How to Raise a Pre-Seed Round with Kaben Clauson

Introduction: Meet Kaben and The Fundraising Debrief Podcast

Kaben was the first guest on our new podcast, The Fundraising Debrief, joining us after his successful pre-seed fundraise for his company, Base, to impart wisdom gained from a career building startups. Kaben is a repeat founder and Y Combinator alum based right here in Miami. The following is a summary of the main takeaways from the podcast. Be sure to check out the full episode and follow us on Linkedin for more highlights from every guest.‍

Navigating the Early-Stage Startup Journey

Early-stage startup founders are thrown into a whirlwind of tasks, from product development to team building, and perhaps the most daunting of all, fundraising. The fundraising journey can be a complex and challenging process, but with the right mindset and approach, it can be a transformative experience that propels your startup to new heights. 

Leading with authenticity is paramount to every aspect of your startup journey, especially when networking and building relationships. Authenticity fosters trust, which is the cornerstone of any successful business relationship. When you're authentic, you're not just selling a product or a service; you're selling a vision, a passion, and a commitment to making that vision a reality.

Building Authentic Relationships with Investors

Of course it's important to make a good impression on the first call, but don't feel pressured to have an answer for every question. Authenticity also means acknowledging what you don't know, and being open and honest about both the good and the bad. Trust investors to be able to right size the advantages and challenges of the business. They want to know that they're investing in a founder who is not only passionate but also realistic and pragmatic.

When it comes to raising money, it's best to think ahead and meet investors months in advance. This approach allows you to establish a relationship with potential investors before you need their money. It's about forming a business partnership, not just securing a financial transaction. 

Understanding the dynamics of power in the conversation between founders and investors is crucial. Remember, you're not just asking for money; you're offering an opportunity. Show the investor your passion and vision for the business. Cast a big vision and create a belief that you can provide the investor with the deal of their lifetime. At the same time, have empathy for the investor's side and understand that they are trying to return their LP's money.

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Mastering the Fundraising Process

Running a tight fundraising CRM process and having key revenue insights at your fingertips is essential. Make sure that you articulate your business's financial health clearly and confidently. When presenting a business proposition, be friendly, gracious, and humble.

Pitch decks are an art form and take time to perfect. Remember, a deck is a teaser document, not a design document. It should pique the investor's interest and make them want to learn more. Investment memos, on the other hand, should demonstrate thoughtfulness about the problem you're solving and the solution you're offering.

In today's digital age, Zoom etiquette is important. Make the meeting more casual and interactive. Simplify your ideas to make them easier to understand. The “Mom Test” is a good way to test your ideas: if your mom can understand your business concept, chances are, so will your investors.

Leveraging Social Capital and Embracing Failure

Social capital is an important concept to be aware of during the fundraising process. Having introductions from a portfolio company or a respected founder can give you a significant advantage. Don't be afraid to seek out the opposite of consensus. Challenge ideas with friends and be inspired by rags-to-riches stories. Have the courage to try, fail, and learn from failure. 

Finally, remember that fundraising is not just about securing financial resources; it's also about building relationships, learning, and growing as a founder.