How I raised $350,000

I recently raised $350,000 USD pre-idea to accelerate my fledgeling startup. Here's how I did it.

I recently raised $350,000 USD to fuel and accelerate my startup work. This post covers how I did it and what I learned.

👋🏼 Hi there, I’m Lachlan. I’m an entrepreneur at the very beginning of my startup journey. For the last seven years, I’ve worked as a product manager at LinkedIn and Spotify. 2 times a month I share a post on what I’m learning. If you’d like to receive those posts, feel free to subscribe for free below.

Why I wanted to raise money

Last July I quit my job as a Senior Product Manager at Spotify to travel and figure out what I wanted to do next. After considering a few options, I decided to start a company and move to London.

I looked into startup accelerators, incubators, Entrepreneur in Residences, and venture capital firms. In the end, I chose to take checks from two early-stage venture capital firms.

Below I share five reflections on my time fundraising.

[1] There are several ways to raise capital. All have pros and cons.

To learn about what options existed and their pros and cons, I chatted with founder friends, investor friends, and AI friends (Claude, Perplexity, ChatGPT).

Here’s a 10,000 ft overview of the options I considered.

Other ways to raise money I didn’t look into: government grants, solo GPs, venture studio, crowdfunding, bank loans.

Here’s a more detailed guide. Fun fact: this guide was generated entirely by Google’s Gemini with Deep Research by Ethan Mollick, one of my favorite writers on AI.

I was initially most interested in incubators and accelerators in London like Entrepreneur First that took folks without an idea or team. I also saw them as a way to receive capital and gain a founder community.

Then I got more interested in Entrepreneur in Residence programs because I found one that offered me non-dilutive capital. Ultimately, I chose to take checks from two venture capital firms because I really connected with folks at both firms and they offered me very founder-friendly terms.

[2] Talking to founders + LLMs is the best way to learn about fundraising

In all cases above, I learned about these opportunities through a combination of Google, Claude, and asking friends for advice. Then, once I familiarized myself with each program, I got a warm introduction through my network to talk to someone who worked in that program to see if there might be a fit.

Throughout, I found talking to founders enormously helpful. The founders I chatted with gave me the most helpful, raw, unfiltered advice on if and how to raise money.

Meanwhile, LLMs (in my case ChatGPT, Claude, and Perplexity) answered all my jargon and math questions with infinite patience. I think I asked ChatGPT to explain the math for equity impact of discount rates five times.

Protip: set Claude to “Concise” writing style to get more succinct answers.

[3] Early on, investors are betting on you

I haven’t chosen a problem, solution, or audience. I don’t have a co-founder. I have not successfully built a major company already. I have no current or past startup work for a potential investor to evaluate me on.

That means investors decide whether or not to invest based on whether or not they believe I am a good bet.

I asked one of my investor’s how he evaluates founders in my position and he shared the following:

“At the pre-seed, it’s before any material proof (as in your case, pre-deck, too!). So 95% of the decision making is behind you as a founder.

The earlier you are in your startup, the more it’s a bet on the founder than metrics or traction.”

My general advice, based on what’s worked for me, is to prepare for these moments long before they arrive. The reason I was able to raise was not because of some Brilliant Fundraising Hack They Don’t Want You to Know About. It’s because for the last decade I’ve strived to do good work, treated people well, and humbly shared what I’ve learned along the way.

Protip: if you decide to share what you’re learning publicly, do so on a platform and in a format you like. It’s a lot of work and, if you don’t like doing it, it’ll be really hard to make yourself keep going. Especially given at the beginning you’ll likely get very little external validation.

[4] Use your advantages

I have the “right” pedigree to raise venture money. I studied computer science and philosophy at Stanford and worked as a product manager at LinkedIn and Spotify. I’m tall, white, and speak with confidence.

These are advantages. I’ve earned some of them… I’m smart, I’ve worked hard, and I’ve generally treated people well. At the same time, I got really lucky: I was born in the United States and raised by loving, highly-educated upper-middle class parents. If I were “smart”, “worked hard”, “treated people well”, and was born in a poor country I would have very few of the opportunities I’ve had.

That I’ve worked hard and that I’ve been lucky are both true.

As I see it, I can make the most of the opportunities I’ve been given or I can… not.

I choose the former. And, as I go, I can be honest about my earned and unearned advantages and commit to making the world more fair and just.

[5] Know your worth

It’s a bit crazy to me that smart people have entrusted me with $350,000 USD.

Perhaps unwisely, I expressed this to one of my investors before we had signed the terms. She told me she believed in me, and that she understood the risks.

Friends of mine have founded, operated, and sold companies for tens of millions of dollars. I have done none of these things.

On the other hand, I do know a thing or two. I’ve built products for hundreds of millions of people at LinkedIn and Spotify: at LinkedIn my immediate team and I launched the LinkedIn Newsletter content type which now has over 500 million subscriptions worldwide; at Spotify my immediate team and I designed and developed Spotify’s most robust listening data experience ever which was used by over 700,000 people in its first two weeks post launch.

Meanwhile, I’m old enough to know some stuff but young enough to not have real adult responsibilities like kids and a mortgage. (And fortunate enough to not have ailing parents I need to take care of.)

Time will tell if I succeed in creating a meaningful company or not. But that’s a pretty solid resume — I’d bet on me. I guess my advice for aspiring founders out there is to ~*believe in yourself~*.

You’ll never be totally ready. There will never be a perfect time. You will always have doubts. Start now, or else risk regretting having never tried.

[bonus] Be sure you want to do this

I think part of the reason I was able to raise and why I feel good now having raised is because I have deep conviction that this path is what I want right now.

I understand – as best I can having not done it – the reasons not to start a company and not to raise money. Startups are all-consuming and usually fail. I could make more money as a product manager in big tech. Starting next week, I’ll be living in a new city without an established community or partner. Raising VC money means getting on the “vc treadmill”.

Nonetheless, I’m excited and committed. I see starting a company as an incredible way to learn and grow, have a high-degree of autonomy, and build something with extraordinary upside. In time, it’s also a way to work with brilliant, inspiring people.

Also, I love that you can’t fake success in startups. At least not long term. You build something people want or you don’t.

Once you take someone’s money, you’re in it. I’m happy I took the time to be sure this is what I want.

So there you have it, the starting gun for my next professional chapter. Hope you got something out of this and you’re 2025 is off to a good start.

Until next time,

Lachlan

💥 Fun fact: I shared my first investor update this week! I’m sending it to a separate, private list. If you’re an investor or a friend and are interested in receiving it, reply to this email and I’ll share it with you!

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Special thanks to Gianfranco Filice, Liza Gurtin, Jacklyn Oliver, and Wulfie Bain for giving me feedback on earlier versions of this post.

Dec 25, 2024 with my family