I lost $2M because I didn’t understand Series A. Read this before you pitch.
I used to think raising a Series A was about having the perfect pitch deck, a massive market, and a charismatic CEO. I was wrong. It cost me a fortune to learn the truth, but it’s a lesson I’ll now share with you for free.
Back in 2015, with my first company, we had everything investors supposedly wanted. We had a great team, a product people loved, and we were growing fast. We went into our Series A with confidence, maybe even a little arrogance. We pitched to all the top-tier VCs on Sand Hill Road. They all said the same thing: “You’re too early.”
Too early? We had a million users! We were making money! How could we be too early? It was a soul-crushing experience. We ended up raising a much smaller round from angel investors, but the damage was done. We lost momentum, and a competitor with a fraction of our traction but a better fundraising strategy blew past us.
It took me years to understand what we did wrong. We were playing the 2015 game in a 2015 world. The rules have changed. And they've changed again since 2024. What worked then won't work now.
The Myth of the Perfect Pitch Deck
Founders spend weeks, sometimes months, perfecting their pitch deck. They obsess over every slide, every bullet point, every font choice. I’ve seen decks that are works of art. But here’s the brutal truth: your pitch deck doesn’t matter as much as you think.
I’ve made over 200 angel investments, including in companies like Anthropic, OpenAI, and Scale AI. I’ve seen thousands of pitch decks. Most of them are forgettable. The ones that stand out aren’t the ones with the slickest design. They’re the ones that tell a compelling story.
Your deck is just a conversation starter. It’s a tool to get a meeting. That’s it. The real magic happens in the meeting itself. It’s about the connection you make with the investor, the conviction you convey, and the vision you paint.
When we were raising for RemoteTeam, the company Gusto eventually acquired, our pitch deck was a mess. We threw it together in a weekend. It was ugly. But it told a story. It was a story about a future where remote work was the norm, not the exception. This was in 2019, long before the pandemic made remote work mainstream. We were betting on a trend that most people thought was a niche. But we believed in it. And that belief was contagious.
We didn't have a perfect deck. We had a powerful story. And that's what got us funded.
The Counterintuitive Approach to Investor Relations
Most founders treat investor relations as a necessary evil. They send out a monthly update, maybe a quarterly report. They see it as a chore. I see it as a secret weapon.
I learned this lesson the hard way with MovieLaLa, my second company. We were acquired by Gfycat, but it was a long and winding road to get there. We made a lot of mistakes. One of the biggest was not managing our investor relations properly.
We had some big-name investors, including Marc Benioff, the CEO of Salesforce. But we didn't do a good job of keeping them in the loop. We were so focused on building the product that we neglected the people who had given us the money to build it.
When things got tough, and they always do, we didn't have a strong support system to fall back on. Our investors were in the dark. They didn't understand the challenges we were facing. They couldn't help us.
With RemoteTeam, I did things differently. I treated my investors like co-founders. I was brutally honest with them. I shared the good, the bad, and the ugly. I asked for their help. And they delivered.
They made introductions to customers. They helped us with hiring. They gave us advice on strategy. They were our biggest cheerleaders. And when it came time to sell the company, they were our biggest advocates.
Don't just send your investors a monthly update. Call them. Have dinner with them. Ask for their advice. Make them feel like they're part of the team. Because they are.
The Power of SAFE Agreements and Convertible Notes
When we were raising our Series A for my first company, we wasted months negotiating the terms of the deal. We went back and forth on valuation, on board seats, on liquidation preferences. It was a huge distraction. And it cost us dearly.
Today, there’s a better way. SAFE agreements and convertible notes have become the standard for early-stage fundraising. And for good reason. They’re simple, they’re fast, and they’re founder-friendly.
A SAFE (Simple Agreement for Future Equity) is a contract that gives an investor the right to buy stock in your company at a future date. A convertible note is a loan that converts into equity at a future date. Both are great options for early-stage companies because they allow you to raise money without having to set a valuation.
This is a huge advantage. It means you can raise money quickly and get back to building your business. It also means you can avoid the painful process of negotiating a valuation with investors.
I’ve used SAFEs and convertible notes for many of my angel investments. They’re a win-win for both founders and investors. They allow founders to raise money quickly and efficiently. And they give investors the upside of an equity investment with the downside protection of a loan.
If you’re raising a Series A, don’t get bogged down in a long and protracted negotiation. Use a SAFE or a convertible note. It will save you time, money, and a lot of headaches.
Stop Pitching, Start Building
Raising a Series A is not about luck. It’s about strategy. It’s about telling a compelling story, building strong relationships with your investors, and using the right fundraising instruments.
But most importantly, it’s about building a great business. At the end of the day, that’s what investors are looking for. They’re looking for a company with a great team, a great product, and a massive market opportunity.
So stop obsessing over your pitch deck. Stop chasing every investor on Sand Hill Road. Stop doing Series A like it's 2024.
Start building. Start creating value. Start making something people want. And the money will follow.
Frequently Asked Questions
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.