TBC: When VCs Start Dreaming With You

**Jason Yeh:** Hey there. Welcome to another episode of the Back Channel. In today's episode, I want to talk about the fundraising pitch version of product Market Fit. You know how some people say that product market fit is this feeling that it's so hard to describe, but once you experience it, once you'll understand it and you'll know what to look for in the future

and people try to describe it, but it's so hard that they talk about this pull from the market. Not a push, but a pull. There is an equivalent of that for fundraising. That's getting a VC to dream. So here's the experience that I'd like to describe for you and the thing that you're going for. I also talk a little bit about how you can set it up and the things that are important to understand about getting VC dreams triggered.

So there is this amazing feeling when a pitch lands perfectly with the person sitting across from you at the fundraising table. It's [00:01:00] when you trigger something in an investor's brain that gets them to dream alongside of you. When that happens, you get to pitch a story that has holes and gaps in it that the VC will fill in their selves.

What I mean by that is when you paint an exciting enough story that's for some reason resonates with a venture capitalist, they will do the work for you In trying to figure out where it goes, how it's monetized, the next features that might come out, that'll make it a game changing company. And to do that, what you wanna do is make sure you set the stage with a problem that allows someone who has context for what you are talking about and the space that you're in to grab hold of, and then start dreaming and get excited about what is possible.

Now, the thing about getting a VC to dream alongside of you is [00:02:00] that you can't always predict which investor will actually have the necessary background in order to take what you give them and dream alongside of them. And that's part of the, I don't know if I would call it fun or the pain of fundraising. And what I always describe is that you don't know when

some venture capitalist who says they're a generalist investor or focuses on certain areas, but leaves open investments to invest in opportunities, being an opportunistic investor, all these things that VCs put out there, you never went know when one of those investors will have accidentally had a dinner with an old friend whose spouse comes along and happens to be

the car dealership industry. Now, this spouse talks a little bit about the growing market, the wealthy owners that are running businesses with [00:03:00] antiquated technology, which allows you to the next day happen to talk to a founder who's building technology to support car dealerships. If you are that founder, you would never have guessed that the VC sitting across from you

would've potentially had a dinner very recently where he got to hear from the inside about the opportunities in the world of car dealerships. But because those things had been in place, when you start your pitch and you talk about the number of car dealerships in the United States, the amount of money that flows through there, the profit margins that these dealerships drive.

You then get to say just a few little things about your unique solution to a problem, and that investor will grab hold and start dreaming. What if you could also do this? What if you could apply new AI technologies to this opportunity? What happens when you expand to tangential opportunities? Not just brand new car [00:04:00] dealerships, but the used car dealership segment?

What about going to the wholesale side of things in the auto auction space? Investor because of the conversations and the back knowledge that they had of your space start dreaming alongside of you and they pull the pitch out of your hands and start filling in the gaps for you. This is the fundraising version of product Market Fit, and it's what we are all after.

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**Jason Yeh:** [00:05:00] So [00:06:00] what I would tell you this is the most you can do is be great at setting the stage and making sure the problem space is clear. From there, you will be able to get some people excited about just the high level description of what you do, and then there will be some crazy deep product market fits slash VC dreaming of moments

Where you just happen to hit Yahtzee on a venture capitalist that has background knowledge that makes it all line up for them and they see the vision perfectly. Not even exactly your vision, but the vision that they now have for you, and they'll want to learn more.

So do your best to set the stage and then just remember your pitch is not for everyone. You will continue to pitch random people who on paper you won't know if they will dream alongside of you, but you want to keep going until you find those and know that at some point you will hit that.

Okay? So keep your bar high. Be great at setting up the story and know that there are [00:07:00] investors out there that will dream alongside of you. When you get that feeling the first time, you'll know what it looks like and you'll be looking out for it in the future. All right, that's this episode of The Back Channel.

I'll see you next time.

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