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.

Apologies for missing the newsletter send last week - five of the founders I’m working with are live fundraising at the moment, so I was heads-down focused on that.

Did anyone else LOL at the memes of the Airtable acquisition (for $1.3B, down from $11B valuation)? My favorites: one of the invested VCs reminding everyone this was a top 400 exit since 2000 or the celebrations of VCs after their returns are <1x.

Back to serious fundraising business 🙂 -- today I have a 1min take on the pre-raise VC meeting, the top Tier 1 funding rounds from the past two weeks, my recommended VC essays & podcasts, and a deep dive on what to do if a VC offers you a pre-emptive term sheet.

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!

Today’s 1min take rhymes with my deep dive because it also focuses on the pre-kickoff window. Except instead of speaking about pre-emptive VC offers, I’m going to tell you about pre-raise VC meetings.

Too often, founders tell me about a situation like this (the below is a real example from a founder I’m working with):

1/ the founder is planning on kicking off conversations with VCs in September

2/ in July, during the prep period, a VC reaches out and wants to meet with the founder

3/ the founder takes the VC meeting - but then is confused when the VC at the end says “I’ll talk with the other partners at my team and get back to you”

…in that moment, the founder realizes the VC had a very different interpretation of the meeting. The VC thought that the founder was actively fundraising, whereas the founder thought this was a simple coffee chat.

Very often, the VC ends up passing in situations like this because the founder wasn’t prepared. And so if you’re being asked to take pre-raise meetings with VCs, make it clear that you’re not fundraising yet, so that they don’t take it back to the partners after the meeting. Or, if you’re too close to kickoff, you might even consider holding off on the conversation until then.

Founders and VCs, have you had any awkward experiences with these pre-raise meetings?

Imagine you receive a pre-emptive offer from a VC. You weren’t (yet) fundraising, and yet this VC offers you a term sheet.

You should be elated, right?

Definitely pat yourself on the back. But hold your horses, don’t necessarily sign away.

Let me put you in the shoes of two real founders I know who received pre-emptive offers from VCs to explain the problems you might encounter.

Before you read on, try to guess in your head the problems that both of these founders encountered with their pre-emptive offers.

Ready?

Okay, so Founder 1 encountered a due diligence problem, and a bit of a “was this the wrong partner for us” problem. Because they were raising a Series A, their company already had a couple dozen employees and about 5 years of operating history. So it was well-beyond idea stage, where due diligence is incredibly light.

What happened was they signed the term sheet and then entered the due diligence phase with the VC. This VC asked for 50+ documents, and the founders had an “oh shi**” moment, as they realized many of these documents they either did not have prepared, or would need to have lots of conversations to go get. So due diligence dragged on for nearly 4 months. What was supposed to be a quick, pre-emptive offer instead turned into a slow-moving deal.

Additionally, this VC ended up not being that helpful as part of the board. The founder couldn’t help but think that they had rushed the process, and perhaps ended up with the wrong partner.

Then for Founder 2, their problems were completely different. Their due diligence, because they were raising for a Seed, was pretty straight forward. But they just finished the round feeling a lot of “what if” emotions. They felt “fine” about their VC, but they think they had jumped the gun too much. Unlike Founder 1, Founder 2 was almost ready to kick off with VCs - they had done all the prep and intro mapping - and so they ended up wondering if they could have found better deal terms or a better VC.

Now, I will be the first one to admit there’s an element of “the grass is greener over there” thinking going on. But there are also several kernels of truth in here. And likely had these founders just run a proper process, they would have ended up in a better place.

Okay, but I’m not here to tell you that all pre-emptive offers are bad. Let me introduce you to Founder 3.

This founder had a large seed of $12M pre-empted by a Tier 1 VC. They signed the term sheet, got through due diligence quickly, and are happy with their VC.

The key difference? They had gotten to know this VC over the past 18 months. They were on a texting relationship, had met multiple times in person, and they believe this VC would be a great partner in the business. Additionally, several portfolio founders had vouched for this VC over the past 18 months. So when this founder told this VC they were thinking about raising, the VC pre-empted them. And it was a happy marriage.

So if a VC you trust gives you a strong deal, and you have your due diligence ducks in a row, then taking the deal can save you significant time and energy - so you can get back to building and selling sooner.

So if you’re not ready to say yes to a pre-emptive offer, how should you say no?

Here’s my recommendation:

You likely wouldn’t marry someone after just meeting them for the first time.

And while picking a VC is not nearly as important as marriage, it is a decision you’ll be stuck with for 7-10+ years if your company does well.

Yet founders routinely sign up for a partnership with a VC after just briefly meeting them, because they received a pre-emptive offer.

So founders, be careful when it comes to accepting a pre-emptive offer. Whether you decide “not now” or “yes,” make sure whatever decision you make will allow you to say “I’m proud of the raise I ran.”

You’ve got this, founders.

Enjoyed this newsletter? Forward it to a friend - when they sign up, I’ll send them my 127 pitch decks from Tier 1 raises.

Are you a founder who wants to run your best fundraise? I’ve helped 60+ founders raise over $270M - here’s how we can work together.