\n<\/p>\n
\n\t\t\t\t\t\t\tWalter Thompson<\/span> Previously, he worked at a number of startups in various roles and as City Editor of Hoodline. He is the host of The Golden City<\/a>, a podcast about San Francisco.\t<\/div>\n It\u2019s too early<\/span> to determine whether SVB\u2019s downfall<\/a> heralds a new era for venture capital, but based on anecdotal evidence, off-the-record discussions and chats with co-workers, it seems like we\u2019re back to business as usual where pre-revenue startup fundraising is concerned.<\/p>\n Not a scientific sampling, but several investors signaled this week on Twitter that they remain interested in talking to founders who are still at the idea stage. My hot take: With contagion contained, the VC community feels good about writing smallish checks for pre-revenue startups, but Series A and up? M\u00e1s o menos<\/em>.<\/p>\n As long as this downturn persists, this investor Q&A will be a monthly TC+ column. If you\u2019re a recently laid-off worker considering striking out on your own<\/a>, an H-1B employee who\u2019s had it up to here<\/a>\u00a0or just looking for tips and advice that can help you connect with early-stage investors, please read and share.<\/p>\n Thanks very much to all of the investors who took the time to answer these questions in such detail! If you\u2019re an early-stage investor who wants to be included in future columns, email guestcolumns@techcrunch.com<\/a> with \u201cHow to pitch me\u201d in the subject line.<\/p>\n Here\u2019s who participated:<\/p>\n What kind of investment opportunities are you looking for in March 2023?<\/strong><\/p>\n Like many investors, we are bullish on AI. We made two AI-related investments in April and continue to look for opportunities in that space.<\/p>\n How do you prefer to be approached by a founder with their initial pitch: a cold email, a warm intro or another method?<\/strong><\/p>\n We have an online portal at lightship.capital<\/a> that founders can use to apply for investment. We do that to prevent an issue with VC investors called \u201cnetwork bias.\u201d Founders should apply on our portal and follow on Twitter<\/a>.<\/p>\n What\u2019s one traditional fundraising tactic that founders should remove from their toolkit \u2014 something that no longer works but is still a common practice?<\/strong><\/p>\n Asking for warm intros and trying to \u201cbuild a relationship\u201d with investors. Spend your time building a great business and you will gain investment. I don\u2019t need new friends.<\/p>\n Tell us about the best pitch you\u2019ve received recently. When during their presentation did you realize you were going to invest?<\/strong><\/p>\n I was pitched by a firm called MuseTax recently. Excellent founders, subject matter experts, the real deal. They made me want to invest in the first 10 minutes. They are in diligence now.<\/p>\n Can you share one piece of advice that can help a first-time founder stand out?<\/strong><\/p>\n Don\u2019t focus on investment; focus on design. Don\u2019t let your engineers build you an ugly product with a great password reset function but limited user value.<\/p>\n Don\u2019t let the engineers tell you it\u2019s not ready; it is. Push it out and learn.<\/p>\n Design it well and users or investors will follow. Engineer the first version well and you will end up with lots of engineering bills and no progress.<\/p>\n What are you reading\/watching\/listening to right now?<\/strong><\/p>\n I keep rewatching season 1 of \u201cBillions.\u201d You know, before it got weird \ud83d\ude42. Great show.<\/p>\n What kind of investment opportunities are you looking for in March 2023?<\/strong><\/p>\n During a healthy fundraising environment, the founders that do the best often lean into their storytelling prowess and can convince investors with their charisma. They\u2019re the ones who are naturally good speakers and are articulate with their vision.<\/p>\n There\u2019s a second type of founder with a different background. They\u2019re often heads-down, scrappy and resource-oriented. I call them \u201csurvivors.\u201d Survivors are often immigrant founders, people of color, women or others from underrepresented backgrounds.<\/p>\n I believe the survivors are the types of founders to back during a downturn. They\u2019ve been pushed to be scrappy and survive their whole lives; they\u2019re especially equipped to handle what the current times demand of them. They\u2019re good at making something out of nothing and are extremely cost-efficient.<\/p>\n I\u2019m looking for paths to monetization, business models and avenues to profitability. Investors are paying much more attention to numbers, business models and how well founders manage finances. Expect many more questions challenging the business model.<\/p>\n I\u2019m looking at how much revenue comes from product quality versus marketing. Founders who generate virality based on the product\u2019s quality show they can make money with little marketing spend.<\/p>\n We love companies with high EBITDA. We love companies like Quinn, which grew to millions in revenue in just a year from launch with viral, zero-cost marketing on TikTok.<\/p>\n How do you prefer to be approached by a founder with their initial pitch: a cold email, a warm intro or another method? <\/strong><\/p>\n Cold email works great, but it\u2019s surprising how few people can do it right. In a cold email, every single sentence should be convincing me to take a meeting. With every word and every sentence, you need to create the desire for an investor to meet you in person. You have to show a clear reason why they need to meet you now, not next month.<\/p>\n<\/p><\/div>\n
\n\t\t\t\t\t\tContributor<\/span>\n\t\t<\/p>\n<\/p><\/div>\n\n
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Brian Backeen, general partner, Lightship Capital<\/h2>\n
Masha Bucher, founder and general partner, Day One Ventures<\/h2>\n