Jason Yeh created Adamant Ventures more than 15 years ago, as a young twenty-something As he came out of the Tape exit, trying to figure out what to do next, Jason started taking calls with founders, offering his expertise for anything they needed help with. He found that nearly 90% of the questions founders asked him had to do with the confusing nature of fundraising.
As a result, Jason developed the formerly dormant Adamant Ventures into a small media company “focused on creating content that supports and educates founders around their most difficult challenges.”just getting into web development.
“I created the name because I thought it was cool,” he says. “I had no idea what venture capital was, barely knew what tech startup was at the time.”
But he kept the name alive as he dove into venture capital and startups, first as an investor at Greycroft Partners and then as a co-founder of mobile video stories platform Tape, which sold to messaging company Hustle in early 2021.
On an episode of How I Raised It, Jason talks about which founders find value in Adamant’s offerings, which misconceptions can trip up founders trying to raise capital and why he puts so much emphasis on preparation.
Preparation is key
Jason estimates that 98% of the people who interact with Adamant Venture get his support for free. He offers a free weekly newsletter of his thoughts on startup development and a podcast, Funded, that follows the twists and turns of founders’ journeys through narrative interviews.
For those select few looking for additional support, Jason created a five-week fellowship program called Fundraise With Confidence. Most of the participants are founders who have raised before and see the value of having expert support, accountability and community in the fundraising process.
The program focuses heavily on preparation, with the idea that at the end of five weeks, participants are able to launch right into fundraising.
“A lot of people rush into what they do,” Jason says. “I believe there are predictable things that a founder can do to really improve the efficiency and effectiveness of a fundraise.”
He tells program participants that the behind-the-scenes preparation isn’t always visible to those watching from the outside
“The raises that are the quickest on paper probably took the longest to prepare for,” he says, “either explicitly, in terms of coming up with lead lists and identifying how you’re going to get introductions, or just over a number of years of a career building up a track record.”
Myth-busting: Where founders get fundraising wrong
Part of Jason’s work is correcting some foundational misunderstandings about fundraising, which he says often shows up in two ways.
First, founders see fundraising as a “song and dance” effort that takes place completely separate from the work of building the company.
“I believe the best fundraising is demonstrating that you are a great company and that you’re worth betting on, and then doing everything you can to have investors discover that,” he says.
Anything you do to prepare for fundraising — such as taking a deep dive into why it is you want to have a venture-backed company — is something you should also do because it’s good for your business.
Second is understanding the true nature of the investment process — namely that there’s no algorithm or formula that can guarantee you’ll get funded.
“If you understand that early stage fundraising and early stage investing is not about the very specific details, but an aggregation and a combination of a ton of signals to try to come up with the best possible decision of whether or not to invest,” he says, “that's when you start understanding how the important things around process play into actually getting to a successful raise.”
Achieve ‘calendar density’ to generate investor FOMO
One of Jason’s core concepts is what he calls “calendar density,” which is the idea of packing your investor meetings into a tight schedule that builds excitement and momentum.
“If you can create a set of circumstances where investors believe that people are interested, that is when things start going off in their heads around losing deals, getting excited about deals, ‘FOMO-ing’ and whether or not you could be the unicorn that returns in a fund,” he says.
He recommends scheduling three to four meetings per day, at least four days a week, for two weeks.
And while he says it’s not necessary to stick to rigid tiers of investors when you make your schedule, you can strategically place a few of your least exciting meetings earlier on and push your top-choice investors to day three or four.
Find your one true believer
Although momentum is vital for making deals happen, Jason says founders should resist the temptation to exaggerate or overhype the interest.
“When you're trying to build a lot of pressure and excitement around your thing, you are going to want to tell the best story that you can tell, and you're going to want to push the envelope, but you just don't lie,” he says.
Instead, find your one believer — one person who shows support for your idea and who can “start the momentum train.” This believer can be a committed angel investor, a published article about your startup or anything that points toward the momentum.
“Once you have that, then you’ll have done all your organization so that you can line it all up and keep going,” he says.
Lean on warm introductions, but be ready to fill the gaps with cold outreach
“Introductions are the lifeblood of successful and great fundraising,” Jason says. “Investing is not a science, and so you’re looking for every credibility signal that you can, and I think an intro is one of the most important and effective ways to do that.”
Founders should be aware, however, that reaching out for intros will eventually produce diminishing returns as the degrees of separation widen further down your list. If it’s going to take multiple intros to get to the investor you’re targeting, it’s time to pull out a great cold outreach email.
Invest time in developing your narrative — and get feedback along the way
Narrative development is one area where Jason feels that founders should spend more time, and it’s not just about telling a great story.
He says, “Coming up with the right narrative that you’re going to tell the world you believe in is your exercise in making sure, like, Hey, have I done enough customer development to make sure that I’m super committed to this path forward?”
Once you develop your narrative, the next step is to get feedback from people outside your company.
“As you get committed to the story,” he says. “your ability to tell a really concise story that hits home and that people understand right away and get excited enough to lean in to ask more questions is going to be really handicapped by the fact that you are so close to your own business.”
Find other founders or friendly investors to take a look at your pitch deck and offer feedback. Established accelerator programs can also provide this support.
Jason says that even with experience as a VC, “I was a terrible first-time founder. I made every mistake in the book, and the only reason I’m able to be a good advisor now is because I know what the pitfalls that I fell into were.”
The biggest pitfall? Again, it’s all about being prepared.
“The biggest mistakes I see — and have made — have just been when founders wing it and when founders feel like they can just like spend a little bit of time here and there and be successful because they've seen a friend who raised in a couple weeks,” he says.
“Find tools, find structure, find organization that allows you to be more successful when you fundraise,” he adds. “The little money that you invest buying software or being part of a program will pay off like crazy when you get to the end of the rainbow.”
Nathan is also the CEO of Fundingstack.com which is a new platform for VCs and investment bankers to both raise capital and assist clients and portfolio companies.
Users of these platforms have raised over $9.7 billion since 2016.
This article is based on an episode of Foundersuite’s How I Raised It podcast, a behind-the-scenes look at how startup founders raise money.