The Story Behind Lex's $5.6M Seed Round + Fundraising Fieldnotes 9.03.24

Featuring Jennifer Lewis, CEO of Lex

Author

Jason Yeh
September 03, 2024

When SVB crashed last year, it was total mayhem. People were panicking, trying to pull their funds, wondering what was next, and a lot of founders ended up suffering. One of those founders was Jennifer Lewis, CEO of Lex.

At the time, Jennifer was just wrapping up her seed round when it all went down. And what are the odds that her three biggest checks all used SVB. That round ended up falling apart, and instead of succumbing to the shittiness of the situation, Jennifer went back out and was able to pull together an impressive $5.6M seed round led by Female Founders Fund.

This conversation is one I hope you listen to, but in case you don't, here are three of my takeaways from our conversation…

  1. Don't Waste Time Convincing Investors

"Something that I'm learning going into the next fundraise is that you want someone to already be halfway there on the thing that you're building, and then it's much easier. I shouldn't be convincing them about the future of Gen Z; that should be something they're already interested in. Then they'll know that LGBTQ is a huge market for them, and they know the stats around social. So, I'm just proving how I can be the person to lead it."

She's absolutely right, and it's a smart way to approach fundraising. You want to be in the room with investors who already see the value in what you're building. Realistically, there will be some investors on your target list who don't understand the space. But, the more time you can spend crafting a target list of investors who DO understand the space and the problem you're solving, the better off you'll be. Target list building is a pain, but the more time you take to do it right, the better off you'll be in reaching the right investors.

If you're having to start from ground zero, convincing them about the rise of Gen Z or the importance of the LGBTQ market, you're wasting valuable time. The best investors are those who are already clued in—they understand these markets, they've seen the data, they know the potential.

This way, the fundraise becomes more of a collaborative effort rather than a pitch. It’s about aligning with people who believe in the same future you do and are ready to back someone who can make that future happen. You just have to prove to them that you're the one to do it.

  1. Acknowledge the Stats, but Don’t Live by Them

"The statistics show that only 2% of female founders raise capital, down from 2.7% the previous year, so it’s declining. For LGBTQ founders, it’s just 1%. The odds aren’t in my favor, but I can acknowledge these statistics and still choose to ignore them. I know I am the right person for the business I’m building because of my background and personal story; we can get into it later if we want to."

Seeing those stats —yeah, it's pretty discouraging. And with the numbers slipping from the previous year, it’s a clear sign that there's a long way to go. But the thing is, numbers like these only tell part of the story.

What’s really inspiring is when founders don’t let these numbers define them. They know the odds, but they also know their own value. It’s about saying, “Sure, the stats might not be in my favor, but that doesn't mean I'm not the right person to make this happen.” When you’ve got a unique background and a personal story that fuels your drive, that’s something data can’t measure. It's also the very thing that breaks patterns and creates new ones.

As cliche as this might sound, it's the drive, the passion, and the determination to push through that really move the needle with investors. Jennifer recognized that and used it as fuel to close her seed round.

  1. Everything Comes Back Around

"We found that some of the investors who eventually invested in us had actually seen our deck before. They’d say things like, 'Oh yeah, I’ve already seen this deck.' I think what really helped is that you shouldn’t underestimate the people who aren’t going to invest in you because they can still talk about you."

You know it’s easy to get tunnel vision during fundraising and only focus on the investors who are ready to cut a check. But don’t sleep on those who pass or aren’t ready to jump in right away. Sometimes... they can end up being just as valuable.

I’ve seen it time and time again —an investor might pass, but they’ve seen your deck, and they’re talking about it with their network. Next thing you know, you’re getting calls from people you’ve never even pitched to.

Start rewiring your brain to think of every conversation as an opportunity to spread your story. Those investors who say no? They might mention you to someone who’s a perfect fit, or maybe they’ll come back around when the timing is right. The startup scene is all about connections. Your story, your deck, your pitch —it travels.

So when you’re out there pitching, remember that every conversation counts. The people who pass on you today might be the ones who help you make connections tomorrow.

Alright, that's a wrap. If you do want to listen to the full episode, I'll leave the links below. And if you're really feeling nice... feel free to leave us a review 😜 

Be chased,
Jason

Listen here:

Jennifer Lewis

Lex

Funded

Jason Yeh (host)

Sponsors

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If you think you truly solve a problem, it's your moral imperative to get it into everyone's hands who needs it. Go after them.

…and my cheeseburger, and probably everything else in the bag 🤣🍟🍔 

Small asks!

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

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  • Are you planning to fundraise? Join Adamant Fundraising - the fundraising accelerator program that's helped founders raise over $311M 💰

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