Just over a third (35%) of founders who responded to our survey have been involved with raising venture capital at a previous company, and this additional experience seems to have a meaningful impact on what founders look for in VCs. 

Whilst both categories of founder rated the fund’s understanding of the company sector as the most important factor, it was more popular amongst first-time raisers (chosen by 57%) than those with experience (45%).

Experienced founders were almost half as likely (10% versus 19% of respondents) to consider alignment with fund values as an important factor, and almost twice as likely (23% versus 12% of respondents) to pick the track record and brand of VC as important, compared with first time raisers. 

We’re apprehensive, however, to draw a clear causal impact here. Founders that had been involved with raising funding at previous companies were more likely to have raised a larger amount of capital for their current company and, as we’ve seen in the previous chapter, this also appears to have a significant impact on what a founder looks for in VCs.

Side note:

This ties in with one of the most common pieces of feedback we receive from our founders: ‘“I wish I had raised just a bit more when I could have”.

On top of that, second-time founders are more attractive to investors, given that they have a successful track record that makes them seem a safer bet, and therefore may find it easier to raise larger sums.

"Have you previously been involved in raising venture capital at another company?"/"How much investment has your company secured so far?"

So let’s take a look at the most populous investment range:< €500k. The fund’s understanding of the company sector is still an important factor across both levels of experience who have raised <€500k for their current company.

But for founders who have experience raising VC before, the fund’s ability to get the deal done quickly is just as important, and ties for first place. These founders also value the fund’s ability to back them in future rounds, the track record and brand of the VC, and the diversity of the fund team more than first-time raisers. Help expanding into new markets, and help hiring talent were valued significantly less than first-time raisers.

“Understandably, founders who have no prior experience raising VC are more apprehensive to just get the deal done, and might underestimate how long it actually takes to close a round, whereas experienced founders know the circus and are (hopefully) eager to get the round done and get back to building.

Founders who have raised VC at previous companies are also likely to have some experience hiring teams and even expanding into different markets, so it’s good to see that they are placing more value on aspects that are less in their control, like a fund’s track record, and even the diversity of the investment team”

Lauren Kang

Senior Associate, Frontline Seed
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