30 vc truths i should’ve known as a founder

what vc really looks like from the inside

Sep 24, 2025

Before VC, I was a founder. I thought I knew how investors picked winners.
I didn’t.

What I’ve learned sitting on the other side of the table is so different from the optics I had as a founder. If I had to start over, these are the lessons I’d practice ruthlessly.

Let’s dive in 👇

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Here are 30 Brutal Truths About Raising Venture Capital:

Raising VC is a game of leverage. You need more of it than the next founder.
Leverage = proof. Traction > no traction. Product > idea. Growth > potential.
Investors back signals. Harvard, YC, FAANG… they’re shorthand for overachievement.
Past hard things matter. If you’ve done it before, it makes you 10x more fundable.
“Deserve” doesn’t exist. Investors care about what you’ve done, not what you want.
VCs are judged too. They need to justify why they backed you. Signals protect them.
Venture capital flows to the top 1% of founders. The rest get filtered out.
Your first term sheet is everything. Get it fast, then use it to create FOMO.
Fundraising is supply and demand. More options = better terms.
Top founders pick top funds, not the other way around.
Small or unknown VCs can only win if they deliver a sharp, unique edge.
Warm intros help, but reputation compounds more.
VC won’t do your job. They give money, not miracles.
Expectation is speed. Growth must be aggressive.
Raising without traction? You need an outrageous story or background.
“Value-add investor” is overrated. Pick capital + brand first.
Term sheets are binary. Until you get one, you’re at zero.
Fundraising is theater. You’re creating a market for your equity.
Don’t chase validation. Chase momentum.
Investors follow other investors. Herd behavior is real.
Risk-free for them = impossible. Reduce it as much as you can.
You’re raising a narrative as much as capital.
If you don’t believe you’re in the top 1%, neither will they.
The faster you internalize this, the less brutal it feels.

And here’s the hardest part, but also the best:

This is a long-term game. Fail, learn, repeat. Each cycle compounds.
Build a startup → fail → go work for a great founder → learn.
Build again → fail → work with smarter people → learn.
Win small, then win bigger. Stay in the game long enough and your odds skyrocket.
Follow what feels like play to you. Do it your way, not everyone else’s.

👉 At the beginning you are contrarian. That’s how it’s supposed to be.
👉 Learn to pitch, but learn to listen.
👉 Don’t be delusional—be radically aware of who you are and what you’ve done.
👉 It’s not about knowledge. It’s about action.

Share this with your friends building a company and let me know if it resonated 🔥

PS: apply to get funded by founderpath here

Cheers,

Guillermo

FAQs

1) Leverage, Traction & Signals

Q1. What does “fundraising is a game of leverage” actually mean? A: Leverage is the power to choose. You get it by showing proof—revenue growth, retention, product usage, or elite signals—that makes multiple investors want in. More options = better terms.

Q2. What counts more: idea or traction? A: Traction beats idea. Demonstrable usage, revenue, or growth derisks the bet. A strong product with early adoption will outpull a great idea without proof in most markets.

Q3. Do credentials like YC, Harvard, or FAANG really matter? A: Yes—as signals. They compress diligence and protect investors’ careers. Signals don’t replace performance, but they raise your floor and speed up ‘yes.’

Q4. I haven’t raised before. Does “doing hard things” help? A: Past hard things (exits, zero‑to‑one builds, elite roles) boost fundability. They predict execution under stress and make you easier to underwrite.

Q5. What if I don’t have elite signals? A: Manufacture proof: ship fast, show growth, recruit great talent, collect customer love (NPS, case studies), and stack logos. Signals are earned via momentum.

2) Term Sheets & FOMO

Q6. Why is the first term sheet so important? A: It turns “maybe” into a priced market. Once you have a credible offer, you can accelerate timelines, invite competition, and negotiate better terms.

Q7. How do I get a term sheet fast? A: Time‑box the process, pre‑lineup partners, run parallel meetings, share crisp metrics, and state a clear decision date. Make it easy to say yes.

Q8. How do I create FOMO with investors without being gimmicky? A: Publish real progress (weekly updates), reference other active conversations (without bluffing), set a short window, and keep shipping visible product.

Q9. Are term sheets binary? A: Practically yes. Until a signed term sheet is in hand, you’re at zero. Verbals help momentum, but paper wins.

3) Process, Momentum & Narrative

Q10. Is fundraising really “theater”? A: Yes. You’re creating a market for your equity. Story, stagecraft, and sequencing matter—but they must be grounded in truth and metrics.

Q11. Should I chase validation or momentum? A: Momentum. Validation flatters; momentum compounds. Optimize for fast cycles of build → measure → share.

Q12. How do investors actually pick winners? A: They triangulate on proof (traction & growth), team quality (past hard things), market size, and social proof (signals, co‑investors). They also optimize career risk.

Q13. What does “reduce risk for them” look like? A: Tight metrics, clear unit economics, fast learning loops, short sales cycles, strong retention, and customer proof points de‑risk the bet.

Q14. How do I raise a narrative, not just capital? A: Anchor on a compelling why, define the inevitability (market tailwinds), show the engine (distribution insight), and tie metrics to the mission.

4) Early‑Stage Without Traction

Q15. Can I raise pre‑traction? A: It’s rare. You’ll need an outrageous story, elite background, or unique insight with fast product velocity. Otherwise, bootstrap to proof.

Q16. How much traction is “enough” for seed? A: There’s no universal line, but month‑over‑month growth (15–25%+), early revenue/LOIs, strong retention, and a pipeline can be persuasive.

Q17. What should I do after a failed raise? A: Shorten cycles. Ship, get customers, improve gross margins, recruit an A+ co‑founder/advisor, and relaunch with proof. Staying in the game compounds odds.

5) Value‑Add, Warm Intros & Reputation

Q18. Is the “value‑add investor” real? A: Sometimes, but overrated. Prioritize capital + brand that helps with future rounds and hiring. Specific edges (distribution, customer intros) beat vague promises.

Q19. Warm intros vs cold outreach—what works? A: Warm intros help, but reputation compounds more. Build founder references, publish progress, and be insanely reliable. It turns into inbound interest.

Q20. Do investors just follow other investors? A: Herding is real. Strong lead + respected co‑investors accelerate consensus. Use it—don’t fake it.

6) Speed, Growth & Expectations

Q21. How fast do VCs expect me to grow? A: Expectation is speed. Show aggressive but responsible growth, clear goals, and tight feedback loops. It’s not just numbers—it’s tempo.

Q22. Will VCs fix my problems? A: No. Money is not a miracle. Assume execution is on you; investors provide capital, perspective, and network—not product‑market fit.

7) Non‑Dilutive Capital (SaaS)

Q23. When should SaaS founders consider non‑dilutive capital? A: When you have predictable revenue/retention and want to avoid dilution or board entanglements. It’s strong for financing CAC, working capital, or smoothing seasonality.

Q24. How does a SaaS credit score work? A: Connect billing/metrics (Stripe, ProfitWell, Chargebee, etc.). A model scores revenue quality, churn, growth, and net retention to set limits and rates.

Q25. Can I mix non‑dilutive capital with VC? A: Yes. Many use it as a bridge to milestones, extending runway to a stronger priced round while preserving equity.