Plausible futures

#66 Angelinvesting.it - From idea to Series A - Weekly Newsletter

3 minutes to reflect

Simone asks: "How much are you raising?"

Founder replies: "X at a Y pre-money valuation."

Simone probes further: "And what are the goals of this round?"

Founder responds: "Our primary objectives are to hire three tech developers, enhance our marketing efforts, and roll out two key features."

😔😔😔😔 WRONG!!!

This response raises concerns for me, indicating that the founder may not fully understand how the VC world operates. Each funding round should reduce the inherent risks of the project, typically by addressing 1-2 layers of uncertainty.

A more effective way to address the question is through a three-tiered framework:

1. Validation Objectives: Clearly state the assumptions you intend to test with this funding.

2. Quantitative Goals: Define specific metrics, such as achieving 10,000 active users, which will substantiate your initial assumptions.

3. Action Plan: Detail the key initiatives necessary to achieve these goals.

Simone reiterates: "And what are the goals of the round?"

Founder clarifies: "(1) We aim to validate market demand and the solution's stickiness. (2) We're targeting 10,000 active users with a churn lower than 30% within the next six months. (3) We plan to allocate X amount between technology and marketing."

😀😀😀😀 GREAT ANSWER!!!

The decision now rests with us as investors, we need to evaluate if the envisioned future is plausible…

• Is the planned expenditure reasonable?

• Are the set goals achievable within the allocated timeframe and budget?

• Will achieving these results favorably position the company for subsequent funding rounds?

As investors, we are hunting for signals. No one knows the future, but a founder incapable of articulating priorities does not play well with the odds of success at all.

2 Tools to advance to pro

One of the greatest VCs of all time has produced a document on plausible scenarios for the coming decades. Absolutely a must-read. Check it out

Mark Zuckerberg discusses Meta's AI strategy. A great CEO who is playing the game on the future as the top of his class. Worth watching and rewatching.

1 Reason to smile

A meme as funny as it is real about the daily challenges of a founder.

Have a great weekend,

Simone

—

Want to read more: click here

Want to invest with me: click here

Want to share a deck: click here