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Fundraising Holiday Blues

Jason Yeh
December 7, 2021
47
 MIN
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December 7, 2021
47
 MIN

Fundraising Holiday Blues

Fundraising for software that supports charitable giving started off as a challenge for Grapevine CEO Emily Rasmussen. After unlocking the fundraising story that would gain traction, she ran into another challenge. The year-end holidays disrupted her momentum and threatened to sabotage an exciting round. Emily shares how she weathered the storm and the important lessons she learned about the impact of calendar timing when raising.

Episode Summary

Fundraising for software that supports charitable giving started off as a challenge for Grapevine CEO Emily Rasmussen. After unlocking the fundraising story that would gain traction, she ran into another challenge. The year-end holidays disrupted her momentum and threatened to sabotage an exciting round. Emily shares how she weathered the storm and the important lessons she learned about the impact of calendar timing when raising.

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Episode Transcript

[00:00:00] Emily Rasmussen: This investor did end up ghosting us disappeared. We couldn't close the round without, you know, filling that extra gap. And then it was the holiday and everyone was offline. And I think there was a real moment there where it all could have just gone away.

[00:00:21] Jason Yeh: This is funded a show where founders who raised millions in venture capital share the gritty. Of what it actually took to get that money in the bank. I'm Jason Yang, not too long ago. I was trying to get my ideas funded. And back in the day, I was a VC listening to founders, pitch me for money. Halloween is supposed to be the spookiest holiday, right.

But if you're a founder, any holiday break can be harrowing because deals have a way of dying. During those times today, we're going to get into why, why fundraising has a natural cycle. What times of the year have been best to close deals and which months are dead zones? Two months used to be the yardstick for a fast race, but now two weeks is the new industry standard for a quick deal.

And it's getting even shorter in the current crazy. One way to explain that trend is that pressure drives the fundraising machine. Founders are giving investors less time to think over deals because investor competition is at an all time high meaning investors know if they don't act fast, they could lose out on a deal when the heat is on in a process, founders have the upper hand, but if a process stalls, as it normally does during the holidays, suddenly the roles reversed.

Which is what Emily Rasmussen, founder of grapevine learned when she tried to raise money for her group of charitable giving platform right before Christmas. But first we started with what made her take a risk on founding grapevine in the first place, her interest in philanthropy and mission-based businesses.

[00:02:05] Emily Rasmussen: Just growing up, I've always been interested in just mission driven, work and organizations. And so I think it's just kind of been there for a long time. Um, and then I actually, so in a prior life, I was a ballet dancer. Um, and so was doing that professionally and decided. Pretty big switch when nine 11 happened and just felt like I'd always been interested in doing something, um, more international and UN UN I thought more in the diplomatic space.

So decided that that was the right time to make a switch and explore that space. So went to school and to college and spent some time exploring economic development work. Diplomatic work spent a little time at the UN. And thought that I really want it to be in that diplomatic world. But when I was at the UN, I actually learned about microfinance and just was really inspired by this model of community-based and of giving and investing in local communities to help, um, provide opportunities for people all over the world that didn't necessarily have access to resources, um, in the same.

That other communities did. So I thought that was a really interesting model and decided I wanted to explore that a bit more, spend a couple of years after that in India, helping to build a microfinance program there. And at that time, Kiva was coming onto the scene and really taking off, which is a kind of tech enabled, um, uh, platform for microfinance.

And then Kickstarter was about to launch. And so it was just, it was this kind of early stage of crowdfunding that was really inspiring. It felt like tech was increasing access, um, to this model that I was, uh, building on the ground, you know, in India. And it felt like, wow, if we could, if we could do this, if we can open up this opportunity globally through technology, that would be amazing to unlock additional resources and help get those resources to

[00:04:05] Jason Yeh: communities.

So I didn't know the full picture of the story, but it sounds like you have. Been exposed and deep in sort of the impact world for a number of years. Right. And sometimes. When I see the background of working in impact and, you know, international experience, uh, the transition to going to business school is about like, how can you be a better manager?

How can you be better at like, increasing the impact that you have? And so you ended up going to Harvard business school. Was that sort of the background or thought process you had when, when you first thought, Hey, business would be an interesting path for me. Cause not everyone from that world decides to go down the sort of.

[00:04:50] Emily Rasmussen: Sure. I mean, it, it certainly was, uh, I wasn't sure that it was the right. So, you know, I, I definitely was thinking about it as an option, but then wondering if it was the right option for me, I think ultimately what ended up happening is I joined a consulting firm here in New York that was building microfinance programs globally.

And as part of that work, the founder of that firm was an HBS. And so I got to work closely with her. And then through that work, we actually engaged groups of HBS and other business school students to go do field research with us and compile those learnings into recommendations for company. Around the world.

And so I got to participate in a bunch of these, these trips and work with a bunch of these MBA students and just really saw how that skillset was super valuable and yeah, and how it could really be applied to the sector that I cared about. So that for me, made it really clear that this was something worth doing.

And I think the other thing for me was just that I, I still felt really passionate about this technology coming into this space of community-based finance, but I didn't exactly know what that meant. I didn't know how to think about something and I didn't see the thing that I like wanted to go do in the world yet.

So it wasn't like, oh, I see that company. Or I see that job. I'm going to go after that. What's the path. It was more like, Uh, morphous than that and an idea, and I felt like I needed more skills and resources to help me think about how to create something. Um, that was the thing that I wanted

[00:06:25] Jason Yeh: to do. I wonder when you started your company, did you think this was going to be a venture backed company, something that you wanted to scale?

You know, I

[00:06:35] Emily Rasmussen: think from the beginning I wanted to build a venture scalable business. That was part of. My own personal interest. I think there was a question whether or not that. Was something that I could do in this space that would make sense. Right. And so I don't think I even knew the question to that.

I think that was part of the exploration in the early days. Is there something that we can build that would be meaningful in this space? Yes. I knew that there was, is there a venture scalable business that I could build? Yes. I knew that there was, are these two things, you know, possible in one entity that was.

[00:07:15] Jason Yeh: I think you raised a little bit of money to start doing exploration work. Right. But at some point you went out to raise your formal pre-seed, which I know you raised sometime last year. Do you remember that period of time and that exploit.

[00:07:28] Emily Rasmussen: Yeah. So I feel like there were hints along the way, and it just felt different than the earlier days.

And it started to feel like, okay, we're onto something. And basically when we first set out, we were focused on this collaborative giving concept, but we thought that the collaboration should happen between experts and donors. And we really explored that and we kept trying to get that to work. And we got so much positive feedback from people because especially early days, people.

You to succeed. And if you're trying to do something that makes a difference, of course they do, but it wasn't actually translating into engagement, into donations, into, you know, the metrics that we cared about. But what we were hearing is that donors wanted to collaborate more with each other as well.

And that was something that we'd always thought that we would want to explore as part of this, but it didn't feel like the thing, but we, so then we pivoted and we started focusing more on that and. Fairly early days of that actually a few giving circles, um, these like offline community groups that were pooling donations and trying to collaborate together, discovered us and reached out.

And so that was the earliest sign that okay. They're reaching out to us and telling us that what we're building. Resonates and they need it. And also telling us, can you also build this, this and this? And so it started to become a much more clear path of what we could build that would be useful for someone that was already trying to do this.

And so that was an early sign that really led us to, okay. Let's just focus on this community. And then what happened is, as we kept doing that, we pulled in a few other people. Um, but we officially launched publicly on our site in March, March 31st, 2020. Crazy timing looking back on it. Yeah, we, we thought.

You know, this COVID thing is kind of becoming a thing. Maybe we should pause and push our official launch back through a couple of weeks. So glad we did not end up doing that. We'd still be waiting, but yeah. So then we launched and it was just, it was crazy. They had a donation pings set up. So every time a donation comes in, it pings us on slack.

So we always kind of had a sense of what's going on. Suddenly my phone was paying me like all through the night. Keeping me up. And, um, it was just, we had so much inbound traffic. We didn't know where it was all coming from. And it was just a really kind of crazy, exciting wild time. Um, so that's when, and we had, we had just kinda, you know, COVID had just had, I just gone back to California to be with family and it had just sort of been this really interesting moment with the company where we went while we might be really scaling back and kind of slowing down here, given everything that's going on in the.

And our own runway, but then this thing just started taking off. And so we were running as fast as we could.

[00:10:18] Jason Yeh: As you started thinking about talking to investors like institutional formal investors about putting venture capital dollars into a company like grapevine, what does it feel like to be. Working in the nonprofit space, charitable giving or telling the story that you're going to be a big business.

Is that something that you had to wrap your own head around or was it like an obvious thing that everyone is running into, like wanting to kind of hear your commentary around that part of the story?

[00:10:47] Emily Rasmussen: It's definitely a challenge. Um, an extra layer to the fundraising challenge. I should say for me, it was always clear that there's an opportunity.

To build a really big business and that these things are not in conflict. That actually the whole way that we've built this business has been around the bigger we grow, the more impact we have, right. And the more money we can make. And so it's, it's not in conflict and like many spaces, it has been built for a very small narrow segment of the population, you know?

So unsurprisingly. Largely models in the philanthropic space have been built to support white, wealthy men and how they like to give. And so there's a huge portion of the population, both existing donor population and potential donor population that, that misses. So for me, it was always obvious. There is an opportunity.

Far less obvious, I think, to, to VCs. So making that case has been interesting and it usually starts with no, we're not a non-profit yes, we are a for-profit company. I think the other thing that I've realized in the VC space that was kind of difficult for us early on is that there had been some significant investment, um, sort of a previous phase of, of venture investing in a few companies, uh, where people.

Put a lot of money into causes, um, was one and there were a couple of others. And so, you know, I think those were largely, they were just very different place. And I think people were a little bit, um, skiddish because of that. Um, what I do think has happened though is the nonprofit industry is I think venture investors have had to sort of look to other spaces and.

Um, just expand, I think their, their way of thinking about what is investible and where is their opportunity? Um, I think they have started to look at the nonprofit sector again. And so when I went out to fundraise, um, this time. I had talked to some investors a couple years prior to this, I was thinking about going into this sector and it was very cool.

Um, but these conversations, I found people to be much more curious and open, even if not like fully, you know, understanding the opportunity yet.

[00:13:01] Jason Yeh: I think the difficulty that you have with the underlying industry that you serve, just having the headline of nonprofit, like is, is bit jarring or not jarring.

If you don't think about this space, your mind wouldn't necessarily go to, oh, it's a big industry. Your mind goes to it. It's not about making money. And my expectation is that you're, you were servicing such a small, small industry and it says nonprofit, but that just isn't the case. And it's like, you've obviously become good at like quickly turning heads around, like what you're doing, you know, you know, the numbers that they're out and in terms of where you went from there.

When you thought about preparing, who were the types of investors that you went after, did you think I have to go after a specific type of investor? Or were you challenging yourself to say, like, I think any investor that, you know, broadly invests at this stage would be interested? Like how did you find you.

So I

[00:14:00] Emily Rasmussen: did target a couple of types of groups being a female founder. I felt okay. There are a bunch of these, uh, funds that are focused on female founders and supporting that segment. So I should add them to my list just for that fact, then being in the impact space, there are some funds that have said that they are interested in impact.

That's what they're focused on. So I wanted to make sure to include those, although I will note that it was more. VC funds that had an impact lens or angle than it was impact investors or impact first funds. And that's because I have found that it is quite difficult actually, to raise money from impact focused funds, especially for the work that we're doing, because we're relatively impact focus agnostic.

If you will, we're facilitating donations to all different types of causes and a lot of impact investors have very specific angles and what they're trying to accomplish. And. You know, verticals of impact. So anyway, so I did not include those. Um, but then otherwise I was just who, who's a great pre-seed early stage investor.

I just want all of those generalist investors on the list and we'll see from there and building a big.

[00:15:12] Jason Yeh: It sounds like you went through an evolution that I see a lot where it's like, my business is very narrowly X, you know? And so maybe I should only talk to investors that have done that kind of deal before, but really the challenge is can you make your story really exciting to any type of investor that likes great businesses, which I think a lot of people miss their first time.

[00:15:37] Emily Rasmussen: Also where do you fit in their portfolio? Because if someone is focused on an area too much, right, then obviously they might have a competitive company in their portfolio. And so I did find some traction in making the case to more generalist investors that seem to say, Hey, you need to think about us, not as this nonprofit play, but as this is an under-invested space.

Because people have been skittish about it. And so if you're smart and you're looking for an opportunity, then this is a good space for you to be looking at. And you obviously don't have anything in this space. Yeah. I mean, I think it was trying to also just find it, like, create that bigger list and educate those investors and make the case for how this fits for them or should.

[00:16:29] Jason Yeh: An investor goes from hot to cold just as life moves indoors for the holidays.

I spend most of my days, one-on-one with entrepreneurs, helping them understand strategies that make a difference in fundraising. Some things vary from founder to founder because not everyone's story is the same, one thing I'm super consistent about no matter who the founder is, making sure they send their decks and materials using a document sharing.

And for that, I always recommend DocSend DocSend lets you know, what's happening with your deck after you send it along with real-time analytics and notifications, did the VCs actually open it? What slides did they spend the most time on? And if you think it got shared with the wrong people or maybe you made a mistake and sent it to quickly, DocSend lets you control access and Nick updates.

Even after sending sign up for a free two week trial at docsend.com/funded that's D O C S E N d.com/funded. Okay. Back to the show.

Any like challenging times come to mind, any, any, uh, remarkably like interesting stories about the hard times. I

[00:17:49] Emily Rasmussen: think, I think it's all about the hard time

[00:17:52] Jason Yeh: net life in general. I mean, it's your first time fundraising and doing a formal institutional round, correct? That's right. Yeah. What was the worst experience you had, especially in those early.

[00:18:05] Emily Rasmussen: Uh, so there were a couple, couple of moments. I would say that that's sort of the jump out one. I felt like our fundraise was moving along pretty well. And, and, um, we were getting some traction. Um, and we did end up getting an offer that was great and came through kind of in a reasonable time. So it felt like, oh, wow.

We're, you know, we're moving along. We got term sheet, but then we kept running into these challenges at the end of year, honestly, with timing and holidays and things. And so just some little hiccups there that made me nervous, but it seemed like everything was still coming together and we hit our. Uh, the amount that we wanted to hit, but then suddenly like this last investor, just there, there kept being another, like, reason that it wasn't moving forward or another call that you needed to have, or another thing that needed to happen.

And it just started to feel like, okay, I felt like this was all wrapped up. There was a commitment there, a verbal commitment. Um, but it suddenly started to feel like this might not be wrapped up. And here we are heading into the end of the year. And if we don't get this done before the holidays, it felt like everything was going to maybe just go away.

Um,

[00:19:19] Jason Yeh: because time kills deals. Right?

[00:19:21] Emily Rasmussen: Right. Yeah. You were the one who told me that deals need momentum. So, yeah, so that was a moment where I started to get really nervous thought we had it wrapped up and we, we turned out, we did not, uh, this investor did and. Ghosting us disappeared. We couldn't close the round without filling that extra gap.

And then it was the holiday and everyone was offline. And so, you know, I think there was a real moment there where it all could have just gone away, but then. After after the holidays started, the new year kind of went back out to some of the people who demonstrated interest, but, uh, that we were moving a little bit too quickly for there at the end of the year.

And there was still interest. There was able to kind of reframe the conversation to not be, uh, no, we failed to close around at the end of the last year. Like I told you, we were going to, and um, you said we decided to extend. And it actually turned out to be a good thing ultimately for us one, because that investor is not part of our, our, um, uh, group at this point.

And I'm, I'm happy for that learned a lot during that process, but then also it opened us up to this other time where suddenly there was more money in the market. It seemed there was more energy and momentum. Things were moving quickly. And before you knew it, we were oversubscribed. And then we were.

Going through this amazing phase of trying to decide who to let in and how much money to take and how much dilution we were open to and all of that good, you know, stuff that was still a challenge, but a much better challenge than just trying to close around. And

[00:20:55] Jason Yeh: so many times fundraising it's, you're either dying of third.

Or you're drowning. There's like, no, in-between, you know what I hear like, oh my God, if I could just do it. And then all of a sudden you have to decide who gets in. I love it when founders share these stories, because when it, when they happen to people, it like, it feels like I can't believe this is happening to me.

Like I'm the only person that would go through this. But if I were to summarize what you shared, it was, you were executing the fundraise the way you should. And. People were committing. And you were about to get to that final number where you could close everything up. And for one reason or another, even though you had a verbal commit, someone was in rounded out the round, they start dragging their feet.

They start being unresponsive and your spidey sense starts tingling of, oh no, this is not good. And you're right. You know, it's not good. The more an investor is given time to think, you know, they they're just given so much time. Decide why they shouldn't do deals, time kills deals, momentum gets them done.

And what you're telling me is that you ran into the end of the year when everything closes down, especially in this period of time, it's like holiday season. And if we agree that investing is all about momentum and signaling and what the market believes is happening. You had to go tell all the investors that said they're committing to like, make sure that they stay committed and like you needed extra time to close this out and go out and try to find more money from people that knew you had been raising before.

And it's like this game of making sure everyone knows now it's not because. Got cold feet because maybe they think something's bad. It's because there's new opportunity and oh my gosh. Like, you know, we want actually to bring more people in. And so, um, I just wanted to reframe that because that is a, it's a really challenging thing to go through and for you to come out, the other side, the way you have is, is great to hear.

And I think it's a good transition into my preferred question or my favorite question, which is, do you remember. When the final check came in and when you, like, you knew it was done, like, was there a moment that you realized, like you had done it, you had.

[00:23:09] Emily Rasmussen: I think it was more a feeling of this could be it, you know, because we still had money on the sidelines that wanted it.

And there was a question of, are we going to accept some extra money? And we had some strategics that, you know, we, we really wanted on board and we were trying to figure out how to make it work. But, um, there was definitely that moment where we got that last big, uh, transfer of funds and I saw them in the bank account and I was just like, it was just relief.

It did at that point, it didn't matter if anything else came through, if anything. You know, we never even talked to anyone else that we had been talking to. It was just, we were good and we had the money we needed and we could, we

[00:23:46] Jason Yeh: could build where were you? You didn't remember? I

[00:23:50] Emily Rasmussen: was at my mom's place, was staying with her at the time during COVID was in the living room.

And I was just, I remember I was. Refreshing the, uh, my bank account on a on line. And, uh, yeah, cause they said that they were transferring the money and, and this last big check just came in so quickly. I pitched them on a Friday morning, first pitch on a Friday morning, it had been introduced to them via email.

Earlier that week pitch went well. They invited me to their partner meetings. On Monday, two days later, pitch the partners on Monday and I had an offer Monday afternoon, and then we negotiated a bit back and forth over the next couple of days. And then they had the money to me, I think by the end of that week.

So all happened so fast, but it kind of felt amazing. And also like this, this can't be possible. Yeah, it was just too good to be true so quickly and coming together. And anyway, so once I finally saw the money in the account, I believed it. Yeah.

[00:24:49] Jason Yeh: And how long did that feeling of like amazing. This is going to be great last, like the next six months or the next six minutes.

[00:24:57] Emily Rasmussen: Oh yeah. Well of course then it just opens up all the other problems. Okay. You know, what's next? Where do we go from there? Right now, but I think more than six minutes, it had been a long, it had been a long road. It was a relief. I think it was at least a good weekend, or it was just like, can take this off our plate now.

And

[00:25:14] Jason Yeh: briefly, one thing that I wanted to pull out of there, which is an extreme example, but the speed at which that, that check came in of introduction to great meeting, to quick diligence and negotiating the money, I think gives you a really pure. Window into what actual investor interest looks like. If you think this is something I wanted to pull out for other people, um, which is this idea that early on when you're fundraising, a lot of people might've said, oh, like Emily, like, I like this.

This is great. And honestly, even that, that one investor that kind of verbally kind of verbally committed. Do you feel like you have a better filter for. Knowing when a conversation is actually like, you know, blowing smoke up your ass and trying to be nice or actual interest is a, is there a line drawn in the sand now in your head?

Yes.

[00:26:12] Emily Rasmussen: And this is something where I used to think, oh, if I follow up right away, that will make a difference. You know, all these little things that you stress about in the process, if only I'd done this. And there are several moments too, where I pushed some investors, cause I said, oh, We ha we only have this much space and we need an answer by next week and then they came back.

I'm sorry, it's just too fast. We're just not going to have time. And I really. I w I felt that maybe I'd mishandled that. Yeah. I thought maybe I'd pushed them too hard. I pushed them out. And then now having gone through this, the couple of, um, the couple of big investors that really came in, just moved so quickly and definitively, it was never a question to me whether they were interested.

Um, they always made it clear that they were interested and they were always the ones pushing forward for the next conversation or the next step. Yeah, very big difference.

[00:27:03] Jason Yeh: Awesome. Well, look, I think the path that you went through and I really. I have enjoyed watching the growth of grapevine because I know based on the stories I've heard about how big of an opportunity this is as a real business, but the fact that you are building the tool set to make giving happen so much more easily is such a cool thing to see.

Not everyone is, is doing NFTs. Art-based stuff, but like we're working on technology that, that helps give back so exciting to hear that and see that happen. I wondered if there were a few things that you picked up on this last fundraise that you would share with a younger version of yourself to make sure that, you know, Emily from 2019, get coming, getting ready to fundraise would be better equipped and ready to take on the fundraising world.

Um, any, any pieces of that?

[00:27:56] Emily Rasmussen: Well, I had some great pieces of advice going into it that I I'm glad that I had, you know, one is just run a process, um, that it's really a game changer and really, um, trying to keep things, uh, as tightly run as possible. So. You don't have enough time to stress about each per individual meeting and you're just moving quickly and there's a scarcity in your time and energy that requires you to be efficient and thus the investors to feel that and to be efficient.

I think that was really helpful advice. Another piece of advice that I think really proved out for me, it was just that this is a conviction. And so at the end of the day, you just need to, you know, to go in and be it's, it's all about confidence and, and projecting that. And, um, I think it can be really hard to keep that up because every day you're told no and all the reasons why, what you're doing, isn't going to work.

And so even those of us, with the most confidence, it can be shaken of it through the process. But. One thing that I did start to do, um, that I found very helpful and I guess would be a piece of advice I'll give myself, um, or would have given myself to do from the start is just a little bit of like journaling in the morning on to recommit to the conviction and why this is going to work, why this makes sense, and also setting a bit of an intention about how you intend to show up that day, um, and how you're going to be in those meetings.

Uh, you kind of, I think have to play a role sometimes when you're not feeling it, you still have to.

[00:29:35] Jason Yeh: That was my conversation with Emily Rasmussen, the founder of grapevine, a SAS platform powering the future of group-based charitable giving.

When we come back, my producer, Olivia searches for a new apartment, and I explained why her hunt for the perfect spot is not unlike an investor searching for the perfect deal, where a little time to think things over can turn a yes into a now.

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[00:31:23] Olivia: Okay. So it is the holidays. And I was wondering today, if we could talk about this cycle of fundraising because you and Emily mentioned that. A lot of deals die around this time of year. And that kind of made me wonder, well, is there a time when they usually flourish? And so I was wondering if you could just kind of walk me through if the holidays is when things normally die.

Is there a period when things normally flourish or

[00:31:55] Jason Yeh: not? I'm going essentially historically any large vacation time. So end of year, uh, Christmas, new years. We're really bad times to fundraise because there's this concept of momentum and its impact on fundraising because. As you're raising money. If you're doing it successfully, you're getting people excited and they're reacting very quickly to what's around them.

They're reacting to the last conversation they had with you. They're reacting to a diligence call that they had, um, the reacting to maybe a news article that was written about you. And as that momentum is pushing them, they're going to try to make a decision to invest. The flip side of that is. If anything pass' them or allows them to just live with their own thoughts and think about all the ways that a deal or a company could fail.

Just the more time you give an investor to do that, the more opportunities they're going to have to say, you know what, like I have other deals that might be better. And I thought of something that might not be grit. So historically anything that would put. An investor away from looking at a deal would be a bad time to raise.

So for Emily, she was going through these conversations in December. Like we are. And as they were hitting the Christmas and end of your season, investors were stepping away to be with their families to travel, et cetera. Now, the flip side of that is when investors come back from these vacations, they're energized, they're ready to look at deals and they want to start like actually getting their teeth into things.

So the flip side would be anytime after a down period or a vacation period was a great time to raise.

[00:33:42] Olivia: Spring and fall done.

[00:33:43] Jason Yeh: Yeah. Spring and fall are great. I'm actually coming back from the new years, uh, is great. So sort of mid January is when people start picking up momentum. This is a pretty

[00:33:52] Olivia: granular question, but why is there less momentum during these summer vacation periods?

Is it just that, I guess maybe people are entering negotiations and like if the investor. Starts to sit on a counter offer or something for too long. Um, it just maybe like loses its appeal. Like, is it because a lot of it may be rests on risk and impulse and just like impulsively being like yes. Or is it also that this whole industry.

Of like news articles and like water cooler conversation and like, uh, networking emails and stuff. It's kind of out of commission. Like help me explain on or help me understand on a more granular level where the momentum is dying. Sure.

[00:34:48] Jason Yeh: Um, I think it's probably more, the first thing you mentioned, which is the fact that investing is a very like.

Gut feeling based thing. So even with numbers, I say this a lot, even if you're able to show me numbers, none of those numbers can be extrapolated to infinity. They're just sort of. Um, specific points in a story. And it's up to me as an investor to decide whether or not I think that whole story makes sense.

And so let's say the cadence goes like this. Olivia, you get introduced to me on a Monday. Uh, we have our first conversation on a Wednesday. I make a call to your last boss on a Friday. We have a second call. On the week after our first call on the next Monday, and I'm getting excited. I'm like, okay. You know, she tells a great story and we had one great call.

You know, there are some questions, but I feel like other people are looking at the deal too. Like there's a lot of interest around this. I need to make a decision.

[00:35:45] Olivia: Oh. So it's like

[00:35:46] Jason Yeh: competition. Yup. And pressure. And then let's say all this is happening and it's December 20. And I'm like, I'm sorry, Olivia. I have to leave with my family, uh, to my in-laws in upstate New York.

We're going to have to pick up the conversation again in the new year. Now I've taken a step away from considering you Olivia. Uh, in the meantime, other people have been sending me deals and then I'm like, you know what? I was like a little bit concerned about that. One thing she said, About the market. I kind of don't really agree with that.

And there's just more time to stew on the reasons why you wouldn't do a deal. Um, so if that timing lines up to break the momentum. Come the new year, we have to talk again. And you're like, all right, are we still interested by the way? Like, did anyone else do the deal, all that momentum, all that pressure, all that perceived interest from other parties is gone.

And now we have to start all over again. Whereas if that timeline had started, say January 15th and we're able to keep going and keep going. And then we had our second meeting and then you, as the entrepreneur were able to say, I've really enjoyed talking to you, Jason and your firm. We're going to make decisions then next week, we'd love to know.

Um, if we want to continue this conversation and get serious about a term sheet, then it's like, I thought about all these things, new, you know, I love the story I love to live here. Let's do this. Like that's actually how investing happens. Um, so we always try to maintain that pressure and momentum and holidays or any sort of unplanned trips or things can, that can break that

[00:37:30] Olivia: so interesting because it really reminds me of my apartment search right now.

As you know, I took a new job and I'm going to be moving. To D C actually, I don't know if you knew that. I think you knew. Yeah, I'm moving.

[00:37:47] Jason Yeh: I mean, I knew you got the new job and I was excited about this conversation to hear about that. You know, I'm originally from Virginia and DC, so I can help you think about.

[00:37:58] Olivia: Yeah, I actually, I should show you these apartments I'm thinking about, but it reminds me a lot of my apartment search because this is obviously happening in the same season. And it's interesting because there's this one apartment that I found that is really close to where my new office is going to be.

I was like ready to act immediately when I saw it. I thought it was perfect. And then kind of like Thanksgiving happened and it's been a few days and now I kind of just. I started to kind of look at what else was out there. And I'm like, is it that good of a deal? I don't know, perspective, a little bit of perspective has really shaken it up.

And also I'm keenly aware that as a renter, I have a lot of leverage right now because it is, it's a dead period, I guess, for a lot of things like it's a dead period. Rentals, I guess. And so I just, I'm kind of like maybe, you know, I could get a nicer apartment and then just like negotiate down the rent.

So it really has

[00:39:01] Jason Yeh: Olivia let's keep going. Let's keep going guys analogy because. I want to pull something else out there. First of all, say that the fundraising dynamic is so similar to a lot of sales, competitive dynamics. They have different nuances, but a lot of the core dynamics are the same. So let's talk about this apartment search and the first apartment you saw, or this apartment you're talking about, you thought it was actually kind of interesting.

Right? And you were excited about it. You almost did it super excited. Yeah. What if this happened? What if, as you're thinking about doing it, a friend of yours. Who lives in DC goes and looks at the listing. Right. And she says, huh, I love that neighborhood. And this is the, you know, that block that is on it's on, is up and coming.

A lot of people want to move there. I think that looks great. Yeah. She doesn't even actually go see the place. You just kind of looks at the details and says a couple of things to you. How's that going to impact you when you think about whether or not it's an apartment for you?

[00:40:03] Olivia: Obviously I think that.

Like seal the deal, which, okay. I'm so sorry to interrupt your flow, but if I'm going to be fully honest and I didn't really piece this together, but what obviously what actually happened is that I basically had time to do due diligence. Like I was ready to. Frickin sign a lease. And then the owner of the apartment did something really nice, which is that she said, would you want to talk to the current tenant?

And I did. And I feel like this might've come up on this podcast before I'm really afraid of cockroaches. And so I asked, I talked to the current tenant and I was like, are there any bugs? And she was like, I mean, sometimes I see roaches and it was kind of a problem over the summer. Now that I've done this, like had time to do this background check and kind of like am totally re-evaluating it.

Whereas initially, just based on the pictures, I was like, totally ready to go for it. Just over like a bird's eye view, snapshot.

[00:41:08] Jason Yeh: This also is a. Analogous point to make, because I mean, this is perfect. So let me just say this. The cockroach problem you're talking about is something that exists in a lot of apartments, right?

And it's actually a very solvable problem. Right? You get an external, you get exterminators, they treat it and it's gone. Right. And in this, in a similar vein, there are, there are small problems that like. Are not the thing that actually makes a company hugely successful or not, but it can stand out in someone's mind and be like, oh, you know, I just don't love the fact that the co-founders are married.

You know, it's like a thing that I just don't love. But there are plenty of examples of companies with married co-founders that went on to build gigantic businesses. And there are plenty of apartments that have had bug problems that have been fixed in the past, but given the opportunity to stew on these little details and hear more things, you're like, you know what, it's not perfect.

I'm going to pass. If that apartment owner, that house owner that was trying to rent to you was like, Hey, send this to any of your friends in DC, ask them what the neighborhood's like. I'm sure you're going to find out that it's, it's one of the best neighborhoods in DC right now, the best deals. Um, like a lot of people are interested right now.

I really like you, Olivia, you seem like you'd be a great renter, but we really don't have that much time. You have three days to decide. That is actually a dynamic where, okay. She's, she's adding credibility to the process by asking you to get a check from your friend. If your friend comes back and says, oh, actually love.

Oh, that that listing looks great. That neighborhood looks great. Yeah. And then she puts a deadline on you, the outcome of your apartment search. Might've been very different. So we're going down a rabbit hole, but I really think it's a great

[00:42:59] Olivia: analogy. Helpful. And it does make me wonder if that's one practical piece of advice you give founders.

Do you tell them to put a deadline on investor decisions, even if it's like a false deadline? Like just to, just because it's that it's beneficial to the

[00:43:19] Jason Yeh: dynamic a hundred percent, your deadline deadlines are really, really powerful thing. Honestly in any business engagement, because deadlines just help people prioritize.

When you're thinking about your opportunity, whether it's an investment opportunity or an ask for a piece of advice or some sort of help, you're like, Hey Olivia, can you. Give me feedback on this new podcast episode, as soon as you can, as soon as you can means something different to different people, right?

As soon as you can, could be two months from now for you. Cause I know you're busy Olivia, but if I say, Hey, Livia would love feedback on this new piece of content. If you could give me notes by Friday, that would be great. Then all of a sudden you're like, oh, okay, well now I have to think about all the things I have to do before.

And Jason has asked me for this by Friday, I'll pop this to the top within fundraising. You know, you want to be putting deadlines around people because one, you need them to be making decisions quickly. And two, you need to show that you have the ability to put a deadline because. More people are interested in this than just you.

So the timeline can't be dictated by them. There are other people ready and willing, willing, and ready to go. So, uh, it's a bit of an interesting dynamic because you know, you use the term false deadline and it's not that it's a false deadline. It's just that. It's a deadline with no teeth, right? Like if you miss the deadline, it's not like you wouldn't talk to me anymore.

Right. It's like, we've, we've put an artificial deadline out there and I want you to hold. I want to hold you to it. I want to hold the other investors to it. But if everyone went past the deadline, you'd be like, ah, you know, we, we decided to extend the deadline or allow people to continue doing their diligence.

Let's talk again. But the deadline is very powerful, very, very fast. I

[00:45:16] Olivia: have one more question, which is that you have founded two companies. Right? Okay. So let's just say like for your, I don't know, whichever, when you feel like it was more successful and like whichever term she, in, whatever round you felt like was a massive win.

Like, do you ha does one come to mind? Yep. Okay. What season was that? Like, what month was.

[00:45:42] Jason Yeh: Oh, yeah, I'm in it. So I had done, I had, I did everything. I engineered it perfectly. I started sort of warmup conversations, getting people aware of the fact that we were out there and we were thinking of fundraise fundraising right around the August period of time.

And that was, that was great because. August is at the very end of summer vacation. So this was back in 2017. So some investors are coming back, they're available for like light conversations. And then when I was like, okay, we're fundraising, we're actually fundraising. We're going to do our meetings in this week.

It was like September one. And we kind of drove to completion within a month. Um, yeah. And so I executed that, um, exactly how I would've coached any other film.

[00:46:32] Olivia: Do you tell a lot of founders that August is a good month to get started? Is that like common advice?

Yeah.

[00:46:38] Jason Yeh: You know, I think at the end of the day, what.

Dictates when you go, fundraise is more just the situation that your company is in. So it's not going to be like, Hey, let's change everything. So that we raise in January or, or August, or, you know, March right before summer vacation. But if there is flexibility in like a week or two or a month, like a lot of founders are asking, should I go fundraise now?

And like, if you have to fundraise now and go out and raise and try to close this up before Christmas vacation, before the, you know, the 19th ish. But if you have flexibility, You should hold your breath and get ready to start right when you come back from the new year break.

Thanks so much for listening. There are tons of insights that each founder recover unfunded has around startups, fundraising, and life. And we don't have time to cover it all. So if you'd like to get a free insights pack based on Emily Rasmussen from grapevine, go to funded pod.com/grapevine. If you're looking for more insights, strategies, and support around fundraising, subscribe to our weekly newsletter@fundedpod.com slash newsletter.

And find me on social I'm @jayyeh that's J A Y Y E H on almost every platform I respond to newsletter replies. Indeed. So hit me up. This episode was produced by Olivia Reingold. Hello, thanks also to John Lee from adamant ventures. Hello friends, and thanks to Emily Rasmussen from grapevine for taking time away to speak with me and for dedicating her life to building a business with such a positive impact on the world.

It's fun to see people doing well by doing good. As always, uh, one last thanks to our sponsor. DocSend the most trusted document sharing platform.

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