20VC: Fundraising Wisdom that is Total BS; Dilution, Meeting Associates, Taking the Highest Price, Always Be Raising | Why Second Time Founders Are More Investable & Why Not To Hire People Out of College with Dan Siroker, CEO @ Limitless

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 15 May 2024

⏱️ 76 minutes

🔗️ Recording | iTunes | RSS

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Summary

Dan Siroker is the Co-Founder and CEO @ Limitless, a personalized AI powered by what you’ve seen, said, or heard. For his latest funding round, Dan took an unusual approach resulting in 1,000 preliminary offers with valuations as high as $1BN — and resulted in a $350 million Series A valuation. Prior to founding Limitless, Dan was the Founder of Optimizely, scaling the company to $120M in ARR and raising from some of the best in the business including Peter Fenton @ Benchmark who led the Series A.

In Today's Episode with Dan Siroker We Discuss:

1. Serial Entrepreneurs are More Investable:

Why would Dan always prefer to invest in serial entrepreneurs than first time founders?
How do serial entrepreneurs approach team building and size of team differently?
How do serial entrepreneurs approach focus and prioritisation differently?
How do serial entrepreneurs approach pivoting differently to first time founders?
What is Dan's advice from Elad Gil and YC's Dalton Caldwell on when to pivot?

2. The Secret to Fundraising: How to Speak VC

Should founders always be raising?
What is the right thing to respond to investors when they reach out to you outside of a round?
What question are investors really asking when they ask, how much are you raising?
How should founders approach valuation, what should they say when they are asked for it?
How can founders create urgency in a funding round? What works? What does not?

3. How to Raise the Best Funding Round:

Should founders engage with associates or only worth it with decision-makers?
Why should founders always choose the investor who is on the early arc of their career?
Why was Dan's first meeting with Peter Fenton the best meeting he has ever had with a VC?
Why does Dan believe that taking the highest price is never the right answer?
To what extent does having a true Tier 1 VC lead your round, change the game for your company?

4. Dan Siroker: AMA:

How did becoming a father change the way that Dan operates?
Why is Dan scared we might see technological progress stall for the next 20 years?
Why did Dan not do YC the second time around with Limitless?
What is the story of how Optimizely nearly bought Amplitude?

Transcript

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0:00.0	I very much believe you should either be in fundraising mode or not. Always saying the highest price is almost certainly going to be a mistake. When an investor asks, how much are you raising? More often than not, they're actually asking, how much do you think you're worth? And let me, let's start the negotiation on valuation right now because 20% is what they want. If you say, you know, we're worth, yeah, we're raising 10 million. They just take 10 million divided by 0.2 and then that's what they think that you think your valuation is. This is 20 VC with me, Harry Stebbings, and I think this is the most tactical show that we've ever done on fundraising. This show happened after me and this guest disagreed on funding round dilution amounts on Twitter. How nerdy can you get? And I'm so glad we did
0:38.7	because this is one of the best shows we've done on fundraising. So I'm thrilled to welcome Dan
0:42.6	Siroka, co-founder and CEO at Limitless. For his latest funding round, Dan took a really
0:47.2	unusual approach resulting in a thousand preliminary offers with valuations as high as a billion
0:52.9	dollars and resulting in him taking a
0:55.0	$350 million Series A valuation. Now, prior to founding Limitless, Dan was the founder of optimizely,
1:01.6	scaling the company to $120 million in ARR, and raising from some of the best, including Peter
1:06.4	Fentonet Benchmark, who led the Series A. But before we dive in, let's face it, your employees
1:11.6	probably hate your procurement process. It's hard to follow. It's cobbled together across systems,
1:16.7	and it's a waste of valuable time and resources. And as a result, you probably are facing
1:20.9	difficulties, getting full visibility, managing compliance and controlling spend. It's time for
1:26.2	a better way. Meet Zip, the first
1:28.4	modern intake to pay solution that can handle procurement and all of its complexities, from
1:33.2	intake and sourcing to contracting purchase orders and payments. By providing a single
1:38.1	front door for employee purchases, Zip seamlessly orchestrates the procurement process across
1:43.2	systems and teams, meaning you can procure faster with the procurement process across systems and teams,
1:44.6	meaning you can procure faster with the least amount of risk
1:47.5	and get the best spend ROI for your business.
1:50.5	With over $4.4 billion in savings for our customers,
1:53.7	Zip is the go-to solution procurement for enterprise and industry disruptors,
1:57.9	like Snowflate, Discover, Lyft and Reddit.
2:00.4	Finally, a solution employees love
	...

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