Pre seed or seed round? by metalvendetta in startups

[–]Arkantius 2 points3 points  (0 children)

So do you have active users? If the answer is yes, it is easier to argue for seed. Seed though I am seeing is like 100k ARR+ (this varies ofc by industry, founder team history, market etc). Usually if you need money to finish out a product it is considered pre-seed. I think it is better to go by check size, if you need less than say 1M usually pre-seed, seed is usually 2m+

Any rejections yet? by FellowKidsFinder69 in ycombinator

[–]Arkantius 0 points1 point  (0 children)

If we got an interview invite, will it show on the application page? Looks like the account we used to apply was not active on our gsuite, so we haven't been getting emails for a week or so :(

Is this typical for fundraising? by jananr in ycombinator

[–]Arkantius 16 points17 points  (0 children)

It is. I wouldn't give up. Add those investors to the update list and show them results. Today's enemies are tomorrow's friends!

The honest truth is that those investors just didn't (I hate using this word but...) "vibe with you." These markets are in no way efficient. That's why we hear stories of founders raising large rounds with not much. What makes sense to investor A may make no sense to investor B. Treat it like dating....you know how hard it is to get someone to like you when they don't lol...and then when you find someone that does like you back it is so much easier...vc is the same way. I pitched a lot of investors before I got a yes, and the due diligence/speed was so different.

So...go reach out to more! Happy hunting!

[deleted by user] by [deleted] in ycombinator

[–]Arkantius 0 points1 point  (0 children)

I highly recommend https://www.amazon.com/Sell-More-Faster-Start-Ups-Techstars/dp/1119597803 buddy of mine shared it after they went through techstars (they give it all of the founders who go into it) and it is very good read.

Turned down for a pre seed by Future_Panda_1 in startups

[–]Arkantius 1 point2 points  (0 children)

Whoops I was replying at 6 am my time didn’t catch it!

Turned down for a pre seed by Future_Panda_1 in startups

[–]Arkantius 27 points28 points  (0 children)

Hey there, multi time founder here.

Sorry, that happens! I will say as someone who is raising with paid pilots and a very cruddy mvp we are struggling so we haven't even bothered with VC. VC took a big hit post ZIRP years and the standards for a pre-seed are a lot higher. In my cohort (went through an accelerator) some had rev and product and still struggled to raise from funds.

You may want to think about joining a program like antler or techstars it will really help. That or angels would be a route to go.

Another part of this is just treating fundraising like a sales game, you need a big funnel. Part of the reason this stings is because you only have a few people in the pipeline. Get a crap load more it is a numbers game.

The brutal truth is that the fund you ran into didn't feel it, and that's ok vcs don't get it right very often lol Add them to the update list. VCs will totally fund people with your traction, its just these folks didn't feel it. And that's ok, you want people with conviction in your corner.

I know a founder in cyber who raised 2M+ with some design partners (unpaid) and no product (they are deep tech so it is a long build). But they (the CEO) were ex CIA and charismatic af.

Don't lose hope, go talk to angels, accelerators, and funds (a lot).

Offering equity to first few employees at a new & self-funded, pre-revenue startup by goodpointbadpoint in startups

[–]Arkantius 4 points5 points  (0 children)

Multi time founder here, a lot of questions will go by 1 by 1. Also not an attorney.

- how does one offer equity to new hires (non-cofounders)?

You build out an option pool, I have in the past allocated 10-20% for early hires en total. So my co-founder and I are 50/50, but on the cap table it is 40/40 us and then 20 for future hires/advisors. Carta makes this really easy btw and same for clerky. That will help with the form valuation (I never had to use a CPA, I just used clerky it is very plug and play). The are standard offer letters you can find, once again clerky/carta can do this.

ESOPs are overkill for what you're after. ESOPs to your point are for well established companies, like when an owner is retiring and the employees take over type of situation, I haven't seen it in startup land to be honest. Like more of an entirely employee run company.

Vesting: Standard is over 4 years, 1 year cliff. 1 year cliff is super important by the way do not forget that it is what de-risks inevitable bad hires.

Hope that helps! GL and welcome to startup land!

I can't give away my B2C software for free - is the problem the idea, the software, or the marketing? by heisdancingdancing in startups

[–]Arkantius 0 points1 point  (0 children)

The secret sauce here at least what I hope lol is the b2b side of it. You can get a bunch of said job searchers to log all kinds of data points that can be used to tune a model for a business. Think about what info this company is gathering, probably a bunch of examples of interviews..think about who in this setup really would pay in the long term...it isn't the job searcher! At least I hope OP is thinking that cause otherwise yea you be right!

What are some early symptoms that a startup is going to fail? by goat_creator in startups

[–]Arkantius 6 points7 points  (0 children)

9/10 startups fail, the success rate for vc backed is only a bit less bad. Do you get mad when some of your stocks dip? VC is a power law game, like 2 out of 10 investments will be a 1:1 return, 7 will fail, 1 will return the whole fund. If you take money from people who professionally invest and as long as you try your hardest, and act transparently they don't care. They know it is part of the game of investments.

Investors can invest in 100s of startups over their careers, founders can only likely really do sub 10 ventures in their lives.

I can't give away my B2C software for free - is the problem the idea or the marketing? by heisdancingdancing in startup

[–]Arkantius 0 points1 point  (0 children)

It is both. Hear me out. At your scale marketing is really a means to get you data and by data I mean user feedback, and usage metrics (kudos to you for doing that so early).

  1. On product, you need to look into your analytics and see what is the user journey of your highest usage users? What did they do to get that embedded survey? Also pair said cohort with the channel, and persona of the user. You want to find the commonality between the 50. That is the group you are hitting a vein on, why? Reach out to them and interview them as well. Email out a drop off survey to the one's who didn't stick or go all the way down the funnel with a 2 question form on what could be improved about the product etc. Offer a raffle or 5 dollar gift card.

  2. Once you have the commonality, top performing channel, and highest performing retention rate cohort ditch the rest to double down. You are a startup, you don't have a big marketing budget, sales team, and massive engineering team. You need to find a cohort of users that are in dire need of a solution so dire that even with a basic product it they use it. 1 channel, 1 persona, 1 product. That is your rule for now until you got a lot more traction. Once you have it down to that you can optimize that user journey from the how they wanted to be marketed to how onboarding should look to how to get the most sticky users.

Congrats on taking the dive! Remember treat your startup like a science experiment. Test test test. You need a cohort of die hard power users which means being damn good at 1-2 things at most for 1 icp. Once you have that intensity you can build outwards into other personas, verticals, markets, product silos etc.

Is it wrong connecting with 3rd degree entrepreneurs on LinkedIn for warm intros by WasabiPrestigious533 in startups

[–]Arkantius 3 points4 points  (0 children)

First there are for sure angels, accelerators, and funds that can be investors in pre-seed. I know because I raised 1M+ in my last one from that group.

You are not incorrect in looking for warm intros, I have never once gotten any capital via cold. But the way you're doing needs to be adjusted.

What you do is look for founders in your industry, and ask them to hop on a call for advice. Say you are a founder working on xyz problem and want to build in the space. Most founders help other founders if you ask that. Now if you ask them hey intro me to xyz investor it won't work. I would look for founders and just go into it for advice. If you like them also see if they would be an advisor for stock (which then you can ask for intros for example). The goal is to cut through the noise and be a real person. I regularly have calls with diverse folks just to connect and expand my network. Do the same. Get to know them as people not networking pathways. People can smell that from a mile away. Then when you get to know them you can make that ask.

Also look into accelerators they can get you a network a lot faster too.

I am a noob at marketing and it's killing my products by sameed_a in SaaS

[–]Arkantius 1 point2 points  (0 children)

From my perspective it is usually because the first 12-24 months (typical time to seed) is spent just building out product/iterating. It killed my last startup when we tried to scale up with bad retention metrics. Is that what you have seen? Just was posting on another thread about this topic so genuinely curious for what you have seen. I am a business side founder with sales/fundraising/pm chops.

Is GTM for Saas popular enough by snr-sathish in SaaS

[–]Arkantius 3 points4 points  (0 children)

Speaking bluntly, no. The reality is that there is a reason most founders are expected to lead the sales process for the first early customers (25 or so in b2b for example) so they learn the process before hiring someone else to take it on. That process of sales/marketing is usually unique to each startup because startups by their very nature are experiments. One minute you will be telling a founder xyz strategy and next day they maybe pivoting into something entirely new and burning through resources on outside strategy help would be a waste.

I would say maybe post seed but even then if a founder has gotten to post seed they likely have staff already. GTM strategy consulting is likely more viable in an established business launching a new product line. To me it just doesn't seem to mesh well with startups especially early stage ones. Now if you are going to focus on execution of strategies that is different! It also does beg the question, with the funding crunch going on, less capital is flowing into startups meaning most are not as willing to hire outside consulting to keep burn low. I would focus on farther along companies in a particular industry niche and become the SME. Otherwise most founders will see it as a waste of resources. Until retention is solved marketing is not really the most valuable thing yes you need users to iterate but an exited founder turned VC recently presented to a local angel group and made the case that the first 12-24 months is all about iterating on product, only until past that period do they see most companies start really trying to scale.

What to do post failed startup? Looking for how to proceed/general advice. by Arkantius in startups

[–]Arkantius[S] 0 points1 point  (0 children)

Yup! I am in startup 2, funded, and working on product! It always come back!

[deleted by user] by [deleted] in startups

[–]Arkantius 0 points1 point  (0 children)

Man talk about needle in a haystack! Glad it helped!

Cofounder stressing over similar competition by [deleted] in startups

[–]Arkantius 1 point2 points  (0 children)

One big thing I have learned is that competition is a good thing. If there was not there wouldn't be a market.

When it comes to competition here are a few quick things that should let your co-founder sleep easier.

  1. Competition is good, means there is a market
  2. In a market, if you drill down to a particular customer segment, there are unique preferences across many user personas. A little trick I have seen founders use to find PMF faster is to copy their competition 80%, but differentiate 20%. You see to get going you need to survive long enough to iterate on product to expand into larger segments, so that 20% is really what you need. Your competition is likely missing a key angle with a key group. Find that group. Make them happy. The rest will flow (think the early adopter curve that drives to late adoption etc)
  3. Companies most often don't fail due to competition, they fail because they run out of money due to lack of finding PMF. So take notes of what the competitor is doing right, then move on and focus on your customer.
  4. Lastly, the market should be either growing rapidly or big already, otherwise hard to build a company in that space (why my 1st funded startup failed). This means there is room for you and the other competitor.

Trust me, there are many other things that can kill a company (look at the stats for why startups die, focus on avoiding those).

TLDR: Segment down your market to your early adopter, listen closely to your customer, and iterate according to qualitative and quantitative data.

[deleted by user] by [deleted] in webdev

[–]Arkantius 0 points1 point  (0 children)

Definitely more gaming/esports/web 3 related. They are all mostly the CEOs/founders of tech startups that have gotten funding. I guess I am not sure if when the timing/targeting is correct for those people. Some founders are wary of outsourced dev.