A Founder’s Playbook to Raising in a Down Market

• Snippets of advice, tactics, and tools I used to raise an oversubscribed round during an economic downturn

• Capital raised in 2024 is about to hit a 7-year low, mirroring the grim outlook we’ve seen across mass layoffs, dwindling tech stocks, and slowing economic growth.

• Spend as little time on fundraising so we can go back to the building and find values-aligned investors (“smart money”) that will amplify your mission.

Day 0-3

• First, you have to be real with yourself and identify why you’re embarking on a fundraising effort. Are you doing it for the glory? Is it because someone told you to? Or because you believe your company is at an inflection point between opportunity and market timing?

• Taking on venture capital is not for everyone. For most VCs, the economics of investing only work for companies with the ‘potential’ of generating significantly outsized returns — where 1–2 breakout investments have the propensity to offset all other portfolio losses.

• So, by definition, you need to be exploring an opportunity that can scale quickly and deliver on these outsized expectations. Ultimately, you could have a great business that becomes an extremely profitable company — but it’s not apt for raising capital from VCs (angels and/or family and friends is another avenue, though!).

If You have decided to fund raising

• Mentally prepare yourself for the string of rejections and internalize the difficulties of raising during an economic downturn vs. a bull market/low-interest rate environment. This includes:

  • More investors dragging their feed without an urgency to make a decision
  • Lengthier and more dragged-out due diligence
  • Lower valuations, less assumption of risk

Day 3-7: Prepare Your Stack

• Once you’ve committed to the fundraise, ensure all your ducks are in a row. Let’s start with the tools we used at Supademo:

  • Canva and Journey.io for crafting our pitch decks
  • Supademo for building an illustrative, interactive product demo
  • Docsend (you can get up to 90% off the first year) to keep your deck, demo, and data room gated behind email access (this is critical)
  • MailTrack to track responses and reads
  • Loom for short, less than 5 min narrated versions of the pitch deck
  • Notion for tracking investors and their statuses

• Finalize your blurb: a quick, 2–3 sentence overview that encapsulates what you do, market opportunity, traction, and team. This should provide an accurate overview of your company to a stranger. Get as much feedback from trusted advisors/investors/founders as it’ll be the primary way investors first come across your product.

• Get your deck handy: at the pre-seed stage, keep slides to less than 15. Use handy resources like the video below to build an engaging, visual-first deck.

• Practice and record your pitch: build and practice a script for each slide. Once you feel confident with the narrative (ask for feedback!), record a short 5-minute narrated version so you can speed up investor conversations.

• Build your investor list: search through investors who funded founders in your network or those you admire. Jot down their names along with those of their partners. Make sure they invest in your space and haven’t funded your competitor.

NFX Signal VCSheet Space Cadet

One can also Search regarding Enterprise SaaS Pre-Seed Investors

• Create your interactive product demo: investors want to see what you’ve built — your product will do a much better job of illustrating what you do than words or videos that you may never watch.

Get data room handy: ensure access to core metrics like MRR, LTV, Churn, Retention, etc. In addition, identify key customers willing to be references and make sure you’re friendly with them in case of pending due diligence.

Days 7-15

• Nowadays, there are a ton of platforms that aim to democratize access to investors. (Example: SeedChecks, Handwave etc)

• I still prefer to get warm intros from other founders to cut past the noise, especially when VCs are not in a hurry to deploy capital.

• To do this:

  • Look at your network (direct or adjacent) and identify everyone who has raised for their current or past company.
  • Make a list of all the investors they are connected with (add this to the Notion doc mentioned above).
  • Ensure the fund thesis aligns with your company and that they haven’t invested in a direct competitor.
  • Put a heavy emphasis on identifying investors that can lead rounds first, as leads are the biggest determinant of whether you’ll successfully raise.

• You can quickly determine which investors lead by

1. Their check size,
2. track record, and
3. reading their website (usually, they explicitly mention they lead or follow rounds).

• Once you have the list handy, reach out to the specific founder with an intro request. Make it as easy as possible for founders or investors to introduce you — create personalized blurbs where all they need to do is forward it off. Show you’ve done your research by personalizing each email with info on the specific fund and their thesis.

• Aim for ~100 warm intro requests with an anticipated conversion rate of 60% for double-opt-ins. Make sure you follow up often, as founders are busy, and this might not be their top priority.

• Focus on warm intros to lead investors (and their partners) FIRST who can write a significant % of your round vs. spray and pray. Once the lead is in place, everything naturally follows (FOMO). Finally, when thinking through intros — don’t ask/accept intros from investors who passed on your company. It’s a bad signal.

Days 15-30: Meet and Iterate

• If you’ve followed the earlier steps (and have a “venture-backable” company), you’ll likely have a number of investors that double opt-in to an initial conversation.

• Start to schedule these and push for high density (i.e., bucket meetings together in one week). The density of meetings will create FOMO, drive momentum, and help you close faster.

• Target 3–5 investor meetings every single day — which means you need to have a strong pipeline of warm intros.

• Throughout these meetings, write down objections from every investor that passes. Update and address these by tweaking your pitch or presentation accordingly.

• As mentioned before, be prepared for a string of rejections and be ready to expect 20–30 no’s for every yes.

• Once you have interest from a potential lead, aim to communicate via text or WhatsApp instead of email. This will drive velocity and quickly suss out whether the investor is serious.

Days 30+ : Due Diligence

• If you’ve played your cards right, you’ll likely start to do some due diligence with a handful of potential leads.

• This is where you should have your data room and metrics handy from your Day 0 preparations.

• Continue highlighting how you can be a BIG company (even if your initial product is an initial, smaller wedge) and connect the investor to personal references and customers who will go to bat for you. These references can make or break the investment, so choose them wisely.