Optimal Work Daily - Career, Productivity and Entrepreneurship 1888: [Part 1] How do Great Entrepreneurs Choose a Capital Provider - Maybe Not the Way You Think by Mike Smerklo
Dec 1, 2025
Discover how entrepreneurs can rethink fundraising strategies. High valuations might distract from what truly matters in building a business. Mike Smerklo breaks down crucial factors for choosing capital providers, emphasizing the importance of understanding deal terms beyond just the price tag. He warns against being seduced by a firm's reputation and stresses the need for thorough research on how they support founders. This conversation challenges the typical mindset and aims to equip entrepreneurs with smarter decision-making tools.
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Reframing The VC Question
- Mike Smerklo describes being asked often how to get top VC or PE firms to invest in a business.
- He reframes the question to focus on which aspect of raising capital will most impact building a superior company.
Valuation Is Only One Piece
- Five aspects of the capital raise matter beyond headline valuation and many founders focus on only one.
- Missing the other four means missing opportunities to add more than cash to the business.
Know What Drives Your Valuation
- Understand valuation as the pre-money price at which you sell stock when raising new capital.
- Research what metric drives the valuation so you know what investors are paying for.
