Hey friends, it’s Jorian—welcome to Into the Ring. I’m a startup fundraising coach for top founders and have worked with 60+ founders who’ve raised over $270M.

Okay, this newsletter has nothing to do with free hotdogs. But I did completely redo my website: jorianhoover.com

Honestly, I’m feeling kind of riled up right now. In the past three days I’ve had multiple back-and-forths across social media with what I call “bootstrap purists”. If you want to read more about that, check out my 1min take below.

I’ll also be sharing the past two weeks’ Tier 1 VC deals (apologies for my absence last week) and my recommended VC essays & podcasts.

And last, I’ll be doing a deep dive into the language of VCs. Why not understanding it can be a big problem (hint: this applies to even well-networked founders) and what you can do about it.

As always, thank you for being part of this Into the Ring tribe of 2,000+ startup founders and operators/investors from OpenAI, Anthropic, a16z, Lightspeed, etc. If you think someone else might like this newsletter, they can sign up here.

Now onto today’s newsletter!

Nothing gets me riled up more than what I call “bootstrap purists” on LinkedIn, X, and in the real world.

What is a bootstrap purist?

It’s someone who believes that building a bootstrapped business is the only way to go. That there’s something inherently better about going bootstrapped than going with VCs. That VC success stories are a myth, and only half a dozen people have ever succeeded with VC funding.

Look, I have nothing against running a bootstrapped business (hell, I’m running one myself!).

But I do get frustrated when people think that bootstrapping is the only way to go.

My dude, look around you. Almost every iconic tech business you know was either funded by VC, or received some other kind of funding. Very few were truly bootstrapped.

And there are more than a thousand unicorns, right beneath that layer of iconic companies, that have provided strong returns to VCs / founders and made a significant difference to the economy.

Yes, building a successful VC-backed company IS a long-shot. I’m not denying that. But I am denying that bootstrapping is always the right choice.

Rant over.

The language of VCs.

Once you’re in the know, you get it. SAFEs, term sheets, post-money valuation, C-corp, Delaware, market size, home run, and so on.

But if you’re not familiar with venture capital, these terms can sound completely foreign to you.

And if you think raising from VCs is a good fit for you, then you need to learn the language of VCs.

Cue the Donald Rumsfeld quote around known knowns, known unknowns, and unknown unknowns.

Known unknowns - sometimes I’ll come across a founder who’s had an amazing career in a different space and developed unique IP. Heck, they may have even bootstrapped and sold a company before. Now they have a new idea they’ve started pursuing, and they think VC might be a good fit for them. For them, not understanding VC language is a known unknown, and they’re eager to learn it.

Unknown unknowns - on the other hand, when I speak with fellow HBS alumni who are starting companies, they often have the 101 language down pat when it comes to VCs. However, this can give a false sense of certainty - in fact, there are many VC terms that they don’t know that they don’t know.

If you’re kicking off a VC fundraise and you don’t understand the language VCs use, then you’re at a serious disadvantage. You are doing this for the first time. Whereas the VC sitting across from you does this for a living.

If you don’t know the 101 language (the “known unknowns” I referenced earlier), then your meeting with a VC can get awkward. That’s because they’re trying to assess if you can become a billion-dollar company - and how likely that is. And if you don’t understand VC language, you’ll likely be singing a different tune - focusing on why your technology rocks or how you’ve spent 20+ years in this space.

It’s not that the VC wants you to trip up - indeed, they’re often looking for hidden rockstars no one else has found yet - but you’re making it harder for them to see the shine in you. And as they start to talk about investing in you, understanding their language poses another hurdle.

That’s where the 301 language comes in (the “unknown unknowns”). Even if you can talk shop with a VC in your pitch and follow-up meetings, you need to watch out when you head to term sheet negotiations. I see this trip up a lot of top founders. They get overly focused on valuation, without realizing that things like board seats, veto powers, pro rata, MFNs, and other rights can be even more important.

The good news? Learning this stuff isn’t rocket science.

The bad news? Many founders wait until it’s too late to learn it.

So founders, I offer you two recommendations to learn the language of VCs (since you’re already reading my newsletter, I won’t list that as a recommendation haha):

Okay, for recommendation #1, you might think I’m crazy, but hear me out. VCs, and let’s be honest, VC-backed founders too, spend inordinate amounts of time posting on X. It’s where the conversation’s at. If you’re new to this world, I highly recommend you follow a couple dozen VCs and a couple dozen VC-backed founders, and spend 10 minutes a day reading what they tweet. Soon your feed will turn into VC-land. And that 10 minutes a day will take you far when it comes to understanding what VCs care about.

And for recommendation #2, Venture Deals is a terrific book. At the time they wrote the fourth edition in 2019, Brad Feld & Jason Mendelson were both VCs and gave an honest, insider view into how VCs think startups should fundraise — all the way from building a story to closing. But the part that makes the book worth its weight in gold is its discussion around term sheets. The book walks you through all the key economic and control provisions in a term sheet, what you should negotiate for, and what to look out for. This doesn’t replace my advice to get a strong startup lawyer - in fact, it complements it: becoming knowledgeable about term sheets is core to learning the VC 301 language.

When you’ve learned the language of VCs, whether it’s just the 101 level or also the 301 level, you’ll feel so much more confident when you fundraise. Much of the stress from fundraising comes from feeling unsure about the process and like you’re at a complete information disadvantage relative to the VCs.

If you can even out that information disadvantage, then you’ll be super relaxed during your VC meetings and treat them like a rockstar.

Just kidding; they’ll likely still be stressful, but A LOT less stressful than if you didn’t know the language of VCs.

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