How I raised 2 million pre-seed in 5 weeks (with no raising experience)

Early Struggles

The first time we tried to fundraise was too early. Identifying the problem we wanted to solve, we thought, "Great, let's approach investors." This was a mistake:

• We faced rejections from YC and Neo accelerator and approached unsuitable investors.

• We once pitched to a science-focused investor who misunderstood our "no code" slide, asking how we were planning to build software without code. Clearly, we were off track.

• During investor calls, we found ourselves adjusting our ideas based on what investors were telling us, which is totally the wrong way around.

Note: You should know more about the problem than the investors and be confident in your approach and understanding of the space. Otherwise, it's a red flag, and they won't trust your vision.

Taking a Step Back

We paused fundraising and spent the next few months focusing on:

• Engaging with industry experts and potential customers to understand the problem and identify gaps.

• Gaining valuable insights from leaders in the industry, which shaped our foundation and led us to session replays.

• Confirming we had spoken to the right people and received validation.

• Identifying our approach and establishing our hypotheses, which would become the pillars of how we would be the ones to get it right.

Note: Your hypothesis about the space is the bet you're making, and that's what VCs are investing in. So, before you make that bet, ensure you're 100% confident you've covered all bases.

For instance, this is Autoplay's hypothesis:

• Users don’t know what they don’t know.
  (They don’t know what the software can do, so they don’t know what to ask your chatbots in the first place.)

• Users don’t want to be told what they already know.
  (This is why tutorials and product tours get skipped.)

• Users are always more sensitive to information that comes from their peers. (Offer peer-based software guidance; users may choose an approach that is peer-based (because it's from their peers) over an objectively optimal AI-proposed flow.)

• The video game industry has solved adoption, and we should apply their best practices.

No VC or investor was ever able to argue with any of these points, and they felt confident in our approach—very clear and solid.

The Actual Fundraising and How to Do It Correctly

Step 1: Target the Right VCs

• Focus on VCs with portfolio companies that could become design partners. Our lead VC invested because we collaborated with one of their top portfolio companies. They contacted the company, who confirmed interest in our product, leading to investment.

• Avoid targeting large firms like Sequoia at the pre-seed stage; you're likely too small to stand out.

Step 2: Meet All the VCs in One Circle at Once

• VCs discuss potential investments with each other. Engage with multiple VCs and focus on a specific group. We started with the Paris VC circle, creating positive buzz. Schedule meetings closely together to build momentum and become the talk of the week.

Step 3: Run the Investor Calls the Right Way

• Be clear about your hypothesis. You're making a bet, and VCs are investing in that bet. Clearly define your unique approach and why others aren't addressing the problem as you are.

For investor calls, this template worked really well for us:

• This is the problem we are solving.

• This is why it's worth solving now.

• These are the insights from the industry leaders who have spent time with us.

• These are our four hypotheses.

Note: Our solution may evolve, but it will always be based on these hypotheses—this is our market bet, take it or leave it!

• Stand your ground. If they disagree, they're wrong because, by now, you're the expert!

Step 4: Create FOMO

• Generate a sense of urgency—make your funding round seem exclusive. Indicate limited availability or a deadline. VCs may wait; you need to encourage them to act.

Step 5: Don’t Be Scared to Negotiate

• Be confident in your negotiations. You have the expertise and validation to support your position.

Summary

• Speak to high-profile people and tell VCs where you're getting your insights.

• If you don’t have an existing network, you’ll need to learn to be really good at sales, LinkedIn outreach, and getting the attention of senior people at companies you would potentially sell to, as we did.

• Develop your unique approach to the problem you are solving, become skilled at defending it, and clearly define your hypotheses.

• Target VCs with portfolio companies you can work with and get them to become design partners. Our lead investor believed in us because they contacted their portfolio company we were working with and got their validation and thumbs up.