Fundraising is a ‘game’ these are the rules

Published On: September 21, 2022Categories: Founder 2 Founder, Investors, Uncategorized

Founder: Sergio Rodriguez-Valenzuela
Company: ToDooly
Stage: Seed
Date Founded: 2019
Industry: Marketplace

I didn’t have a safety cushion or the ability to do a family and friends round, so a meaningful capital injection into the company was necessary in order to go full-time. I went full-time on ToDooly, a marketplace for manual labor, in February 2019 thanks to a $75k check from my alma mater. Fast forward to today, I have raised $2.7M through three different financing rounds, so I have seen everything from SAFEs to equity rounds (and some of the funky stuff in between). There is plenty of content online around the legal and technical stuff; however, the “game” itself seems to be discussed mostly behind closed doors. The truth is, whether we like it or not fundraising is not an equitable process, so sharing what I’ve learned will hopefully put this information in the hands of more people who need to know it before they go out to raise their first (or next) round of financing.

1) Fundraising is a narrative game

The same information can be presented in different ways. The metaphor I will use is pasta: it is incredible how Italians can make different kinds of pasta using the same ingredients in different concentrations, shapes, and volumes. There are over 350 types of pasta around the world. Just like people have strong preferences for one type over another, investors have preferences for what they like to invest in. This is known as pattern matching. The same business model can be served to investors in 350 different ways. The company, vision, and values haven’t changed, but the narrative had to in order to appeal to what VCs want to hear. You’ll get advice from mentors and investors that say “never change your business to appeal to what an investor wants, focus on what the customer wants”, and I would agree with this advice; however, when you are fundraising you should finetune your narrative for your target audience in the same way you tweak your ads to acquire customers.

2) Fundraising is a relationship game

It’s not just what you know, but also who you know. This is why the double opt-in warm intro game is still the number one way to run a tight fundraising process. It is definitely trendy in the VC Twittersphere to say things like “we look at every application we receive”, or “I read and respond to every cold email I get”; however, even though I respect the heck out of these VCs, they make up less than 1% of VCs writing checks. Knowing this will save you time and heartbreak, plus it’ll help you develop a skill that every founder and CEO should have: Networking finesse. You may hate this, you may tweet about it, or you may decide you want to do things differently when you start your own fund. But this is the truth that we all know and no one wants to admit: Fundraising is NOT a meritocracy, it is a relationship game.

3) Fundraising is a numbers game

The number of meetings it takes to raise a round will vary based on narrative, relationships, and momentum. Although, most founders will likely agree the number of 1st meetings is somewhere between 40–50 (you’ll need even more warm intros). You WILL hear more nos than yeses, so get comfortable with rejection and focus on the numbers. You’ll likely have to prospect 300 investors, to get 150 warm intros, 50 of which might turn into meetings, most of which will stop there. In order to increase your fundraising odds, I recommend you get 40–60 meetings within the first two weeks of your fundraising process, or 20–30 meetings per week. Having a lot of meetings in a short timeframe allows you to build momentum and create investor FOMO. This is why relationships are important, and why founders who get strong intros will have more success (on average) in raising money.

Bonus: Fundraising is a full-time job

My first financing round was $325k and it took me over a year to raise. My last financing round of $1.5M took three months: one month to get term sheets, one month to fill the round, and a month of legal stuff to get the money wired. The key differences between these fundraising experiences were my understanding of the game and how much time I dedicated to the process. When you are ready to raise, plan to run a tight fundraising process. DO NOT try to “passively” raise while operating your business full time. Yes, it is possible, but you will do both poorly and will likely end up closing SAFEs to buy runway rather than actually raising a meaningful round of capital.

Hope this helps!

A written smile,


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