What to do with non-lead investors + Fundraising Fieldnotes - 10.22.21

Hey - it’s Jason Yeh 🕺🏻

This is my Friday recap of thoughts I’ve had while helping founders solve their fundraising challenges this past week (10.22.21)

If you have any questions, please reply! I try to get to every comment/question I get :)

On to the Fieldnotes for 10.22.21…

Non-lead investor says they’re interested but doesn’t offer to make intros to leads 🚩🚩🚩🚩🚩🚩

Calling out and explaining this red flag was originally going to be the first example in a piece covering a series of short red flags within fundraising. Instead of going a mile wide and an inch deep within a stale meme, I’m going to hone in on this somewhat ambiguous concept.. It’s a great opportunity to share more details on: 

1. What a non-lead investor is

2. How they operate / What you should expect

3. How you can leverage them

What is a non-lead?

To start, it would be helpful to understand what a non-lead investor is. While simple sounding, this is not so crazy of a starting point because many founders I talk to don’t realize that “Lead Investor” isn’t a formal term that the NVCA or some set of laws defines. It has a loose definition at best. In my essay comparing leads with co-leads I offered this simple description of a lead investor:

In the most traditional sense, a pure lead investor is 1) going to have at least 50% of the round and 2) will set the terms 

So with that directionally accurate description of a Lead, a non-lead is a bit easier to define:  An investor who has less than 50% of a round and who won’t provide you with a term sheet.

How they operate / what you should expect 

(continue reading…)

Storytelling is important

Unpopular opinion: doing things to sound good to investors will help your business

Till next week. Stay adamant and be chased.

Jason

p.s. DYK Squid Game is reportedly set to drive $900MM of value for Netflix??

Small asks!

If you thought this was helpful or enjoyable in anyway, I’d love for you to:

• Forward this newsletter with others who would enjoy it

• Follow me on Twitter where I’ve begun building in public (my course, my podcast, etc)!

• Listen with a friend to Funded, my podcast that tells the rollercoaster stories of how founders raised millions (and subscribe🙏)

• Ask me your fundraising questions so I can help you and cover them in a future issue