I raised money by cold DM-ing a VC on Instagram

TLDR: DM-ed a VC on instagram and said: "Hey I'm building https://learningloop.org and raising $70k, $30k committed. Interested?". We had video calls on instagram daily for the next 7 days until we signed a deal.

Hello IH community :) my name is Sina and this is my first post, hope it'll be valuable to some of you.

I'll first share my startup story from before the fundraising and then go on to share a bit about my fundraising struggle when i first attempted doing it, and then finish with the VC funding that i landed thru instagram.

If you have any questions just leave a comment, i'd be more than happy to share more.

Before fundraising

about me

I'm a first-time founder from Iran, living in Singapore now. I'm a computer science grad and prior to this I worked as a product manager at 2 different tech companies in Malaysia.

I moved to Singapore in early 2021 to join a co-founder matching program called Entrepreneur First (https://www.joinef.com). They got me a 1-year entrepreneur visa in Singapore and paid me a S$5k/month stipend for 3 months, which was basically all I needed to start my company (cash and a tiny bit of capital that'd buy me sometime).

By the time I moved to Singapore my net worth was literally $0 so the S$15k that i got from that program was my entire runway. So I lived on S$2k a month (in Singapore, a fresh grad junior SWE easily gets paid 4-5k a month).

I didn't find a co-founder thru EF but i made 20+ founder friends whom i'm super close with now and we hang out every other week and keep each other accountable and sane. So after the program, i decided to launch an MVP in a facebook group that i've been active in for some years now (it's a facebook group of software engineers in Malaysia. i used to attend and organise hackathons and do a lot of community building before covid so i'm sure a lot of you can imagine where that fb group fits in my life).

what was my MVP and who was my audience?

A bit of context: i'm obsessed with learning and education and it makes me sad that most people live a lifetime and die without knowing what it is they can love and be great at. especially at a time when all the knowledge in the world is available on the internet. to me, that's not people's fault, it's just that there's too much knowledge to consume and most people aren't great at filtering knowledge or learning new skills alone.

Anyway, I had a specific audience in mind. Mid-level software engineers in Malaysia. Most engineers are introverts. There's a shortage of senior engineering leadership and talent in Malaysia because by the time you become senior, you work for companies outside of Malaysia that pay in USD. So if you're a mid-level engineer in Malaysia, you're an introvert whose manager isn't senior enough and your company doesn't have a proper HR or career growth model; in other words: you're stuck in your career.

That makes really bothers me on a personal level so I thought I'd focus on that audience. I built and shipped a landing page with webflow that said:

Career growth playbook for mid-level software engineers in Malaysia + 6-week cohort, registration opens now and closes in 48 hours, only 100 seats available

Posted this in the facebook group in the morning and by 4pm i got 102 sign ups and closed the form haha

what was special about this?

i was running this without hiring a teacher (or without me being the teacher) and without producing content. my hypothesis was that people would learn from each other if they had the same intrinsic motivations and were given some high quality curated content from the internet written by people more competent than themselves. If correct, this would mean i could help anyone learn anything by just matchmaking existing people and content, at scale.

4 weeks into the 6-week experience (that i was running on discord), 84% of the users were still active and doing their weekly task (i made the experience in a way that every week you'd have to do something to make it to the next week).

Week 5 i went broke ($50 left). this was 6 months after i moved to Singapore. Borrowed $1000 from a friend and told her I'd either get a part-time job or raise a bit of money in 1 week to return the cash.

Why did I raise money?

For the longest time I had this belief that I should only raise money to scale a company and not to start a company. But then I was broke and my company wasn't gonna make enough money to. I could imagine ways to get sponsors or ads from a few tech companies to fund a few more months, but the risk of that was that I'd end up going too deep in that audience (SWE) and not get to work on building a universal learning app that helps anyone learn anything (maybe also a limiting belief, or maybe a good conviction).

how was my fundraising journey?

It started off rough with tons of rejection. I had never talked to investors so I had no clue what they cared about (definitely not about anything I cared about at the time, until I became slightly better at aligning our incentives).

Then 1 founder friend once casually told me over lunch that he'd invest in Learning Loop (my company). He's in his early 30s and most people that I knew who were in their early 30s didn't have cash so I assumed he was being hypothetical..like "oh if i had money i'd invest in Learning Loop." so the first time he said it, i just nodded and continue eating. Then he said it again :D and i was like "invest how?" and he was like "invest money". I was like "oh you have money? how much do you invest?" he said "US$5k to 25k usually". I asked him "can you invest 25k in learning loop?" and he said yes. then he explained SAFE notes to me and all that (i knew nothing about it).

the next day he asked another mutual friend to invest, and that guy did $5k. I felt pretty lucky!

I then spent some weeks continuing where I'd left off, and building a prettier landing page. but then people started telling me that $30k wasn't enough and i should raise more, and i learned they were right. So I spent a month cold messaging investors on linkedin and attending group zoom calls where you pitch to 20 investors (never do this please), and it was ego crushing :D rejection all day every day, one of them even told me i should just get a job. i had to write myself some words of affirmation on sticky notes and stick it on the wall the next morning to get out of bed.

Getting help from a friend who worked at a VC firm

I concluded I sucked at fundraising and started asking for help. A friend told me i should have a one-pager and a financial model in a specific format, and sent me hers as an example. I cloned them and made my own on Notion and Google Sheets.

Another friend who runs a series A startup sent me this article by paul graham http://paulgraham.com/fr.html where he suggests lowering your ask to show urgency (e.g. if you're raising 150k but you've raised 30k so far, say you're raising 60k. when you reach 60k, then aim for 120k. he says this isn't lying, but u temporarily dropping your expectations).

These 2 things changed things for me i believe. I was able to articulate the value generation and capturing potential of my business better, and have a clear ask and present it confidently.

Raising in instagram DMs

At this point I'd learned that I should call people that might be angels and ask for "fundraising advice" as a way to get them to invest in my company. Talked to 4-5 and none of them had much money to invest (since they were in Malaysia and the currency difference is huge) but they all said "you should talk to <VC name>". all of them pointing to a specific guy that i knew of. So in the end after everyone said that, i decided to find a way to connect with him personally. i'd cold emailed him and never heard back, and he hadnt accepted my linkedin connect request so i couldnt message him. Checked his twitter DMs = closed. Checked instagram DMs = open :p

Sent him a DM expecting i'd never hear back (i never heard back from Garry Tan or Justin Kan and others :D), but he replied the next day and said "dude this is super cool, do you have a deck?". I sent my one-pager, he video called me the next day. we talked for 45min and he asked me a ton of questions about why i was doing this, what my insights were, who i knew, who i'd worked for/with, where i wanted to go with this idea and etc.
He understood a lot of my insights since he'd personally built social products before and was admin of a few fb groups.

but then he was like "i know you're asking for 40k but we've never written a small check like that. i can talk to my team and consider investing 50k now and leading your next round, or we invest 300k now and lead the next round and help you grow the company?"

i'd previously calculated 3 risk taking scenarios (how i'd spend 70k, 120k and 250k) but i didnt expect he'd offer that much. so i took a day to think and talk to my coach and get feedback on the terms, and then i said yes and a week later we closed the deal. some of the money came in the week after, and the rest came in a month later (they communicated it in advance and i was cool with it).

That's all :) thanks for reading, let me know what you think (if you're fundraising, i wish you all the best. it's hard and exhausting but you can do it. I believe in you!)