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

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

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May 15, 2024

Dan Siroker, Co-founder and CEO of Limitless, shares his insights from his experience scaling Optimizely and securing a massive Series A valuation. He emphasizes that serial entrepreneurs are often more successful, highlighting their advantages in focus and team dynamics. Fundraising tactics are dissected, including how to create urgency and respond strategically to investor inquiries. Siroker also discusses the importance of understanding equity, navigating the AI investment landscape, and balancing parenthood with entrepreneurial ambitions.

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ADVICE

Serial Entrepreneur Advantage

Prioritize backing serial entrepreneurs over first-time founders.
Serial founders possess valuable experience, better networks, and increased perseverance.

ANECDOTE

Benchmark's Flexible Investment

Dan Siroker got Benchmark to invest in Optimizely's Series A for under their typical minimum ownership.
This was possible because the company was performing well, allowing Siroker to negotiate effectively.

ADVICE

Negotiation Tips

Be willing to compromise on valuation during fundraising negotiations.
Empathize with investors and give them wins to build a positive long-term relationship.

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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?