MFM Guide: Fundraising & Investor Management

Tips, warnings, and real talk from Sam, Shaan, and guests across 400+ episodes.

Before You Raise

  • Sam Parr: "If I were starting today I would not raise funding at all." He and the Morning Brew founders both agreed — for media companies especially, raising was a mistake. Sam made way more money because he failed to raise more and kept his ownership. Source

  • Only raise after you've put in your own money. Michael Girdley says it feels "yucky" to raise without personal skin in the game. He puts a substantial chunk of his net worth into every new venture before asking anyone else to. Source

  • Under $2M keeps all your options open. Jason Lemkin's framework: raise under $2M and you can still exit at $10-50M and everyone's happy. Once you take $10M+, you're morally locked into chasing a billion-dollar outcome. Source

  • Your cap table is a one-way door. Sam tells the story of a friend who sold his company for $1B but walked away with $3M. Too many co-founders, too much early dilution. Once equity is gone, it's gone. Source

  • Bootstrapping = strategic freedom. Not raising for an agency or services business lets you take profits and invest them into new things. Andrew Wilkinson did this with MetaLab — bootstrapped agency profits funded a holding company of acquisitions. Source

The Pitch

  • Fundraising should be informative, not persuasive. Sam Rattner's rule: pitch once. If you have to pitch the same investor twice, they didn't really want it. First impressions are 90% cemented in 5 minutes. The best investors call you back multiple times after the first meeting. Source

  • Your narrative matters more than your numbers. Justin Kan helped a friend at MessageBird who was doing $80M in revenue but couldn't get investor traction. Kan reworked his pitch narrative. Two weeks later: term sheet. Source

  • Lead with mission if you have one. Pat Brown (Impossible Foods) had a totally amateurish deck. His first 9 slides were about the mission. Slide 10 was the first mention of it being a business. He biked to Khosla Ventures from Stanford campus and still closed the round. Source

  • Three angles to open a pitch: (1) Shocking statistic that makes the problem real, (2) Compare to something known — "We're Amazon Go checkout for any store", (3) Personal story that shows why you care. Pick the one that's strongest for you. Source

  • Your deck probably sucks and you need someone to tell you. Shaan invested $50K in a company. When they asked for intro help 9 months later, their deck was terrible. His co-investor Sully sent 3 brutal emails in 45 minutes tearing apart specific slides. They iterated the deck daily before the raise. Get a blunt friend. Source

  • Polarize on purpose. Shaan's pitch deck philosophy: a good pitch tells a story that some people love and others hate. If everyone thinks it's "interesting," you've failed. You want strong reactions — the investors who lean in are your people. Source

  • Non-native English speakers face a real disadvantage. Sam and Shaan acknowledge it plainly: investors often invest on charm and communication ability. Having an accent or struggling with phrasing creates an extra hurdle even when the business is strong. Source

Investor Strategy

  • Take lots of small checks to build a distribution network. Justin Kan raised from ~100 investors at $100K-$500K each instead of a few big ones. This gave him a network where every VC in the valley had skin in the game and would refer customers his way. Source

  • Marc Andreessen spent 3 hours talking politics at breakfast before discussing the business. Amjad Masad (Replit) showed up to pitch a16z and spent the whole meeting on philosophy and world affairs. Some investors want to know who you are first. Source

  • Crowdfunding is a last resort signal. Shaan distinguishes two types: raising from your actual customers (good — Samuel Adams, Ben & Jerry's did this) vs. raising from random retail investors on a platform (bad — usually signals you couldn't get sophisticated money). Source

  • In down markets, founders are slow to adjust. Sam observed that when valuations dropped 50%+, many founders still anchored to old numbers. The smart ones took available money quickly as a buffer. The stubborn ones got stuck. Source

Angel Investing (The Other Side)

  • Think of yourself as an investor before you have the capital. Shaan passed on investing in Calm early because he didn't consider himself an investor yet. That would have turned $250K into $5M. Identity precedes action. Source

  • You can start with zero capital. Shaan structured his first angel deal (Lambda School) as a 10% carry — no money in, zero risk, 10% of the upside after the other investor was paid back. Find someone with capital who trusts your deal flow. Source

  • Source deals by using products, not scanning pitch decks. Shaan's best investments came from products he personally loved and then cold-emailing the founder, not from inbound deal flow. Source

  • Angel investing is an MBA replacement. You learn more about business sitting in on board updates from 30 companies than you do in a classroom. Shaan sees the education and network as worth more than the financial returns. Source

  • It's OK to pass on friends. Shaan passed on investing in The Hustle (Sam's company) even though he thought it would work. His reasoning: media companies don't produce the 100x returns that make angel math work. He was right about the business, but angel investing requires a specific return profile. Source

  • Naval got screwed by his VCs — and built Venture Hacks because of it. He disagreed with his co-founder, the VCs took the other side, and they bought his shares back for almost nothing. His takeaway: he put himself in a position where VCs could legally act against him. He spent years afterward educating founders so they wouldn't make the same mistake. Source

The Meta-Game

  • There's a company that literally photographs founders leaving VC offices to figure out who's raising. They station photographers outside Sequoia and Andreessen, offer to take "commemorative photos," collect company names, and sell deal flow intelligence to other investors. The information game around fundraising is its own industry. Source

  • Quiet companies win. AppSumo grew to $80M revenue over 14 years with almost no press. Card (website builder) had 2 people for 10 years before raising. The loudest companies on Twitter are often the ones burning the most cash. Source

  • Dominate one niche before expanding. Every successful marketplace (Poshmark, StockX, Grailed) won by owning one vertical completely before broadening. "When you appeal to everyone, you appeal to no one." Same goes for your pitch — investors want to see you own something small, not chase something huge. Source

Compiled from ~112,000 transcript segments and ~9,800 insights in the MFM Vault search index.