# Raising early money, from first meeting to monthly update — Full Chat Transcript The Consumer VC work group answers early fundraising questions in group chats. Members cover first meetings, decks and pre-seed rounds, and what to send backers once the money is in. Updated: 2026-10-13 HTML page: [Raising early money, from first meeting to monthly update]() Summary: [Summary]() Work group: [Consumer VC]() ## Participants - [Kirsten Green]() — Founder and Managing Partner of Forerunner. Board member at Glossier - [Alfred Lin]() — Partner at Sequoia Capital. Former Chairman and COO of Zappos - [Nabeel Hyatt]() — EIR and former General Partner at Spark Capital. Board observer at Discord - [Niko Bonatsos]() — Founder of Verdict Capital. Former Managing Director at General Catalyst - [Josh Elman]() — Partner at Andreessen Horowitz. Founded the growth team at Twitter - [Mike Duboe]() — General Partner at Greylock. Former Head of Growth at Stitch Fix - [Anish Acharya]() — General Partner at Andreessen Horowitz. Former VP Product Management at Credit Karma ## Full Chat Transcript #### [Running a first meeting with a seed investor]() **Question:** What should a founder focus on in a first meeting with an early-stage investor? ##### [Kirsten Green]() Show me how you see the customer changing, and why your product fits that change now. Michael Dubin changed my view of Dollar Shave Club when he described a man becoming more interested in self-care while the products on store shelves still spoke to an older idea of him. That consumer insight made a difficult category look different. [Citation: https://wwd.com/beauty-industry-news/beauty-features/feature/kirsten-green-uses-data-and-her-gut-to-make-investment-decisions-1203165095/] Then show what you have done with the insight: a product, a test, and an early sign that customers care. At seed, I look for a founder who can turn an idea into action and see some early consumer response. Do your homework for the meeting, but speak in your own voice about why you're building it. [Citation: https://wwd.com/beauty-industry-news/beauty-features/feature/kirsten-green-uses-data-and-her-gut-to-make-investment-decisions-1203165095/] [Citation: https://abcnews.go.com/Business/venture-capitalist-glossier-warby-parker-pitch-company/story?id=59598299] ##### [Niko Bonatsos]() In my first meeting with Saturn’s founders, they described a problem they lived: scheduling time with friends was harder than scheduling work calls. Their proof of concept already showed striking engagement and retention. Their personal connection to high school users made the product and those early numbers much more convincing. [Citation: https://medium.com/p/7e8a00c22569] Bring the same precision to your own meeting. Say who uses the product, how often they return, and what you have learned from watching them. Five million downloads tells me little if only 10% use the app; an expression of interest is different from a paying customer. I want to leave understanding the customer behavior behind your numbers and the specific problem you are determined to solve. [Citation: https://medium.com/p/3ee385b22b3] ##### [Josh Elman]() I’d spend the first meeting explaining the user behavior you’re trying to create: who needs the product, what they do with it, and why they come back. If you have users, bring one or two specific stories and a number that captures meaningful use. At Twitter, we tracked people who visited at least seven times in a month because that behavior predicted they would return the next month. A headline traffic number would have told us far less. [Citation: https://medium.com/p/ab24a585b5ea] If you’re pre-launch, make the idea easy enough to explain that someone could tell a friend why both of them would use it. Then show that you understand the category and have a concrete plan to learn and improve as users react. Those are the two things I’ve said I look for in very early consumer opportunities. [Citation: https://medium.com/p/d3ecd2b8306e] ##### [Nabeel Hyatt]() So spend the first meeting on the product and the decisions behind it. Show me what a user actually experiences, then explain a choice you made, what you learned, and what you'd change next. That's the work you've spent the most time thinking about, and it gives me a much better read on your judgment than a market-size slide. In my first half-hour call, I'm trying to decide whether we should have a longer conversation. [Citation: https://open.spotify.com/episode/6OOvQpoJrecePShFS3MuWY] ##### [Alfred Lin]() Start with why the company will matter in ten years, then connect that claim to the customer problem you can describe in detail today. At seed, when the company may be one or two people and an idea, the useful evidence can be about the market and why it matters. Explain why you are the right founder to see the opening and what you will build differently for the customer. [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c] Lauren Myrick made that concrete in our first call about Found. She could explain the tax forms and specific hurdles self-employed people face, drawing on her accounting background and work at Square Payroll. We kept talking well past the scheduled time because she knew the customer problem in detail. [Citation: https://medium.com/sequoia-capital/found-supporting-the-future-of-work-e4cca18b85ce] Leave time for a candid exchange. Show the weak data alongside the strong data, ask what in the pitch or business needs work, and watch how the investor responds. You are deciding whether that person can be a sparring partner when things go well and a steady partner when they go badly. [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c] ##### [Josh Elman]() One useful way to show the judgment Nabeel is describing is to tell the story of a user who signed up, left, and later returned. Ask what brought them in, where the first experience failed, why they tried again, and what finally made the product useful. At Twitter, people initially thought they needed to broadcast something; returning users discovered value by following the right people. That finding changed our onboarding and messaging. A founder who can explain a learning like that gives an investor a concrete view of how the product will improve. [Citation: https://medium.com/p/8fc499910e8a] #### [Hard questions from a first investor meeting, with answers]() **Question:** Which questions trip founders up in first investor meetings, and how should they answer them? ##### [Alfred Lin]() The hardest first-meeting question is, "Why will this company matter in 10 years?" Don Valentine used that question at Sequoia. At seed, when you may have one or two people and an idea, answer with the specific change in the market, why it matters to customers, and why your team can act on it now. Your company metrics may be sparse; market evidence can still make the case. [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c] I also ask, "Who is your worst reference, and why?" Give a name, explain what happened, and say what you learned or changed. I am listening for introspection and honesty, because a first meeting begins a working relationship. The same applies when the numbers are bad: show the data, explain the cause, and discuss what you will do next. How the investor handles that candor tells you something about the partnership too. [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c] ##### [Kirsten Green]() The question I’d press is, “Why does this customer care enough to change what they do?” Founders often answer with a category size or a polished brand story. I want to hear what has changed for a specific customer, what the product lets them do better, and what early behavior shows the idea is resonating. Michael Dubin changed my view of Dollar Shave Club by describing a man who was taking a more active interest in self-care while still shopping in a dated aisle. That gave me a clearer view of the customer than “razors by mail” did. [Citation: https://wwd.com/beauty-industry-news/beauty-features/feature/kirsten-green-uses-data-and-her-gut-to-make-investment-decisions-1203165095/] For a seed meeting, pair that kind of customer insight with the action you’ve taken and the earliest sign of demand. As the company grows, show whether people return and how you can reach more of them at a cost the business can sustain. [Citation: https://www.youtube.com/watch?v=HFWlrIb81Sw] ##### [Niko Bonatsos]() For consumer products, ask "Who comes back, and why?" Five million downloads can sound impressive while only 10% of those people use the app. A founder should give the cohort, its time period, repeat-use rate, and what changed after people left. Count discounts alongside ad spend when explaining what it cost to acquire those users. [Citation: https://medium.com/p/3ee385b22b3] Discord offers a useful answer to the "why". The team focused on gamers playing together for 30 to 40 minutes at a time; one player could bring friends, and the product worked reliably during play. That specific use explained both how users arrived and why they stayed. A founder who can explain the same loop for their own product has a much stronger first meeting than one reciting a download total. [Citation: https://medium.com/p/f5704c713bb0] ##### [Alfred Lin]() A first meeting should also test whether the investor will help you improve the company. I am surprised how often founders leave without asking for feedback on the pitch. Ask which claim failed to land and what evidence would change the investor's view. Then try clearer wording in the next meeting and see whether engineers, customers, and investors understand the same core idea. I have recommended treating each pitch as a chance to test the story, and using candid conversations to judge whether the investor can be a useful partner when things get hard. [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c] ##### [Josh Elman]() I would ask, “What did you change after watching users struggle?” The answer shows whether the team can turn user behavior into a better product. At Twitter, we talked with people who signed up, left, and then returned at least a week later. Some thought Twitter was mainly a place to broadcast and had nothing to say. They came back after learning they could follow people they cared about, so we changed onboarding and messaging to help new users find the right people to follow. Activation improved significantly. [Citation: https://medium.com/p/8fc499910e8a] In a first meeting, give the investor that sequence for your own product: what users expected, where they got stuck, what brought them back, what you changed, and what happened to activation. That answer makes early traction easier to interpret because it shows how you are learning to create more repeat users. ##### [Nabeel Hyatt]() A question that trips founders up is, "What would genuinely surprise you about this business a year from now?" A safe forecast can make the opportunity sound as if its best outcome is already priced in. I ask founders to describe the result that would make them feel amazed, then work backward: what would customers have to do, and what would the product have to prove, for that result to be credible? The answer could be a story about product or behavior rather than a revenue target. I've urged founders to sketch the story they want to tell at their next fundraise before defaulting to a spreadsheet. [Citation: https://open.spotify.com/episode/6OOvQpoJrecePShFS3MuWY] ##### [Niko Bonatsos]() Another first-meeting question founders should prepare for is, "What will this round let you do, and why now?" The answer should name the customer group, the work the money pays for, and the evidence that makes this the right time. ClassDojo raised its Series A to win teachers, then its Series B to engage parents and build content for parents, teachers, and kids. Grammarly reached millions of daily active users and profitability before raising to expand its engineering team. Each round had a specific job. [Citation: https://medium.com/p/46ae869af913] I also want founders to explain the tradeoff in the financing itself. A crowded set of seed notes with different caps can leave you unable to say how much of the company you own after conversion. If you cannot explain your valuation and options pool to a candidate you need to hire, the round is creating a problem for the company. [Citation: https://medium.com/p/46ae869af913] ##### Question > Josh, Kirsten asks why a customer changes behavior, while Niko wants a repeat-use cohort. How should a founder answer both in a first meeting when only a small group has tried the product? Please ground your answer in public work and cite it. ##### [Josh Elman]() With a small group of users, I would start with a specific person who changed behavior: what brought them in, what they had to do before the product became useful, and what they now do again without a prompt. Then I would give the count and time window for everyone who followed that path, including the people who tried it and left. A few repeat users can teach you a lot if you can explain the difference between their experience and the others'. At Twitter, some people signed up thinking they needed to broadcast, left, and later returned when they understood the value of following people they cared about. We used those conversations to change onboarding toward finding the right accounts to follow. For a founder in the first meeting, that kind of account answers Kirsten's behavior question and gives Niko a concrete repeat-use group to examine. Tell the story, define the repeated action and its natural frequency, then show what you changed to help more people reach it. [Citation: https://medium.com/p/8fc499910e8a] [Citation: https://medium.com/p/3b3a18f2d1a8] ##### Question > Nabeel, Niko says each round needs a specific job, while you ask founders to name a result that would surprise them in a year. How should a founder connect that ambitious result to a milestone this round can actually test? Please cite public work. ##### [Nabeel Hyatt]() Start with the surprising result, then name the one belief this round needs to test. If the ambition is that customers will return on their own, specify the repeat action, the group you'll measure, and the time window. Explain what you'll build or learn with the round to move that number. An investor can then see the difference between an ambitious story and a milestone the team can actually test. I ask founders what would amaze them a year out because a forecast they already expect to hit leaves little room for a venture-scale surprise; the next pitch can be about product, customer behavior, or data. [Citation: https://open.spotify.com/episode/6OOvQpoJrecePShFS3MuWY] #### [How seed investors want an early pitch deck built]() **Question:** What makes an early-stage pitch deck work? ##### [Josh Elman]() I think the deck works when it helps you tell one story: why you're doing this and how big it can be. I've never thought a deck is strictly required. Its job is to give the story structure so you get through every key point in the meeting. The structure I've recommended to founders for years has five parts [Citation: https://medium.com/p/a1a4150782c]: 1. The problem in the world you're going to solve. 2. Your solution, and why it uniquely solves that problem. 3. How many people have the problem and why they'll adopt your solution. This slide covers market size and go-to-market together. 4. Why you're the exact right people to do this now. 5. How you'll get there: the raise, the plan, and the use of funds. Some founders open with the team, and that works too. In that case you move from team to problem by telling the personal story of why you started. For consumer decks specifically, slide 3 is where I spend the most time. Pre-launch, I'm asking two questions. Does this feel like it "should" work at scale? And if one person explains it to a friend, would both of them feel they "should" use it? [Citation: https://medium.com/p/d3ecd2b8306e] If you have early data, don't fill the deck with downloads or waitlist numbers. Show me whether people perform the core action, and how often they do it compared with how often you expect. A simple retention grid that splits users into cold, casual, and core tells me more than any benchmark comparison, because benchmarks tell different stories for different products [Citation: https://medium.com/p/232474cf414c]. Anyway, a lot of the best companies I've backed changed direction after the first deck. Discord started as a game, Musical.ly as an education app. So the team slide ends up carrying a lot of the decision, and it should show that these founders are hungry to iterate until they find what works. ##### [Kirsten Green]() An early deck works when it connects two altitudes in a straight line. You paint the big picture, then pull it all the way down to today and show exactly how you get off the ground. [Citation: https://www.entrepreneur.com/starting-a-business/forerunner-ventures-founder-kirsten-green-on-what-she-looks/333369] Dollar Shave Club is my favorite example. Michael Dubin was selling razors at launch, but he pitched me a massive men's grooming company. If he'd pitched a razor company, I wouldn't have invested. What made the pitch credible was the bridge: he knew he could own razors, he knew the male consumer had evolved and been overlooked by large CPG brands that weren't using data, and he had a plan to test razors, collect data, then expand into hair care and more. [Citation: https://www.entrepreneur.com/starting-a-business/forerunner-ventures-founder-kirsten-green-on-what-she-looks/333369] So my working framework for the deck has three parts: - The shift. What changed in consumer behavior, technology, or culture that opens this window now? - The wedge. One thing you launch with and nail, including the business model. If the plan is a little bit of everything to start, I think you're doomed. - The layers. How each brick earns the right to build the next one, so the big vision reads as a sequence instead of a wish. The model has to be on the page early. We get pitched lots of beautiful products I'd personally love to buy that don't fit, because the plan is to sell through a big retailer. Glossier anchored in product but used technology to build a direct relationship with the customer, and that relationship is what I'm underwriting. [Citation: https://www.entrepreneur.com/starting-a-business/forerunner-ventures-founder-kirsten-green-on-what-she-looks/333369] Last, the deck doesn't need every answer. It needs to show you can find them: that you see what others don't and move with precision. [Citation: https://www.forerunnerventures.com/focus] ##### [Nabeel Hyatt]() Josh is right that the deck exists to carry one story. I'd just write that story before touching any of the five slides, because founders fall back on numbers when they don't have a story to tell. When I help a founder get ready for their next round, I don't open a slide template. I ask: what do you want to be able to tell the world in 18 months about this product? Write that down first. After that we can argue about whether it's actually doable or whether you're sandbagging. [Citation: https://open.spotify.com/episode/6OOvQpoJrecePShFS3MuWY] Here's how I'd structure the deck: 1. Build it around whatever you've obsessed over the most, and for nearly every early founder that's the product, so I'd get to it faster than a long problem section allows. A founder spent maybe two or three hours on the TAM slide, and these days a model probably spat it out for them. The product holds thousands of hours of their thinking, so that's where an investor actually learns who they're dealing with. [Citation: https://open.spotify.com/episode/6OOvQpoJrecePShFS3MuWY] 2. Put the risks in the deck. Founders love the realtor trick: list everything wonderful, then point at the one flaw so nobody thinks about the other 30. But you're an early-stage startup, so of course something in the business is broken. Say what's risky and what you haven't figured out. The right investor will tell you they don't believe that risk is real, or they're happy to take it on, or they think you can solve it. That's the conversation you want. [Citation: https://www.hallwaychat.co/building-entropically-gemini-prompt-engineerings-revenge-and-superpowered] (My co-host Fraser Kelton passed along a line from someone at his firm: the fastest way to a no is a pitch with no risk in it, because that isn't a venture business.) 3. Write it to get one strong yes. The thing I figured out by my third and fourth startups was to pitch the way I wanted to pitch, not the way my founder friends told me to. Pitching that way earns you lots of strong no's plus one or two strong yeses, and that's ten times more valuable than a stack of "seems okay." Lukewarm interest doesn't become a check or a board seat or someone who joins your cause for ten years. [Citation: https://www.hallwaychat.co/building-entropically-gemini-prompt-engineerings-revenge-and-superpowered] ##### Question > Josh argues that for pre-launch consumer decks the team slide ends up carrying most of the decision, because the best companies often change direction after the first deck. Alfred, do you agree? If a founder has no product data yet, what specific evidence on the slides convinces you this team will find what works? ##### [Alfred Lin]() I agree in part. The market and the founder are the two most important variables, and they do different jobs: the market sets how big the company can get, and the founder sets how big it will get [Citation: https://www.youtube.com/watch?v=fq33ylz7IMc]. Pre-launch, the team slide carries the "will" half. A great team in a market that won't be much bigger in 10 years still has a low ceiling, so I don't let the team slide carry the whole decision. With no product data, I look for four kinds of evidence in the deck and the meeting. 1. They have lived the problem and stayed with it. The founders I've seen succeed were solving problems they had personally experienced, and many of them got the flywheel going only after several tries [Citation: https://www.youtube.com/watch?v=T-D-JqxQtIY]. The deck should name the specific problem they kept working on, beyond the bare fact that they started a company. 2. They show clear thinking at the right level of detail. Ellen DaSilva at Summer Health was a Sequoia Scout before she founded the company, and when we backed them at pre-seed in 2021 her writing already focused on first-order issues, with depth only where it mattered [Citation: https://outlierspath.com/2024/04/03/update-your-first-believers]. A deck shows the same thing in what the founder chose to include and what they cut. 3. They separate inputs from outputs. A founder who can say which inputs they will measure and change before launch is someone who will find what works. Most teams only watch outputs [Citation: https://www.youtube.com/watch?v=PDAcJ-ih4wA]. 4. They are honest. I ask founders to name their worst reference and explain why. How introspective the answer is tells me whether we can trust each other enough to work through a pivot together [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c]. The deck still has to answer Don Valentine's question: will this company matter in 10 years? Specific facts about the market and why it matters make the answer credible, even when the company is one or two people and an idea [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c]. ##### Question > Nabeel says to get to the product fast because founders spend only a few hours on the TAM slide. Alfred says the market sets how big a company can get, so a pre-launch deck needs specific facts about where the market is going. Niko, for the technical founders you back who are their own customers, which of those two should get the early slides, and what did a deck that did this well actually show you? ##### [Niko Bonatsos]() Product first. For technical founders who are their own customers, the product is the market evidence, because they are the first data point of demand. Last Thanksgiving I posted that you don't need a perfect pitch deck, you need a prototype that works [Citation: https://www.linkedin.com/feed/update/urn:li:activity:7399544640862838784/]. So slides 1 and 2 should be the demo and the founder's own pain. Saturn is the example I keep coming back to. Dylan Diamond and Max Baron were barely a year out of high school when they met Denali Tietjen and me in May 2019. Their pitch opened with what they lived every day: it was easier to schedule a conference call with colleagues than dinner with friends. Then they made the case for building a social platform around "shared time" [Citation: https://medium.com/p/7e8a00c22569]. The problem came first, from their own lives, and the market argument followed from it. Alfred is right that market size can't be skipped. I want it smaller and checkable: a few big numbers an investor can validate with one call to a banker friend, plus customers or prospects they can talk to [Citation: https://medium.com/p/cb78600fa436]. A model-generated TAM slide adds nothing. The market slide I actually care about is "why now," and it should name a specific enabler: front-facing camera gave us Snapchat, GPS gave us Waze [Citation: https://medium.com/p/334755a5f370]. In May 2020 I joked that the Why now slide in every deck raising money was the Covid-19 slide [Citation: https://twitter.com/bonatsos/status/1260764538741424128]. That is Kirsten's "shift," made concrete enough to check. Two more tests from that 2013 list. Could my mother in Greece explain it in five words? And does it sound silly to most people, the way "Snapchat is for sexting" did? A deck that makes most partners shrug and one lean in is Nabeel's strong-yes outcome. On team, cut "hundreds of years of collective experience" [Citation: https://medium.com/p/3ee385b22b3]. Name the people who quit good jobs to join before there was a product. That answers my last 2013 question: are their friends dying to work for them? ##### Question > Niko says that at pre-seed a working prototype carries most of the weight, and Nabeel wants founders to reach the product fast. Alfred says the early facts will mostly be about the market and why it matters. Kirsten, your shift, wedge and layers framework sits between those views. For a pre-launch consumer company with a working demo, what slide order would you recommend, and where does the business model slide go? ##### [Kirsten Green]() With a working demo, I'd run it in this order: 1. The shift. One slide on what changed in behavior or technology, specific enough to check, the way Niko described "why now." 2. The demo, framed as the wedge. Show the one thing you launch with. 3. Business model, directly after the demo. 4. Evidence of behavior. Even pre-launch, show what people actually do with the prototype, including your own usage. The biggest risk I see in consumer is the say/do gap, so waitlists and survey enthusiasm count for little here. 5. The layers. How the wedge earns the right to the next product, and the next. Market size goes here, as the sum of the layers, which answers Alfred's ceiling question without a model-generated TAM. 6. What can't be copied: distribution, the data loop that makes the product smarter with use, and why people will trust it. With off-the-shelf models, the advantage moves to who assembles and refines the best experience. [Citation: https://www.forerunnerventures.com/perspectives/the-architects-of-experience] 7. Team, risks, and the raise. The business model goes third because it decides whether the demo is fundable. We get pitched plenty of beautiful products I'd love to buy that don't fit, because the plan is to sell through a big retailer. Glossier anchored in product but used technology to build a direct relationship with its customer, and that relationship is the thing I'm underwriting. [Citation: https://www.entrepreneur.com/starting-a-business/forerunner-ventures-founder-kirsten-green-on-what-she-looks/333369] If an investor loves the demo and only finds out on slide 12 that the model doesn't work, you've lost them anyway. Placing the model there also connects the wedge to the layers. Dollar Shave Club's razors only made sense as the start of a men's grooming company because the direct relationship and the data were in place from day one. That's what let Michael test, gather data, and expand into hair care. [Citation: https://www.entrepreneur.com/starting-a-business/forerunner-ventures-founder-kirsten-green-on-what-she-looks/333369] #### [What seed investors judge before a startup has traction]() **Question:** What do investors look for in a startup before it has much traction? ##### [Kirsten Green]() Before there's real traction, I'm underwriting the founder's mental runway. Strategy and market analysis come second to whether this person has the conviction to will the vision into existence when it gets hard. A history of beating the odds is one of the strongest signals I know, because that person already believes hard things can be overcome. In the room, that shows up in a few concrete ways: • Clarity over polish. The best founders can state the problem they're solving in one compelling sentence. • Obsession with the problem. They want to talk about it more than they want to pitch. • Bias toward action. They started building before anyone gave permission or a perfect plan existed. • Productive tension between co-founders who push each other and still share one vision. Then there's the ability to get people excited. Early on, a founder's main job is to attract and activate resources: talent, capital, partners. I'll also notice whether our conversation flows like a real exchange of ideas, and whether they hold a strong vision while staying curious enough to take in new input as the market shifts. On the business side, I want to see a model that can scale. We get pitched lots of beautiful products I'd happily buy, yet many don't fit a venture profile because the model is just selling product. Glossier is a tech company in my view because of how it builds its relationship with customers. [Citation: https://www.entrepreneur.com/starting-a-business/forerunner-ventures-founder-kirsten-green-on-what-she-looks/333369] For technical products, I ask founders to separate what's validated from what's still a hypothesis, and to define the specific "moment of value" for the user. The last test is whether this business needs to exist in the world, and whether I'd be proud to have backed this founder even if it doesn't work out. ##### [Josh Elman]() I agree with Kirsten on the founder, and I'd put just as much weight on whether the idea passes a simple social test. A friend once asked me how I think about consumer investing pre-launch, sometimes before there's even a product, and this is what I told him: 1. The idea should feel like it "should" work at scale. If someone explains it to a friend, both of them would feel like they "should" use it. 2. The founders seem smart enough, they know what's going on in the broad area, and they are so, so hungry to iterate and make something great. [Citation: https://medium.com/p/d3ecd2b8306e] I weigh the second one more heavily, because with few or no anecdotes, data, or user feedback, it's really hard to predict which mix of brand and features will make people love something. My own portfolio is a good example of why the team matters so much. Discord started as Fates Forever, a game. Musical.ly started as Cicada, an education app. Nextdoor came out of Fanbase, which was for sports fans, and Twitter came out of Odeo, a podcasting company. In each case a strong team built a solid product that didn't catch on. They kept going, and when they hit the right thing they could sense the difference right away: users engaged, communities formed, and retention held. So I'm betting on the team that will find the thing, even if the current product isn't it yet. If you do have a little early data, I'd much rather see a small group of users who come back on their own and do the core action than a big number of signups or a long waitlist. ##### [Nabeel Hyatt]() For me it starts with the product itself. My track record on pure pre-product bets is honestly mixed, so I prefer to show up once something exists, even if nobody is using it yet. The most reliable filter I have is whether the product already feels magically better than the alternatives. Discord had a few thousand users when we led a round a few months after launch. We led Cruise's Series A a few weeks after their first private demo of a fully autonomous drive. Neither had traction in any spreadsheet sense, but you could feel the product. Then founder judgment, because at pre-seed that's nearly all the data there is. The idea will probably change several times in year one. So I want to see a team that's moving through that fog on purpose, that can say what they'd do no matter what investors think, and that can explain what they won't do. A founder who gets murky about how they make decisions is a red flag. So is a polished "everything went according to plan" story; I trust founders more when they can name their mistakes and pivots. Also.. don't confuse charisma with momentum. A few arranged calls and a busy calendar aren't data. I try not to write the check while I'm still drunk on the pitch. I get sober first, and sometimes that means putting the product in front of our own portfolio companies to see whether anyone actually uses it. Market size barely enters into it. Almost every big Spark exit has been a market-expansion story, so the question I ask is whether the market can grow, not how big the TAM slide is today. [Citation: https://www.youtube.com/watch?v=HQAeSZw5iXk] ##### Question > Kirsten says that before traction she underwrites the founder's conviction first and puts strategy and market analysis second. How do you weigh a founder's conviction against the quality of their insight into the market when there is little data? Please give an example of a seed decision where one of those two clearly outweighed the other. ##### [Alfred Lin]() I weigh insight first, then test whether the founder's conviction will hold up. Conviction without insight is stubbornness. An outlier founder can credibly connect what is true today to a future most people can't see yet, and that is what I mean by founder-market fit. Every VC wants a great team, a large market, a specific product and a differentiated business model. Screen only on that checklist and you either find nothing or you find something close to perfect and overpay for it. [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c] Sequoia's history has a clear case on each side. NVIDIA is the case where the person outweighed the market analysis. When Jensen pitched Don Valentine, he had no "GPU" category. He couldn't describe his customers or his market size, and his plan to build for video game companies was one Don dismissed, because startups can't depend on other startups. Don invested $1M anyway. His conviction came from Wilf Corrigan at LSI Logic, who had watched Jensen solve hard problems for years. [Citation: https://outlierspath.com/2023/03/26/nvidia] DoorDash is the case where we got it wrong. In September 2013 the founders had $20,000 in the bank. A Stanford football game produced 100+ orders at once, and food arrived 90 minutes late. They spent about $14,000 on refunds, then stayed up until 5 a.m. baking cookies and delivering them to every customer. They raised their seed round only after dozens of rejections, and Sequoia was among those who mistakenly passed. [Citation: https://medium.com/sequoia-capital/doordash-ipo-resilience-gets-results-89e4e3e862ae] The insight was there, because Tony grew up around small businesses. We underweighted the resilience. At seed, I test the insight in the pitch and the conviction through what the founders do when things break. Sequoia's postmortems on our biggest misses always trace back to a psychological bias. None of them trace back to an error in calculation. [Citation: https://www.youtube.com/watch?v=fq33ylz7IMc] ##### [Niko Bonatsos]() First, I look for a founder who is the customer of their own product. Before there's real traction, the founder's personal connection to the problem is the strongest signal available. When I met Saturn's founders in May 2019, Dylan and Max were Wharton sophomores, barely a year out of high school, and one of them skipped an exam to take the meeting with us at General Catalyst. They had noticed it was easier to schedule a conference call with colleagues than dinner with friends, and no calendar was built for their generation. That firsthand familiarity with the problem and the audience reminded me of Evan and Bobby at Snap. [Citation: https://medium.com/p/7e8a00c22569] On Alfred's split between conviction and insight, a founder who lives the problem every day usually has both, and you can check the insight quickly by watching how they use their own product. Second, Josh is right about a small group of users who return on their own. Saturn's proof of concept already had engagement and retention I hadn't seen since Discord and Sleeper, and that intensity was the data point, with the user count still tiny. Big download numbers are usually vanity metrics: I've seen 5 million downloads where only 10% actually used the app. [Citation: https://medium.com/p/3ee385b22b3] Third, I run the idea through a short list of questions [Citation: https://medium.com/p/334755a5f370]: - What new technology makes it possible now? The front-facing camera made Snapchat possible, and GPS made Waze possible. - Does the product get better for each user as more people join? - Does it sound silly to most people? "Snapchat is for sexting" did. Kirsten's one-sentence clarity test matters, but the best early ideas often sound dumb in that sentence. At this stage you don't need a famous cofounder, a warm intro, or a polished deck. You need a prototype that works. Early traction is mostly a story problem, so the best founders know which narrative gets them to the next stage. ##### [Nabeel Hyatt]() I'm with Alfred on insight first, and Q.ai is my clearest example. It also breaks my own rule about waiting for a product. Aviad cold emailed in 2022, and we invested pre-product and pre-revenue in silent speech, which is exactly the kind of bet I said I'm usually bad at. What carried it was the quality of the insight: a founder with a clear, incisive view of where the technology could go who could explain it with real fluency. Conviction alone wouldn't have gotten me there. It worked, and Apple acquired the company this year for $1.6b. The founder I worry about is the "force of nature" type. They can will a company into existence, and they're often pretty self-aware about how they work. But when there's no product to feel, I can't tell yet whether that intensity will turn into a strategy they can actually execute, so the insight has to carry the case. #### [How a pre-seed round runs, from first meeting to money in the bank]() **Question:** How does a pre-seed round work, from first conversation to close? ##### [Niko Bonatsos]() At pre-seed the first conversation decides most of the round. There are no metrics to diligence yet, so the investor is underwriting the founder and the problem. When Dylan and Max of Saturn first sat down with Denali and me at GC, they were Wharton sophomores skipping an exam to be there. What hooked us was how precisely they described a problem they lived every day, plus early engagement on a proof of concept that reminded me of Snap. [Citation: https://medium.com/p/7e8a00c22569] Here is how a round usually runs from there: 1. Warm intros, ideally from founders the investor has backed, and talking to several firms in the same window so you have options. [Citation: https://medium.com/p/cb78600fa436] 2. A lead commits and sets the terms. These days that is usually a SAFE with a cap. 3. Angels and smaller funds fill in around the lead. Picking them takes more care than collecting them: ask whether each one is bought into the team for the long haul or just wants to push you toward the highest Series A price. [Citation: https://medium.com/p/46ae869af913] 4. Close, wire, and get back to building. The most common pre-seed mistake I see comes at step 3. Founders stack multiple SAFEs and notes at different caps, and then nobody can say what the dilution or ownership actually is. That breaks your hiring, because good early employees want to understand the equity they're being offered. One lead, one instrument, one cap. [Citation: https://medium.com/p/46ae869af913] Also skip the cap arms race. Your accelerator classmates raising at a $10M cap doesn't mean you need to. Raise when you know exactly what the money buys over the next 12 to 18 months. ##### [Kirsten Green]() Pre-seed is a relationship decision more than a numbers decision, so the process works best when it starts well before you need the money. 1. **Build relationships early.** The advice I give people raising a fund applies to founders too. Act like you are always fundraising, so that opening the round is mostly a formality. Tell the investors you care about that you plan to raise well before you do. Use those early conversations to learn about them too: what their portfolio looks like, how they see the market, and whether they are actually writing checks right now. 2. **First meeting.** Keep the story simple. Give the big narrative and the three strongest points that show a smart business in a large market. Save the operating details for later meetings. 3. **Materials.** At pre-seed I want to see early engagement: repeat usage and any viral growth, stated relative to your total user base so I can judge scale. I also want your monetization plan, even if it's only on the roadmap. Explain the inflection point that makes now the right time to raise. Be explicit about how much you're raising, because that tells an investor right away whether you fit what they invest in. 4. **Diligence.** It's fine for both sides to take a deliberate process. At pre-seed, the investor is mostly building conviction in the founder and the thesis. Even as an angel, when no one required it, I wrote a memo for every deal so I could check whether I actually believed my own reasoning. [Citation: https://www.youtube.com/watch?v=LDwhUGIeDu4] 5. **Terms and close.** When pricing is hard to agree on, both sides should be open about their expectations and constraints. A good close leaves the founder energized and with enough capital, and leaves the investor confident their money and time are going to good use. ##### [Mike Duboe]() Kirsten's point about starting early matches the easiest deal I've done. I'd known the SuperMe founders for years before Greylock led their seed, so it was one of the easiest "yes" decisions of my venture career. What made it a lead check was the time we spent together on the thesis afterward, which convinced me I wanted to work on that problem for the next decade. Founders should use those sessions to test whether the investor shares their view of the problem, because a partner who only likes the team is weaker support once the plan changes. The step nobody has covered yet is how to read a "no." We passed on Whatnot early even though it had many of the right elements: deep liquidity within a narrowly defined subvertical, a new engagement format (card breaks), founders who had studied eBay's history & had a view on how to disrupt it, and fast iteration. The thesis was right and our call was wrong. A pass at pre-seed often tells you more about how that firm framed the bet than about your company. Keep the parallel conversations Niko described running, and don't rewrite the pitch after one "no." ##### Question > Niko argues a pre-seed round should have one lead, one instrument and one cap, because stacked SAFEs at different caps make dilution unclear and hurt early hiring. Plenty of pre-seed founders instead raise rolling SAFEs from angels and small funds with no lead at all. When have you seen the no-lead, rolling approach work, and what specifically went wrong when it didn't? ##### [Mike Duboe]() I don't have a clean case study of a rolling round failing, so I'll give my judgment on when the no-lead structure holds up. The rolling, no-lead version works when the founder is the de facto lead. That means they have a dense network of operator-angels who are each useful for something specific, and a capital-light plan that the money clearly covers. In that setup, the cap table is a set of specific asks. At Tilt, the most effective partnership tactic was asking the full investor base for intros: the seed investors, accelerator networks & banking relationships as well as the lead. That only works if every name on the cap table is someone you'd actually go to for help. It breaks down in two ways: 1. Nobody owns the company's problems. A lead is the person who takes the 10pm call and pushes on strategy. Without one, 25 small checks can turn into 25 people who each assume someone else is helping. 2. The founder ends up raising the whole time. Rolling closes stretch the raise across months, and every week spent on the next SAFE is a week off the product. That's why I'd still lean toward Niko's rule even for small rounds. If you go without a lead, pick angels you'll actually keep updated and learning alongside you, which is Casey Winters' point. ##### Question > Niko says to raise what the next 12 to 18 months clearly cost and skip the cap arms race, and Mike adds that rolling closes drag the raise out for months. When you lead a pre-seed round, how do you and the founder actually arrive at the round size and the cap, and how many weeks does it typically take from the first meeting to money in the bank? ##### [Alfred Lin]() The founder and I set round size from the inputs. We list the experiments, hires and product milestones that would take the biggest risk out of the business, then cost them. The output metrics come later. Amazon taught me the inputs/outputs split, and it works for a budget as well as for a board deck. [Citation: https://www.youtube.com/watch?v=PDAcJ-ih4wA] The round size is whatever gets the company to the point where the next investor can see the risk retired, plus some buffer. That ties back to Niko's 12 to 18 months. The buffer matters because underfunding is a real way to fail. Romotive had 2,000 Kickstarter orders and could still raise only $1.5M in seed funding after TechStars Seattle. The team had to make every early decision with very little money. Romotive later pivoted into Zipline, but thin capital made those years harder than they needed to be. [Citation: https://outlierspath.com/2023/03/19/romotive-to-zipline] The cap comes last, and it matters least. I think about four variables: the size of the prize, the probability of success, the investment cost, and the time to exit. Investors usually estimate cost well and misjudge the size of the prize. At pre-seed the price matters much less than whether the company becomes an outlier. When a founder pushes a cap up to match accelerator classmates, they are optimizing the one number that matters least. They also set a higher bar for the next round. I don't have a standard number of weeks. Time from first meeting to money in the bank depends on how much both sides already know. With Ellen DaSilva at Summer Health, years of working together first as a Scout meant the pre-seed decision itself went quickly. [Citation: https://outlierspath.com/2024/04/03/update-your-first-believers] When we meet cold, I want enough meetings to see how the founder handles bad data and to run blind references, and the founder should run them on me too. After both sides decide, the paperwork on a single-lead SAFE is the fastest part. ##### [Nabeel Hyatt]() The rolling-SAFE problem Niko and Mike described has a simple cause: nobody does the accounting along the way, so the dilution shows up as a surprise later. So I agree with Niko on "one lead, one instrument," but I'd push a little on the assumption that the instrument has to be a SAFE. I do both SAFEs and priced rounds. Ten years ago SAFEs were fast and cheap and priced rounds were expensive and Byzantine. Since then SAFEs have picked up extra terms and gotten more complicated, while priced rounds got much cheaper and simpler, so the lawyer-cost gap has mostly closed. If a founder is willing, I'll often do the priced round with them, because this is the first of maybe 3 to 5 rounds and a clean cap table now saves a lot of muck later. If a SAFE is the easiest way to get it done, use a SAFE. [Citation: https://www.hallwaychat.co/ai-models-weighing-the-chances-of-commodity-vs-differentiation] On the first conversation, what I'm looking for is a founder who can say clearly what they'll do in year one, who they'll hire, and where the product is going, while being honest about how foggy it all still is. If someone can't explain how they make decisions, that's the red flag. The idea itself will probably change a few times that year. Kirsten's point about a deliberate process fits how I think about the middle of the round. I'd rather have a good second meeting, a better third, and a great fourth than a shotgun auction with 24 hours to decide. [Citation: https://www.hallwaychat.co/stages-of-disruption-adaptation-evolution-or-revolution-plus-email-ai-app-shortwave] But deliberate doesn't mean open-ended. Skip the fake urgency: "this closes in two days" usually hurts you, and if the raise is going slowly, investors probably already know. [Citation: https://www.hallwaychat.co/building-entropically-gemini-prompt-engineerings-revenge-and-superpowered] Set a firm date for term sheets instead, so the round doesn't drift into months of limbo. ##### [Mike Duboe]() I agree with Alfred's inputs-first approach. One thing to add: decide upfront which output the next investor will judge, and make it a quality bar. At Stitch Fix, the acquisition team took no credit for a new client unless that client kept at least one item and said they were anticipating their next fix, because that answer predicted who stuck around. CAC went up on paper, but the number reflected real retention. [Citation: https://youtube.com/watch?v=fxi8hRFZQvM] The pre-seed version is to size the round against a strict milestone like that, say repeat usage from a defined cohort, rather than against raw signups. That gets you a budget the Series A investor will actually believe. ##### [Kirsten Green]() Mike's point about reading a "no" connects to the work founders should do before the first meeting. Find out which themes each firm is already tracking. A pass often means your company didn't fit the firm's thesis, and you can check for that fit ahead of time. Craftwork is a good example from our side. Forerunner led their $6M seed after only a few months of operations in one market. We could have made that investment on the team's execution alone. Tim had already taken his previous company from $1M to $150M in revenue in 18 months. It also helped that Craftwork fit themes we were watching closely, including large real-world industries that are open to reinvention. When a company fits both the team test and the thesis test, the decision moves fast. [Citation: https://www.forerunnerventures.com/perspectives/leading-craftworks-seed-round-to-build-the-beloved-consumer-brand-in-home] That round also shows the structure Mike is describing, with a lead plus angels who each cover a specific need. General Catalyst, Y Combinator, Jeff Jordan and DoorDash co-founder Evan Moore joined around our lead. Jeff and Evan know marketplaces and local logistics, which is exactly where a home-services company needs help. ##### [Niko Bonatsos]() Mike's second failure mode, the founder raising the whole time, is the reason I'd keep the open part of the round short even when relationships started years earlier. VCs run on greed and fear, and the fear is of passing on something a peer firm then backs. Running parallel conversations in a tight window and lining up a few term sheets before you choose is what gets people to decide. Nabeel is right that manufactured urgency backfires, so the pressure has to be real: actual competing interest plus his firm date for term sheets. A pre-seed that drips along for four months starts to look like a pass to everyone still watching. [Citation: https://medium.com/p/cb78600fa436] The other decision founders underrate is who leads, because the pre-seed lead often leads the next round too. I led the pre-seed and then the seed at Numerade and at Bandana. At Remote I led the pre-seed and co-led the seed. In all three cases the founders were choosing their seed partner and likely a board member, even though it looked like one small first check. Alfred's blind references cut both ways here. Ask the lead directly whether they plan to follow on, then call a founder in their portfolio whose company went sideways and ask how the investor behaved. A VC is a lot harder to get rid of than a co-founder. [Citation: https://medium.com/p/cb78600fa436] ##### Question > Niko, you said the lead usually sets terms on a SAFE with a cap. Nabeel says priced rounds are now nearly as cheap in legal fees as SAFEs, and he often prefers them at pre-seed because this is the first of 3 to 5 rounds and a clean cap table saves trouble later. In which situations would you tell a pre-seed founder to push for a priced round instead of a SAFE, and when would you still insist on the SAFE? ##### [Niko Bonatsos]() I agree with Nabeel more than my "usually a SAFE" line suggested. The instrument matters less than whether the founder can see their own ownership on a single page, and a SAFE makes that easy to skip. I keep meeting founders who took a SAFE and got excited about "no dilution." In fact the dilution is all still there, just deferred. They end up with a pile of notes converting at different caps and can't tell a candidate what 0.5% of the company is actually worth. [Citation: https://medium.com/p/46ae869af913] I'd push for a priced round when: 1. The round already has a committed lead writing most of the check. The negotiation is done anyway, so pricing it costs little extra. 2. The founder plans to hire senior people soon. Strong early hires want to understand the valuation and the option pool, and a priced round gives them real numbers. [Citation: https://medium.com/p/46ae869af913] 3. The founder is likely to keep adding small checks over months. A priced round forces a close date and stops the cap creep. I'd stay with a SAFE when the round is small and quick: one lead, a handful of angels, one cap, signed within a couple of weeks. In that case speed is worth more than precision. But I'd still make the founder model the conversion at the next round before signing. If they can't explain their post-money ownership afterwards, the SAFE was the wrong tool for them, however cheap it was. #### [What an accelerator application needs to show]() **Question:** What makes an accelerator application stand out? ##### [Niko Bonatsos]() Show why this team had to build this product, then show that people come back to it. When I met Saturn’s founders, they described a problem they knew firsthand: arranging time with friends was harder than scheduling work calls. Their proof of concept already had striking engagement and retention, and their closeness to high school users came through in the product. [Citation: https://medium.com/p/7e8a00c22569] For an accelerator application, I’d give the reader three concrete things: the specific user and pain, what the founders built because they understand that pain, and a small cohort’s repeated use over a defined period. Report active and retained users with the cohort and time window. A download count alone can hide whether anybody uses the product. [Citation: https://medium.com/p/3ee385b22b3] ##### [Alfred Lin]() I would make the case for why the company will matter in ten years. At the seed stage, the evidence can come from a change in the market before your own traction is strong. Explain what changed, why your team can act on it now, and how your product changes the customer's experience. Share a weak metric alongside your plan to learn from it. That candor is useful evidence of how the team makes decisions. [Citation: https://medium.com/south-park-commons/alfred-lins-fireside-chat-at-south-park-commons-60a2879ea19c] ##### [Niko Bonatsos]() Alfred’s ten-year case gets sharper if the application names the first distribution path. For a consumer product, I’d ask: where will the first tightly connected users discover it, and why does using it get better when their friends join? Those are questions I’ve used to evaluate consumer products, alongside the technology that makes the product possible now. [Citation: https://medium.com/p/334755a5f370] Write the answer around one initial community and the behavior that brings the next user in. ##### [Nabeel Hyatt]() Put the product itself in the application. Give me a link I can use, or a short demo if it needs one, and tell me what users do with it that they could not do before. I learn much more about a founder's judgment from that than from a market-size slide. [Citation: https://open.spotify.com/episode/6OOvQpoJrecePShFS3MuWY] Then name the biggest risk in the idea and the specific evidence you have that you can solve it. Early-stage founders can make a stronger case by proving the one thing the business depends on than by trying to make every box in an application look green. [Citation: https://www.hallwaychat.co/making-the-perfect-backpack-craft-in-the-age-of-ai] ##### [Anish Acharya]() The strongest application makes three things easy to see: why this team has an edge on this problem, what they know that others miss, and why the timing works now. Those are the questions I raised when discussing Deel, including the risk of a good idea arriving at the wrong time. [Citation: https://podcasts.apple.com/us/podcast/interview-with-alex-bouaziz-co-founder-ceo-of-deel/id1479056989?i=1000530504695] For an early team, I'd make the evidence of learning concrete: what did you ship, what did users do, and what did you change as a result? I've described speed of learning as a company's early superpower, because faster cycles get you to product-market fit faster. [Citation: https://podcasts.apple.com/us/podcast/ep93-fmr-credit-karma-vp-product-management-on-the/id1038890550?i=1000469446244] ##### [Kirsten Green]() I would look for a specific consumer insight that the founder can explain in plain language: who has the problem, what they do today, and what the founder has seen that others have missed. Our investing lens starts with founders who see what people need early and understand the person as clearly as the technology. [Citation: https://forerunnerventures.com/team/kirsten-green] The application should also explain what makes the product worth trying in the first place. I look for a distinct idea that meets a real need, gives people a reason to talk about it, and delivers on its promise once they try it. [Citation: https://www.youtube.com/watch?v=HFWlrIb81Sw] Let the founder's own voice come through: do the homework and explain why you care about building this. I have urged founders to be informed and be themselves when pitching. [Citation: https://abcnews.go.com/Business/venture-capitalist-glossier-warby-parker-pitch-company/story?id=59598299] ##### [Niko Bonatsos]() The numbers in the application should survive a basic follow-up question. If revenue grew after a promotion, include discounts in customer acquisition cost. If a buyer signed an LOI, call it an LOI and say what still has to happen before a contract. I’ve seen founders overstate pipelines and later miss their projections; an honest account of what has converted gives a reviewer more to work with. [Citation: https://medium.com/p/3ee385b22b3] ##### [Alfred Lin]() A narrow starting market can make a large ambition more credible. DoorDash had product-market fit in Palo Alto, and Tony Xu's team saw an overlooked path through the suburbs while competitors focused on cities. Tony's experience working in restaurants with his mother also gave him firsthand knowledge of the merchants they served. In an application, I would connect those pieces: identify your first market, the customer insight that led you there, and the next adjacent market you can reach if the first one works. [Citation: https://medium.com/sequoia-capital/doordash-ipo-resilience-gets-results-89e4e3e862ae] ##### [Nabeel Hyatt]() A change of mind can be the strongest evidence in the application. I met Cruise when the team was building an aftermarket self-driving product for Audis. I liked the team, but the product and its path to market did not convince me. Later Kyle came back with what he had learned, a plan for fully autonomous driving, and a demo. That product experience changed my decision, and we moved quickly to invest. [Citation: https://open.spotify.com/episode/5jy8U9Ik6z7WxTx41tHBZ5?autoplay=true] So if the team changed direction, use a few lines to say what you believed before, what you saw that changed your mind, and what the current product proves. That sequence lets a reader judge how you learn under uncertainty. ##### Question > Anish, Niko asks for a defined retention cohort and warns against inflated numbers. For an application submitted before retention can be measured, which specific evidence of learning would carry the most weight, and why? Please cite a public source. ##### [Anish Acharya]() Before retention is measurable, I'd put the most weight on a completed learning cycle: a working product, the specific users who tried it, what they did, and a change the team shipped because of what it learned. Include the dates and the user count so the reviewer can separate a real test from a founder's prediction. Early on, I've described speed of learning as a company's superpower, because faster cycles get a team closer to product-market fit. [Citation: https://podcasts.apple.com/us/podcast/ep93-fmr-credit-karma-vp-product-management-on-the/id1038890550?i=1000469446244] #### [What seed investors want in a monthly update]() **Question:** What should a founder put in a monthly investor update? ##### [Josh Elman]() I’d put one product question at the center of the update: how many people used the product for its intended purpose, and did they come back? At Twitter, we tracked people visiting at least seven times in a month because that behavior predicted continued use. The right interval depends on the product; a shopping app may have a different natural rhythm than a communication app. [Citation: https://medium.com/p/ab24a585b5ea] [Citation: https://medium.com/p/3b3a18f2d1a8] A compact template for a consumer founder: - Core users: [number who completed the defining action at the expected frequency], [change from last month], [return rate for prior cohorts]. State the exact definition. - Path to that behavior: [new users], [number who completed the first useful action], [number who returned], and the step where people drop off. - What we learned: [one user observation], [what we changed], [early result]. At Twitter, interviews with people who returned after an initial failed attempt showed that finding the right accounts to follow mattered, so we changed onboarding around that action. [Citation: https://medium.com/p/8fc499910e8a] - Business and help: [revenue, burn, runway if relevant], [next month’s priority], and [one specific introduction or decision investors can help with]. ##### [Alfred Lin]() A monthly update should show the company's speed and direction, then give investors a specific way to help. Ellen DaSilva and Matthew Woo's redacted Summer Health update is a useful model: it opens with runway and a small set of operating metrics, then covers investor asks, people, wins, setbacks, and next milestones. For a consumer business, the useful metrics depend on its model; Summer Health tracked paying customers, retention, signups, conversion, visits, and MRR. [Citation: https://outlierspath.com/2024/04/03/update-your-first-believers] I would send this each month: 1. **Health:** Cash runway in months; 3 to 6 consistent metrics with current value and month-over-month change. 2. **What changed:** One or two wins and one or two setbacks, with the cause and what the team learned. Summer Health, for example, explained how higher visit volume lowered provider cost per visit while straining operations. 3. **People:** Key hires, departures, and changes to hiring plans. 4. **Next month:** The milestones, why they matter, and what you expect to learn. 5. **Asks:** Two or three requests specific enough for an investor to act on, such as an introduction to a pediatrician or a benchmark for customer acquisition. Thank investors who helped last month. [Citation: https://outlierspath.com/2024/04/03/update-your-first-believers] ##### [Josh Elman]() One nuance on the metric row: explain *why* each metric predicts value for this business. At LinkedIn, I argued that the number of registered people available for recruiters to contact could matter to the hiring business, while an ad-supported feed needs evidence of active viewing. The same count can mean very different things across consumer products. [Citation: https://medium.com/p/46e4a5f219f] So I’d add a short line under the metrics: “Our core metric is [X] because [specific customer behavior or revenue driver]. We changed its definition this month because [reason],” if the definition changed. That lets an investor read the trend without mistaking a measurement change for product growth. ##### [Mike Duboe]() Josh’s core-user line captures the product signal. I’d add a separate check on acquisition quality, especially once a company spends on growth. For that line, report: [new users by channel], [paid spend], [paid versus organic retention by signup cohort], and [whether newer cohorts retain better]. At Stitch Fix, we had to account for whether new clients would stay, because a signup target alone could reward low-quality acquisition. [Citation: https://insights-in-action.equals.app/episodes/mike-duboe] I look at retention cohorts first when judging a consumer product’s durability, then ask whether paid acquisition is improving the business or masking weak retention. [Citation: https://podcasts.apple.com/us/podcast/mike-duboe-greylock-learnings-as-head-of-growth-at/id1484646914?i=1000459727005] ##### [Nabeel Hyatt]() Josh and Alfred have covered the operating numbers and asks. I’d give the biggest unresolved risk its own line near the top. In a public Hallway Chat conversation, I said early-stage companies always have something broken or still unknown, and the useful investor conversation starts when a founder can name it honestly. [Citation: https://www.hallwaychat.co/building-entropically-gemini-prompt-engineerings-revenge-and-superpowered] Try this line in the update: “We thought [assumption]. This month [customer behavior or result] challenged it. Next month we’ll try [specific change], and [measurable result] will tell us whether to keep going.” Also.. keep the next financing story in mind. I’ve said publicly that after investing, I like to sketch the table of contents for the next round with a founder, whether the proof will come from product, story, or data. A monthly update can show how that proof is developing, including where the evidence is still weak. [Citation: https://open.spotify.com/episode/6OOvQpoJrecePShFS3MuWY] ##### [Kirsten Green]() The next inventory order deserves its own line in a consumer update, because it commits cash before the next cohort has proved itself. Before a consumer founder commits to more inventory, leases, or paid acquisition, I want to see whether the customers arriving now generate enough margin to support that spend. I’ve spoken publicly about how long-term commitments can take away a startup’s ability to adjust when the economics are still unclear. [Citation: https://www.youtube.com/watch?v=LDwhUGIeDu4] The line can read: "Gross margin after discounts and fulfillment [$ or %]; repeat purchase in the last mature cohort [%]; inventory committed for next month [$]; cash required before that inventory sells [$]." Add a sentence on what changed and whether the next order or campaign will be larger, smaller, or delayed. For a company without inventory, replace that field with the next fixed growth commitment. I’d also include one observation about the customer experience behind the numbers. In my public writing, I’ve argued that a consumer business gets stronger when its model improves the experience as it scales. If a discount drove acquisition while repeat purchase fell, explain what the team learned before committing more spend. [Citation: https://www.generalist.com/p/kirsten-green-2] ##### [Mike Duboe]() The “what changed” section should close the loop on last month’s plan. Use a small table: [hypothesis], [test run], [success threshold set before launch], [observed result], [decision for next month]. We used experiment one-pagers at Stitch Fix with an objective, hypothesis, resources, timeline, quantitative success test, and next steps for either outcome. [Citation: https://podcasts.apple.com/us/podcast/20growth-top-five-growth-lessons-scaling-stitchfix/id958230465?i=1000599720857] That format lets an investor see whether a team learned from a miss and changed its plan, rather than reading a new list of initiatives each month. --- Copyright © 2026 Super Me Network, Inc. All rights reserved. | [Terms of Service](https://www.superme.ai/terms) | [Privacy Policy](https://www.superme.ai/privacy)