Texts with Founders
Check Size Doesn't Matter (Audio Edition)
Jan 30, 2024
Angel investors Ashley Mayer, Packy McCormick, Sander Daniels, Patrick McKenzie, and founder Ryan Delk discuss rethinking minimum check sizes in fundraising. They highlight the value of small investors in building momentum and making introductions, emphasizing the need to optimize the startup's cap table.
05:43
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Quick takeaways
- The size of an investor's check is relatively unimportant compared to their expertise, network, and legibility on the cap table.
- Bringing on smaller investors has become less complex and costly due to the use of safes and RUVs, allowing for bundling investors and prioritizing the best people on the cap table.
Deep dives
Forget Minimum Check Sizes in Fundraising
One common assumption about fundraising is the need for a minimum check size, typically between $25,000 and $50,000. However, this belief persists from an outdated era when onboarding new investors was more costly. The focus should be on optimizing for people with relevant expertise, network, and legibility on the cap table. Expertise helps in specific areas, network connects to investors and potential customers, and legibility impacts how other investors view the company. The check size of an investor who brings these qualities is relatively unimportant, as smaller investors can still be valuable and contribute significantly to funding rounds.
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