Venture capitalists say the market has “turned around” and founders now have the power

The way venture capitalists think about raising money can be a black box. But investors should think about their go-to-market strategy to raise their own money, as much as they think about how to find their portfolio companies a market fit.

All season on Build modewe’ve explored how founders should approach marketing, but this week we’re exploring how VC firms sell themselves to founders as trustworthy partners, and to limited partners as worthwhile investments.

Isabel Johansen spoke with Leslie Finzaig of Graham & Walker and Ross Fubini of XYZ Venture about raising their first money and how it gave them empathy for the founder’s fundraising experience.

Feinzaig got into venture capital with very few industry connections: “It was hundreds of pitches. It was raised almost entirely from individuals. We ended up with 105 LPs.” “If you don’t have a track record, what they’re investing in is you. Like basically, it’s like lifting a giant angel without a lead.”

With this outside perspective, she was able to put herself in the shoes of the call founders make before they meet with their board to practice and discuss strategy.

Likewise, Fubini encourages the leadership teams he works with to think carefully about the people they partner with. The title of his evaluation follows three basic principles: person, company, and terminology.

“You’re working with this person forever. So, it’s all about, is he fun? Do you trust him? Does he have the ability to get the deal done? It’s all about this human being,” he said.

Both VCs have noted the change from the recent bear market of 2022-2023 – where VCs held all the cards – to the current deal-eager atmosphere where founders have more power. This makes choosing the right venture capital funds that much more important, they say.

Fubini called this shift “exciting” because although both sides still need to do their due diligence and make sure they fit well together, “you can move very quickly” compared to cautious bear markets. “I think this is fun and exhilarating,” he said.

Feinzaig and Fubini offer plenty of tactical advice for both venture capitalists looking for creative ways to attract founders’ attention and founders looking for the smartest options for their capital schedules.

Pitches and cold emails may not have the power they once did, but creating authentic relationships and demonstrating execution are still the best strategies for attracting the people you want to work with – from both perspectives.

New episodes of Build Mode are released every Thursday Subscribe to the podcast Or watch YouTube. Isabel Johansson is our host. Build Mode was produced and edited by Maggie Nye. Audience development is led by Morgan Little. And special thanks to the Foundry and Cheddar video teams.