrative, and a clear strategy for how to approach the fundraising process.
Unlike normal fundraising advice, Pitch Assist is an immersive program where we advise, build presentations and rehearse side-by-side with First Round founders. Trenchard, in particular, has experience on both sides of the table, having started and fundraised for 5 companies before joining the firm.
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What follows is an inside look at how we run the Pitch Assist program, and what startups everywhere can apply from what we’ve learned helping create fundraising pitches and processes for over 10 years.
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FIRST, FIX YOUR TIMELINE
Given the cyclical nature of tech and venture, there are distinctly good and bad times to raise capital. “Avoid August, the second half of November and December, when many venture firms slow down.
The year-end holidays and summer dog days are dead zones for fundraising, so why set yourself for an uphill process? July can be slow, too. You can finish your fundraising process in late July — just don’t start it then,” says Trenchard.
Today’s dominant internet platforms are built on aggregating users and user data. As these platforms have grown, so has their ability to provide value — thanks to the power of network effects — which has enabled them to stay ahead.
For example, Facebook’s (now Meta’s) data on user behavior helped it fine-tune its algorithms to a point that its content feed and ad targeting were dramatically better than what competitors could offer. Amazon, meanwhile, has exploited its broad view into customer demand to both optimize delivery logistics and develop its own product lines. And YouTube has built a massive library of videos from a wide array of creators, enabling it to offer viewers content on almost any topic.
In these business models, locking in users and their data is a key source of competitive advantage. As a result, traditional internet platforms typically do not share data even in aggregate — and they make it difficult for users to export their social graphs and other content. So, even if users grow dissatisfied with a given platform, it’s often not worth it to leave.
But all of this might be changing. While it’s hard for newcomers to challenge “Web 2.0” companies like Meta on their own terms, now companies — working in what they’re calling a “Web3” model — are proposing a novel value proposition. Despite all the public conversations around the metaverse and various hyper-financialized NFT projects, Web3, more than anything, is a fundamentally different approach that some developers have agreed to. It’s based on the premise that there’s an alternative to exploiting users for data to make money — and that instead, building open platforms that share value with users directly will create more value for everyone, including the platform.
In Web3, instead of platforms having full control of the underlying data, users typically own whatever content they have created (such as posts or videos), as well as digital objects they have purchased. Moreover, these digital assets are typically created according to interoperable standards on public blockchains, instead of being privately hosted on a company’s servers. This makes the assets “portable,” in the sense that a user can, in principle, leave any given platform whenever they want by unplugging from that app and moving — along with their data — to another one.
Exploring how we can bridge the Web 2 and Web 3 ecosystems in the long run and how identity plays a big part in it.
I think Web 3 is here to stay. By Web 3 I mean the philosophy, concepts and technologies that prioritize user choice and ownership, and can be used to build decentralized services. Blockchains (e.g. Ethereum, Solana), tokens, protocols (e.g. IPFS, TheGraph, Lit), services (e.g. ENS, Filecoin), dApps and users’ keys make up Web 3 (not meant as an exhaustive list).
Covering the fundamentals of web3 development: from writing Solidity, to minting NFTs, to building full-stack dApps. Bringing you resources from the best in blockchain.
