Lessons from a $16.3M Fundraise + Fundraising Fieldnotes 5.21.24

Featuring Mohak Nahta, Founder of Atlys

Author

Jason Yeh
May 21, 2024

If you can believe it, it's been a few years now since the crazy bull markets we saw back in 2021. At the time we saw founders with nothing more than interesting ideas raising millions of dollars. Now, not so much...

To that same point, the past few years have (hopefully) taught founders a lot about not getting ahead of themselves, and focusing on what they can build NOW before raising big rounds of capital. It's made founders more resilient.

A few weeks ago my conversation with Mohak Nahta dropped on Funded where we talked about his past two raises for Atyls - his most recent being a $12M Series A announced this past September. The cool thing about this episode is that we got to hear Mohak's experiences from raising his Seed round in the heat of the hottest market... to raising his Series A in the complete opposite environment.

I hope you give the full episode a listen but in case you don't, here are my three biggest takeaways:

1. Early-stage Investors are Buying Your Conviction

"People who invest in you early on aren’t buying your ability to build a product. They're not buying your ability to build a business. They're just buying your conviction to do something great"

I talk about this idea of early-stage investors looking for two things when talking with founders. Those are:

  • Is this a huge opportunity?

  • Is this the team that can do it?

If you're an early-stage founder meeting with an investor, your job is to convince them of those two things. Investors want to know if you are the person that can handle all of the crazy things building a startup can and will throw at you.

One of the best ways to convince them of that is having people who can vouch for you. Which leads me into my next takeaway...

2. Find Your Way In

"One thing I did was that I actually found the warmest source between a seed stage fund that I wanted to talk to . . . So it wasn't that I'm asking one person to introduce me to 10 others, or I'm asking a sort of everyone would introduce me to random firms. It was just like, ‘Okay, do you know this firm really really well, or this partner really really well? . . . Can you make a warm introduction?’ "

Something Mohak touches on throughout the episode is this idea of utilizing the network that you have.

And before any of you say "But what if I don't have a network?" - if you don't have one, go out and build one. Fundraising aside, a strong network helps you in every aspect of your business. All it takes is one or two key dominos to make a crazy difference.

Mohak took the route of warm intros for his seed round, which I'm sure you all know I'm a huge fan of by now. Warm intros are even more important when it comes to raising a seed or pre-seed round because without it, investors have barely anything to go off of. They're all secretly wondering "who is this person and why should I trust them?"

So - look at your network. Figure out which of those people are connected to the firms you want to get in touch with, draft up a killer forwardable email and get to work.

3. Momentum is Your Best Friend

"Momentum begets momentum . . . and it amplifies. So the other thing was that, this cap table is very well connected, right? They knew everyone, almost everyone. So what I did was as we started getting any term sheets . . . I started just sending it to the group, right? And it was still like 30 odd people, but the thing is that . . .these people, because they talk to investors all the time, they started talking about it naturally. [They're] like, look, I funded this company early on and now they have this term sheet or that term sheet. And that created more and more hype, right?"

Momentum is everything in fundraising. From the moment you launch your fundraise your job is to not let that momentum stop. Mohak found a genius and extremely efficient way to keep the momentum going by leveraging his existing cap table to create FOMO around his raise.

Something you have to remember is that investors talk. They're constantly sharing deals they're excited about and deals that they're involved in. So... when they hear one of the companies they've invested in is getting some heat, chances are they're going to share the news with their network, who then might share the news with their network, and so on.

Take advantage of the network that you have, and think like an investor.

Alright, those were just three of my takeaways from this episode!

If you want to hear:

  • How the idea of Atlys was formed

  • The story behind Mohak raising his seed round

  • The story behind raising his series A

and more... make sure to listen to the full episode. I'll leave the links below!

Be chased,
Jason

Listen here:

Mohak Nahta

Atlys

Funded

I've lost a lot of money not investing in/alongside friends... What's the takeaway for founders? VCs want to invest in and around their friends so get your networks to overlap wherever possible

Very clean way of saying... just keep your team slide you and your co-founders

😂

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