Confidence is the most misunderstood ingredient in fundraising.

It's absolutely essential, and unfortunately it's something I watch founders wrestle with  constantly. Not because they are incapable of it, but because they're looking for it in the wrong place. They think confidence comes from the fanciness of a demo, the size of the raise number, or the volume of their voice. It doesn't. It comes from real conviction in everything that builds towards those things.

I've been coaching founders through fundraises for a long time now, and one harrowing question that speaks to confidence is...should i raise a pre-seed or a seed? a seed or a series A?

Here's a thing I always repeat: I would rather be in a position where I'm raising a Series X and the reaction from investors is, "Whoa, you have a lot more than most Series X's I've seen," rather than stretching into a Series Y where investors are quietly thinking, "Eh, it's a bit of a reach." That's my approach. Underplay. Start from a position of strength. Let the confidence flow.

People disagree with me on this. A lot, actually.

One of the most common questions founders ask is how much they should raise. And the advice they get is all over the place.

Some say, "Only raise what you need." Others say, "If you don't say you're raising $5 or $6 million, it shows a lack of vision." I've heard investors tell founders that a small number signals low ambition. That requesting less money somehow means you don't believe in what you're building.

I don't think that's true.

Here's the distinction that matters: if you go out raising $3 million in a timid, unsure way, like "I don't really know if I can pull this off, maybe I'll test the waters," then yes, that signals uncertainty. People can feel it. And it's not the number that's the problem. It's the energy behind it.

But if you walk into a room and say, "A lot of people want me to raise $7 million. I know exactly how to deploy $2 million. I've built a million dollars of buffer and I've already executed on X, Y, and Z," something totally different happens. People lean in. They want to look at the numbers with you. If they like you and see a good deal, they want to invest as much as possible. They might even come back and say, "You could raise $3 million, but you're working in hardware, so why not raise $8 million? We'll lead that with $5 million."

That's how market dynamics actually work. You don't need to manufacture a big number to attract big capital. You need to communicate deep conviction in an appropriate number, and the market will respond.

This recently came up with a founder to building a really impressive robotics company...our interaction perfectly illustrates the problem.

Robotics is a super hot space right now. It seems like everyone who had been a SaaS investor is pivoting toward atoms, toward things that feel more predictably durable against the swirling, confusing, and honestly unknown future of what AI is going to do to software. There's a ton of capital flowing into the space.

This founder had an incredible background. All the right logos, all the right experience, a team that would make anyone jealous. In our initial meeting, he shared that $3.5 million was the amount he needed to achieve specific milestones. The plan was clear, the math checked out, and he was confident about it.

Then he came back for a second meeting and something had shifted.

He'd been talking to other people in the space. He'd heard about other founders and startups raising 2 to 3x what he was asking for. And it got into his head. He started deeply questioning his own strategy. "Should I be raising $7 million? $12 million? Am I leaving money on the table? Am I signaling weakness?"

I could feel the anxiety radiating off of him. It's a specific kind of anxiety that happens when a founder hears about someone else in their space raising more capital. They question themselves deeply when an investor says, "Why wouldn't you raise more money?" or makes an offhand comment about a lack of confidence related to a smaller raise.

It sucks to feel that. I've watched it happen too many times.

And my advice to him was the same thing I'll say here: the $3.5 million plan was the right plan. Not because raising more is always wrong, but because he had genuine conviction behind that number. He knew exactly what milestones it would unlock, exactly how the capital would be deployed, exactly what "done" looked like. Swapping that out for a bigger number he couldn't defend with the same precision would have actually made him less confident, not more.

I see a version of this play out with geography too.

I talk to founders from all over the country and all over the world who are members of my community. One challenge that comes up again and again is people from outside of San Francisco hearing about what San Francisco companies are raising from San Francisco-focused firms and feeling inadequate. Like they're underselling themselves. Like they need to match those numbers to be taken seriously.

Here's the thing I always come back to: put on blinders. Understand what you actually need to get to the next stage. If you run a good process, your confidence will flow into the markets. Investors who have more capital to deploy will naturally encourage great founders who are on the right trajectory to raise more capital. This is how it works. It's not something you need to force.

And if you do your job well, this kind of confidence can drive a startup based out of Columbus, Ohio to connect with investors in San Francisco and command the same valuations that SF-based startups do. Not because you inflated your number to match theirs, but because you were so clearly in command of your own strategy that investors wanted in.

So let's get specific about what I mean by confidence here, because I think it gets confused with bravado.

Confidence doesn't come from made-up numbers. It doesn't come from messages that are designed to sound confident. It comes from deep conviction in an appropriate strategy.

Figure out what you need to be confident. Then you can actually display real confidence.

That means doing the work upfront:

- Know your milestones cold. What does the next 12 to 18 months of runway actually deliver? What will the company look like then...not just 18 months older.
- Know your plan. Where do the dollars go and make sure you build in buffer.
- Know your "why this amount." Be able to explain why $3 million is right for you without apologizing for it not being $10 million.
- Understand the why amount needs to either get you to breakeven OR (more likely) allows you to tell a convincing story to the raise your next round

When you have that, the number almost doesn't matter. You can be confident in a big number and you can also be confident in a relatively smaller number. The confidence isn't about the amount. It's about the clarity and conviction behind it.

Here's what I've seen happen over and over when founders do this right.

They walk in with a number they truly believe in. Investors sense that conviction. If the deal is good, investors start competing. And when investors compete, they do the work of pushing the round size up for you. "You could raise more. Let us lead a bigger round."

That's so much better than walking in with an inflated number and having investors think you're stretching. In the first scenario, you're being pulled forward. In the second, you're pushing uphill. And btw, when you hear about a huge raise...THIS is usually how it comes about.

My encouragement to every founder dealing with this: still put on blinders and understand what you actually need. Run a great process. Let your confidence do the talking, and let the market respond to it.

You can't fake conviction. But when it's real, people feel it.

Be chased,
Jason

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