Note: This only relates to SAFE financing

We recently just wrapped up raising a bit of money to continue to build out Tether. I’m really excited, mostly because I can get back to building software to help other companies engage and delight their users.

At the end of the process I found that I had learned a ton, and wanted to get ideas down quickly. So this guide (if you could call it that), is one part me writing things down so I don’t forget for next time. One part trying to put real info out in the world that could help other founders. I found a lot of advice and resources to be either outdated, or not from someone who actually raised money recently.

If you are a founder or investor and disagree or think I’m missing key details, let me know. I’d love for this guide to be as helpful to as many people as possible.

Alright, let’s raise some money.

📔 Guide

🟢  Start before you start

We could all benefit from building out our network with great people that we can learn from and help.

Trying to raise money with 0 network is really difficult. Luckily, anyone can start working on their network today.

Things that worked well for me:

  • Connections from my previous company. I used to run a dev agency and built out a long list of clients, teammates, and collaborators that liked working with me
  • Going through I would 100% recommend Pioneer to any founder. Whether it’s Pioneer, OnDeck, or YC, these accelerators can provide a big boost to your network.
  • Launching on Product Hunt

Twitter is another great place to connect and grow your network. My Twitter game is lacking. Even with that being said, when our raise was nearing its end, I was able to close an angel through Twitter, and got several pitch calls this way.

The key thing with all types of networking is being genuine, shortcuts don’t really work here.

If you have a network, let them know you’re raising. Send out a tweet, drop them an email. People can’t help you if they don’t know what you’re up too.

Alright, now we can actually start trying to nail down some numbers

💯 The numbers

For early stage funding, there are just a few things to have nailed down before jumping in.

  • How much do you want to raise
  • Who do you want to raise from
  • What type of round

💸 How much?

I found there to be a lot of empty content out there when trying to research how much to raise. Here is something a little more quantitative.

Raise = (burn - revenue) *20

Take the difference between your monthly burn and revenue, and multiply by 20. General rule of thumb is to raise enough capital for 18 months of runway. Those extra two months account for items that your back of the napkin math omitted (legal, accounting, compliance etc).

Figure out what you’ll need to reach your next set of milestones. How many employees will you need to build what's on your product roadmap? Need any capital on the go to market side?

Calculate how much burn it will cost you, and extrapolate that, and you got your number.

Okay, caveat time.

Every startup is different (obviously), and this advice is pretty general. Things like your background, the economy, industry, timeline etc can affect how much you want to/can raise. This rule of thumb is a starting point, and what we found to be helpful. You’ll have to write down your number yourself.


What if I can raise more than 20 months? The general advice is don’t do it, constraints breed creativity.

I saw someone mention setting different raise amounts, should I do this? There is even a PG essay about it
! (How to Raise Money-Paul Graham)

Yes, this is true, but from what I heard, this isn’t super common anymore. Read this Twitter thread from Yoni (@rechtman on Twitter).

🧪 Valuation

Luckily this one is pretty straight forward, you can rely on reliable market data for this one.

See what the latest AngelList market update is, and put yourself in whichever quartile you think you see fit. Going right down the middle is always a safe bet.

If you have a crystal ball and think you can see where the market is going in 12 months (maybe stop your startup and just do something around that power of yours), and want to adjust your valuation, go for it. Just know it will be harder next round.

Dan, you don’t get it, my startup is growing like crazy, these AngelList numbers don’t relate to us. See warning above. But good luck, more power to you. Even if I could’ve doubled our valuation, I probably wouldn't have. This round is one of many. This game is a marathon composed of sprints.

🎢 Type of round

There are generally 2 types of rounds. Rounds with a lead and rounds without.

  • Rounds with a lead: Generally one person (VC) puts in a majority of the round. They are now your most important investor and should feel as comfortable as a partner. This is someone you would want to spend long periods of time with. This is (hopefully) a ten year engagement you are getting yourself into.
  • Rounds without a lead (what we did): Sometimes called party rounds, these types of rounds have many people involved. Some may have 1% of the round, some may have 10%. You can’t expect these folks to take a bullet for you, but you can still count on them for help with hiring, product feedback, general guidance etc.

There are benefits to both. Our round didn’t have a lead (we set the valuation ourself), and I am really happy with who we were able to get. But maybe you’re a fintech startup and a big VC name will help you get through certain legal requirements. Maybe you’re a dev tools company and having 25 dev tool angels to help with product is what you need. Figure out what your ideal would be, and chart a path (it will change anyways).

Okay, now we have how much we are raising, the valuation and type of round. Now let’s move from numbers to faces.

👯 Who? Building your list

Who you get onboard is important. I know sometimes it can feel like “hey, I’d take money from anyone to get things going”, and that feeling is okay to have. The whole point about fundraising is to be doing it for as little as possible. But again, your company is a marathon and getting the wrong person on board could be a 10 year pain in the a**.

Now let’s get cracking on that list.

You probably have a few people in mind already. Create a Notion doc, Gsheet etc, and start adding every VC, angel, rich uncle, etc, that you have access to. Stack rank it, and now you’re off to the races.

The next step is gathering all the people/firms you want to chat with but don’t have access too. This was really time consuming for us, there are services like Pareto (we used and would recommend), that can help with some of this work, but some of this will fall on you.

Let’s look at a couple practical and actionable ways to build out your list with investors you can reach and find mutual connections with.

🍬 Crunchbase


Let’s build a quick list of active investors, investing in your space, and stage (geo too if you’d like).

  • Select your investor type (VC, Angel etc)
  • Select Industry
  • Stage
  • Lead investments→announced Date→after 6 months ago

📶 Signal


Signal is a cool tool from the folks at nfx. Basically it crawls your email, finds people that you have connected with and then checks to see if those people are connected to any investors.

Really helpful for sniffing out mutuals, which you can then leverage into warm intros.

❄️ Airtable of investors open to cold outreach

I’ve searched all over the internet and have a solid could outreach Airtable.

A general breakdown:

  • 140+ investors, including leads and those that have invested from cold outreach
  • Top 5 verticals: B2B, Productivity/Future of Work, Enterprise Software, SaaS, AI/ML
  • Early and growth stages: Seed stage, Pre-seed, First check, Series A, Series B

Want access? Follow me on Twitter and drop me a message!

📤 A cold outreach email template

Want access to the cold outreach template I used to raise from investors I never met? Follow me on Twitter and drop me a message!

Regarding tips for cold out reach, check out  Elizabeth Yin's (Hustle Fund) post on how to cold-email investors

🐦 Twitter

Keep an eye on Twitter. Angels, VCs, and founders might tweet threads that aggregate investors that may be on your list.

Threads like these:

Both of these threads had many replies from solid investors. Reaching out cold in this manner has a high response rate, and I actually closed an investor this way. Thousands of dollars in the bank, just from keeping up, and then putting in some cold outreach work.

💻 Dev tools angel list on Github

For the dev tools startups out there, check out swyx’s (@swyx on Twitter) list on Github. Hyper specific, high response rate. We even had an angel from this list join our round.

🤝 Meetings

Okay so you’ve got a mega-list, you’ve started to ask for intros or even reach out cold where applicable.

Couple of things.

I was pretty nervous going into this process for the first time, which is totally natural. Big VCs, transcendent founders, this is the big league. It can be intimidating, but in practice, everyone I interacted with was nice, supportive, and kind. That’s all you can really ask for. These people truly want you to succeed and take over the world, their fund depends on it. So be confident. They start on your side until there is reason to leave it.

It’s in your best interest to do as many of these meetings, as quickly as possible. This is easier said than done, trust me I get it. I wasn’t able to condense our process as much as I would’ve liked. But that is the goal. 4,5,6 meetings a day, 5 days a week if you can.

Condensing meetings means you will:

  • Get better at your pitch, quickly. Our pitch changed slightly after every early meeting. Think of it like iterating anything (copy, product, UX etc). For this reason, it makes sense to put some of your less important meetings at the front of your process.
  • Get back to what is important, your users.
  • Build on momentum. The more unavailable your are the better. Fundraising is commonly compared to dating. The less available you are the better (but maybe don’t make your Calendly artificially bare).

The earlier you can get offers in the better. It will make each subsequent yes easier.

So start with folks that are neither high up on your list, nor very likely to close. Dial in your pitch, then head over to whomever you think you can close the fastest.

The number one rule in this whole game is never lie. You never should anyways, but don’t try anything cute, these VCs have probably seen it all.

💼 A quick note on Safes and Pro Ratas

Firstly, read this. No excuse for not understanding the mechanics of how this all works. It’s a little complicated, but only a little.

While you technically don't need a lawyer to use the SAFE + Pro Rata Side Letter, it is still probably a good idea to consult with a lawyer. We got in touch with our law firm (Orrick) right before we started to raise. They basically told me to go ahead, but it was helpful to go through a few questions. We also executed a board agreement, prior to the raise. This can be done retroactively, but is a little cleaner when it is done ahead of time( I'm told).

If you really don't want too, technically all you need is your valuation, how much the investor is investing, and you're ready to sign.

None of this is legal advice.

✅ You got a yes!

Congrats, you got your first yes. Time to send the docs? Not quite.

You’ll want to do a quick reference check. Find some of companies they have invested in and reach out to the founder. I’ve seen that founders are very likely to respond to this type of email.

Once those references pass, it is important to establish a few things. After each verbal yes, I’d send an email like this.

This does a few things. It sets communication standards, which is hugely important. But it also helps kick start any intros that your investor can give. I liked giving a concrete number, as I found that helps people take action, faster.

In the case where an investor can’t intro you to others, I would be slightly weary. You spend a lot of work to onboard a single investor, and if they are a dead-end, that diminishes their value. Maybe it’s short-sighted, but that is something I kept in mind. Luckily, this rarely happens, unless you got some rich aunts and uncles (they should know each other I guess then?).

🌯 Wrapping it up

SAFEs are sent, wires are done, congrats! Now you can get back to what is important, your users. Feel free to bug me on Twitter if you need any help or have any questions. I am a beginner, but I can do my best to help.

This process will most likely be harder than you thought, take more time than you thought, and be more taxing than you thought. Not trying to scare you, but trying to prepare you. Paul Graham sums it up perfectly.

But you can do it! I did it, many others have done it, and many more will do it. Don’t make excuses for yourself, this is a game where you can get extremely far with brute effort.

🛠️ Resources & tools

📊 Deck + docs management

Docsend (built presentations just in Gslides)

🏓 List management


📶 Finding investors, mutual connections





Dev Tools Angels Github



💼 Legal

YC Safe Post Money, no discount

YC Pro Rata Side Letter