Understanding that successful pre-seed & seed fundraising is efficiency game: when ‘spray and pray’ is not an option

Olga Maslikhova
7 min readApr 8, 2021


Designing a sophisticated, focused fundraising strategy is a stepping stone towards a startup’s success

Source: Google Search

One of the luxuries I have as a cross-border generalist VC and angel investor is the ability to see what works — and doesn’t work — for startups across a very broad range of industries, from wine (Vinebox and USUAL Wines) and wellness (ClassPass) to cybersecurity (Tortuga Logic), future-of-work (Gable), and healthcare (Nyquist Data).

Most great entrepreneurs I see are singularly focused on addressing customer pain points through delivering a new product or service to the market that is 10x superior to whatever competitors have to offer. Thanks to COVID-19, they are also becoming more serious about the sustainability of their business model, monetization plan, and efficiency of growth. Top entrepreneurs are also devoting substantial (an important) attention to building a well-functioning, highly-motivated team whose visions of the company’s mission, values, and goals are closely aligned. Resource-constrained prioritization and time-management are the cherry on top.

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When it comes to fundraising, though, many founders’ attention and enthusiasm drops off sharply — to their distinct detriment long-term. Many founders deprioritize fundraising as an ongoing sector of their venture’s operations, approaching it with the common attitude of “I just want to be done with it and get back to running my business.” While a dominant viewpoint in the startup community, this approach is fairly shocking considering the reality of the tech business development trajectory: for the majority of ventures, overcoming their initial fundraising hurdle is critical to their ultimate success (or failure). I would argue that for companies with high growth potential, the ability to raise capital consistently is vital for success.

So what goes into a successful pre-seed raise, on top of designing an appealing deck and a clear, compelling narrative (which I wrote on here and here)?

Finding a complementary founder/investor fit. In venture capital investing, it’s already obvious that the ’spray and pray’ model doesn’t work (unless you are 500 Startups, of course). Successful VCs invest based on their conviction, funding theme, and investing thesis, and I don’t see why the process should be different for tech entrepreneurs.

VCs bet on entrepreneurs as much as entrepreneurs bet on VCs, and strong, sustained relationships pay dividends in the long run: access to capital is a floor, not a ceiling, for daring founders. The VC-founder relationship is a strategic partnership longer and stronger than two-thirds of marriages in the United States, with similarly long-lasting consequences for both parties. A happy marriage in which funders and founders take the time to build a deep relationship yields long-term benefits on both sides of the table; conversely, a strained relationship with one’s investors can be life threatening for newly established tech business. The lesson here? Choose wisely and be intentional about who you are contacting for funding. As in any kind of relationship, you want to find a person you can trust and rely upon, someone who will take you seriously and be inclined to support your growth and stay loyal to you through the lowest of the lows. You want a partner guided by the same set of principles and values.

Quality over quantity. Pareto rules. Super-early stage VCs are a very special breed. While we are under constant pressure to deliver a venture rate of return, most of us are genuinely passionate about helping certain types of founders build category leaders in our industries of focus. We invest our money, time, and reputation in the hopes of amplifying synergies and building something truly disruptive. And nothing matters more than people at this stage.

Thus, your goal as a founder is to focus your approach at an individual level: to find that particular partner in a VC firm to whom you can relate, and with whom you could envision co-building the future. Funders can tell when you’ve put in the time and energy to understand their background and tailored your pitch to their specific interests and priorities — and on the flipside, when they’re receiving an undifferentiated form pitch that’s been sent to a hundred other potential investors. A distinct and compelling narrative delivered to a relevant investor can substantially decrease your fundraising timeframe and save your scarce early-stage human resources. But how do you know who is the right investor for you?

My best answer: do your research! The democratization of venture capital, the rise of podcasts, and the evolution of blogging give founders unparalleled access to the insights of some of the best VCs in the world. Most of them are very explicit about what traits they are looking for in founding teams and what markets they are bullish about.

Just a few examples: Mike Maples is betting on Prime Movers , Alfred Lin is looking for disruptive business models and operational excellence, the founders of 8VC are looking for founders addressing major challenges in the hardest industries like government and healthcare, David Sacks emphasizes ‘bottom up SaaS’ and ‘product led growth’, and Fred Wilson shares tons of insights into VC& tech in his blog. You don’t need to pay tens of thousands of dollars for Pitchbook Data access to glean this information; all you need is dedication to allocate around 30 hours of your time to generating a list of 5–10 of the most relevant investors and start reaching out. If none of them converts, reflect on prior interactions, make changes to your deck and narrative, and expand your funnel to around 20 leads. Unless you are building your company in a super-crowded space that went out of VC grace, you don’t need the list of 100 VCs.

Moral of the story: “Spray and pray” is not an optimal approach (and not just in VC investing), and the law of diminishing returns is real; a targeted, focused fundraising approach will get you farther faster and more reliably. Here’s an interesting infographic on this from the latest DocSend Startup Index:

Source: DocSend Startup Index

Runway is key. The shorter the runway, the harder to raise, and the more tailored one’s fundraising strategy should be. Start early, ideally when you still have 10+ months of cash. Getting great institutional investors on board is a relationship-building business, even more so at the pre-seed/seed stage. Before embarking on a potentially decade+-long journey, a good VC will take time to get to know you, and the last thing you want is to start freaking out as you are running out of cash and be perceived as too transactional. The opposite is also true: cash on your account gives you peace of mind and freedom to learn if the relationship you are getting yourself into is right for you.

A common counter-argument I hear is that many pre-seed startups don’t have runway. The reality is that as the pre-seed round of funding becomes institutionalized, having a ready product MVP and initial market response paired with opportunistic revenue at this stage is becoming crucial. Successful founders I see are doubling down on generating revenue and keeping costs in check to self-sustain. To VCs, seeing a pull from the market and founders’ demonstrated ability to generate cash is a very good sign.

Source: DocSend Stratup Index

Final Thoughts:

Successful fundraising is not getting a fundraising pitch together and contacting 100+ VCs. It’s a function of presenting the signs of a healthy business to the right investor identified through thorough research, and tailoring your approach to respond to their particular areas of focus and experience. Some important questions to ask yourself as you build your list of prospective VCs:

  1. Does this person have a genuine interest in my sector? Did she invest in complementary startups that ended up being crazy successful?
  2. What is her background?
  3. Do they invest at my stage? What percentage of their portfolio is comprised of companies at this stage?
  4. What are the most important factors they consider as they make investment decisions? Any specific metrics? Interpersonal traits?
  5. How do they behave when sh*t hits the fan? The best way to source this data is to talk to their portfolio companies that went bankrupt. How do they respond to challenges and failure, and do they show a capacity to form long-term relationships with founders through thick and thin?

Lastly, manage your expectations accurately. If you are building something truly disruptive in a massively inefficient but mission-critical market with a team of uniquely qualified individuals, hustle your way to first revenue and build up an excited customer base. The chances of a venture like this getting funded are much higher than if you create yet another app with weak differentiation. Narrow or expand your VC funnel accordingly.

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Olga Maslikhova

Stanford GSB alum, early stage VC in consumer and SaaS, angel investor in ClassPass and Vinebox