10/10 VC Series — Part 10: Preparing for Future Fundraises
BIOS: Nucleus of Life Science Innovation 🚀
JOBS
- BIOS Talent: Find Jobs @ Breakout TechBio Startups — Search Jobs 🚀
- Post Jobs: Add Your Startup to BIOS Talent — Post Now 🎉
- Students: Join Alix Ventures Fellowship — Join Now 🧬
- BIOS Contributor: Share Your Thought Leadership — Join Now🔬
CONTENT & COMMUNITY
- BIOS Daily: Join 25K+ Subscribers Following TechBio — Sign Up 🔥
- BIOS Insider: Premium TechBio Thought Leadership — Sign Up ✨
- BIOS Commons: World’s Largest #TechBio Community — Join Now 🎉
INVEST
- BIOS Angels: 1st TechBio Angel Investing Syndicate — Join Now 🌟
- Alix Limited: Invest in Breakout TechBio Startups — Learn More 🧠
By:
Alix Ventures: Supporting Early Stage Life Science Startups Engineering Biology to Drive Radical Advances in Human Health
Calling All Innovators — Click to Reach Out 🚀
We are honored to feature investors at:
Prefix Capital, KdT Ventures, Civilization Ventures, Arkitekt Ventures, Lux Capital, 8VC, SV Angel, Artis Ventures, Inovia Capital, & Alix Ventures
We asked our guests:
“How do you advise founders in your portfolio to prepare ahead of time for future fundraises?”
“Generally, there are two trains of thought on a follow-on fundraise: 1) run a hypercompetitive bidding process under a tight deadline, trying to give as much term leverage as possible to the founders or 2) run a courting process so founders can get to know prospective follow-on investors and vice-versa, well in advance of a formal fundraise. Strategy #1 tends to be valuation/term optimal and can reduce the risk of founders spending time training a VC to train a future competitor. Strategy #2 tends to be a more organic process that can help ensure there is a fit between the founders and their next board member and can provide adequate enough time for a nontraditional startup to educate the capital market and successfully complete the raise. We often advise strategy #2, but sometimes strategy #1 is a better fit.”
Byron Alsberg — Co-Founder & Partner @ Prefix Capital
“Run a process. If you’ve met your KPIs and you’ve warmed conversations throughout the year, you’re in a position to reach out to all your leads and let them know your round is coming. Set a start and end date with those leads in mind and stick to it.”
Phil Grayeski — Principal @ KdT Ventures
“Choose your investors wisely. Early investors are more than capital — they are your partners for engineering the next raise. Choose someone with credibility.”
Shahram Seyedin-Noor — Founder & General Partner @ Civilization Ventures
“The time to start planning for your next round is the day after you close your last round — and I cannot stress that enough. At every BOD there should be at least a 15min check-in/strategy/positioning re next fundraise. Keep current investors engaged by regular updates, and always be open to taking intros to select value-add potential new investors.”
Enke Bashllari — Managing Director @ Arkitekt Ventures
“Educate the market of future investors well in advance. Educate yourself of future investors’ wonts and wants well in advance.”
Zavain Dar — Partner @ Lux Capital
“When we are first looking at a company, I always ask “what story do you want to tell at your next fundraise?” and work backwards from that to a plan. When we are a quarter away from fundraise, we do heavy iterations on deck and plan to make their narrative crystal clear. Usually takes 5–6 pitch rehearsals until the story feels right.”
Francisco Gimenez — Partner @ 8VC
“It depends on the company and fundraise, but relationship building is key early on as you’re entering into a long term partnership. Good founders have a strong planning process with different funding scenarios that they update as they progress.”
Beth Turner — General Partner @ SV Angel
“My biggest piece of advice to founders prior to starting a fundraise is to be organized. It’s key for founders to do their research on which firms and partners are best suited to help build their vision, who are the right people in their networks to reach them, and what aspects of their process they can use to push investors to the next step of due diligence. Once founders formally kick off a raise, it’s a sprint to close while momentum is high, so the more prepared they are ahead of it, the smoother and quicker it will go for them.”
Ameena El-Bibany — Principal @ Artis Ventures
“Be fully ready from pitch to supporting materials and data room before you take your first VC meeting. Draw from other founders’ advice to perfect your story and raise only when you don’t need to.”
Antoine Nivard — Principal @ Inovia Capital
“One of the best pieces of advice I’ve ever been given is, “know people before you need to know them”. My personal belief is that 90% of fundraising can be done between rounds & then it comes down to logistics / dealmaking.
Tactical Strategy:
We advise Founders to immediately after closing their prior round put together a list of top milestones for their next fundraise, identify the 10–15 high priority VCs they should get to know, & then ask these VCs to validate their milestones. When you can fix a target & know what you are supposed to do, it does a great deal in eliminating guesswork, & puts the focus where it should be — on execution. From here we often recommend Founders schedule routine touch points (3–6 months) with these high priority VCs where you share progress (but on your terms, this is not a formal pitch), ask for help (particularly intros), & continue most of all the relationship building process (leds often take Board seats & as a founder you should feel comfortable with this person well before a decision is made. As the saying goes, “a lot of great companies have been ruined by bad boards”). In parallel we recommend, Founders create a “Friends of Your Company” newsletter that you distribute routinely (so folks remember who you are, hear good news, & see your logo). With these tactics in mind then it becomes sounding the horn that you have hit your consensus milestones. At this point VCs should already feel comfortable in knowing you, your company, objectives, and then it comes down to can we make a partnership happen.
The sad eternal truth is “a startup is as good as the next round it can raise”. We believe trying to mitigate capital risk to be highly prudent.”
Chas Pulido — General Partner @ Alix Ventures
Insights
We spoke to a multitude of healthcare/life sciences investors, asking them how they think about advising startups for future fundraising rounds. The main takeaway is to start early. Early stage investors are more than just capital — they’re your partners for future fundraising rounds, so choose wisely. Keep introductions warm (several investors touch upon the importance of exploring connections, relationships, mentorships with potential investors well in advance of your next fundraising round) so that when it comes time to raise, you’re prepared and have a good idea of who you’d like to work with (and which investors are good partners to work with) in a more formal capacity. Aside from building relationships, other helpful tips include: be organized about your strategy, aim to educate, and rehearse your narrative with your existing investors.
📣 If you enjoyed this post please clap 👏 & comment 💬 to let us know
Alix Ventures, by way of BIOS Community, is providing this content for general information purposes only. Reference to any specific product or entity does not constitute an endorsement or recommendation by Alix Ventures, BIOS Community, or its affiliates. The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by Alix Ventures employees are those of the employees and do not necessarily reflect the view of Alix Ventures, BIOS Community, affiliates, and content sponsors.
Join BIOS Community 🎉
Become a member, continue the conversation, connect with like-minded Life Science innovators, access exclusive resources, & invite-only events…
Apply to Join — Membership Application
For More Interesting Content 💭
🧬 Podcast — Stream Full Episodes
🧪 YouTube — Watch Videos
🩺 Twitter — Explore Feed
🦠 LinkedIn — Read Posts
