How to Maximize VC Interest

The issue that most Founders don’t realize is that VCs don’t like issuing flat/down term sheets. They don’t even like to issue small up-priced rounds.

VCs typically need to circulate and clear deals within their own Partnerships and a major goal is to bring companies forward that are “emerging rocket ships”. If a company is up and to the right but valuation hasn’t moved it brings up a whole series of questions that need to be answered by the lead Partner that add another layer of scrutiny to the underwrite. This is how things work and it isn’t going to change given the dynamics of how venture firms are typically run.

So, if a Founder wants to maximize interest from the VC community they need to describe a business worth 2X their last valuation. Full stop.

And before I get a bunch of counter factuals from the peanut gallery, I’m fully aware that today’s market is different because we’re going through a “grand reset”. But this isn’t typical. VCs can explain flat valuations in today’s market but they won’t be able to explain how “flat is the new up” next year.