The Truth About Raising Money from Venture Capitalists

I feel like nobody talks about what it’s like to ACTUALLY raise a seed round from a VC. I mean what does it really FEEL like to raise money.  Everyone thinks about how awesome it would be to do it, but nobody really talks about what happens afterwards.

Let me give you the low down. It’s just as amazing as it sounds.  For about 30 minutes.  No actually, it’s amazing for 45 minutes: the exact time it takes to fly from San Francisco to Las Vegas, because that’s what I was doing right after our investors said yes.  (Ironically, the trip had been planned a while ago to visit my mom and dad.) But I got on the plane, and I remember seeing this couple who looked like they had just been married and they were insanely in love and I remember thinking hmmm…who do I think is happier at this moment. And I cast the vote for myself.

And then we landed.

And reality started to set in.  And the only feeling I had was…ABSOLUTE TERROR.  Because I started to realize, HOLY SHIT.  I JUST GOT MORE MONEY THAN I HAVE SEEN IN MY LIFE TO DO THIS THING I SAID I WAS GOING TO DO. OH GOD. NOW I ACTUALLY HAVE TO DO IT.  It is, by far, one of the most terrifying things to experience.  Because it’s not your money.  It’s someone else’s.  So you can’t mess up on someone else’s dime, that’s just not ok man. And then you start to do the math:

Ok so I need to make these guys 10x over the next 10 years, which means that my company at some point, needs to be worth about $30M for this to be called a success.  Ok fine, no big.  I just need to…CREATE A $30M DOLLAR COMPANY (AT LEAST).  Let me just say, for the record, that’s my than my entire family lineage for the last 100 years, COMBINED.  And that’s just for a seed round.  If you’re doing a Series A, you’re committing to at least $1B nowadays.  WHICH IS NUTS.  HAVE YOU SEEN A BILLION OF ANYTHING?!

Yes, investors know what they are getting into, that really there’s a very very slim chance of you actually succeeding.  But that’s not the point- that doesn’t help me, the entrepreneur, feel any better.  Because as an entrepreneur, all you have is your track record, and self respect.  That’s really it.  You have to cocky and crazy, at the same time.  And that fear/responsibility of delivering on that promise of building, essentially, an empire, never really goes away.  I talked to a lot of my friends who have raised money and they have said similar things.  I think over time you just get better with reducing the negative side effects of that fear.  Sometimes you get a huge does of it in the morning, and you have to stop yourself from hyperventilating/morning nausea.  Sometimes you have a hard time sleeping, going over all the ways you really could screw this up.  And then, somehow, it just happens less and less. Until it doesn’t happen very much at all. And then for maybe a few days, you forget about it.

Until you have to raise money again.

And then that fear, it starts ALL OVER.

That’s pretty much what it feels like to raise money from a VC.