Jason Yeh
June 17, 2020

I published this to my very first subscribers to thank them for getting behind my work and its end goal. My hope was that these insights into the weird art of fundraising and the tools I build help more world changing businesses get started.

You all rock for reading, supporting, and sharing.


With early stage investing, there are more unknowns than knowns. It’s an imprecise art that relies heavily on triangulation, extrapolation, and instinct (aka gut feel). All those elements need to line up to make an investor believe the entrepreneur’s version of how the unknowns will unfold into a massive unicorn style future.

This is the backdrop for why it’s so important for entrepreneurs to know exactly how every part of the narrative they’re delivering connects with each other.

Story Time

I'm currently helping a superb founding team with amazing technical talent, deep industry expertise, and zero fundraising experience. For most founders, this combination can be amazing. The combination usually produces a level of naive earnestness that investors find quite endearing. Plus, the lack of polish can highlight technical talent and/or industry expertise.

Sometimes, however, that lack of fundraising polish can bite teams in the ass. Sometimes inexperienced teams can be too cavalier in how they try to excite investors. Be careful here. Exciting numbers are one thing, numbers that bring credibility into question are another.

Last week, the team I'm helping was asked to project their financials a few more years beyond the initial plan they shared. In a rush, some spreadsheet equations were fumbled which produced a crazy high revenue number 5 years out. In this case, no one was trying to mislead or overstate the business. It was just a mistake, and no one caught it before sending. The investor did of course (that's what they're trained to do) and almost immediately raised a red flag.

The single mistake (applying a fixed % growth for too long) was not a big deal on its own. They explained what would actually happen 5+ years out and how it was a mistake in building the model. The real issue for them and for others in this situation is that one small blip can be enough to cause an investor to question every other thing they've had to believe to trust the pitch.

There is a lot in fundraising that requires spin, finesse, etc. You should never lie of course (a topic for another time), but the ability to tell a great story is essential. That said, all founders need to make sure every part of their narrative follows reasonable logic and assume that anything they share will be tested on that logic.

Whether it’s because of a careless error or from being too aggressive, one instance of reasonable doubt can poison the whole well.

Questionable credibility somewhere is questionable credibility everywhere.

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