Oct. 4, 2024

256. Choosing the Right Investors, feat. Sunny Han, Founder & CEO of Fulcrum

Show Notes
Transcript

Text your thoughts directly to Rich.

Sunny shares his lesson on how he would choose investors.

About Fulcrum
Fulcrum applies modern technology to manufacturing processes, helping makers focus on their craft and grow their businesses. The innovation of American manufacturers is critical to a better world, and Fulcrum aims to revitalize the industry with automation software.

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast - get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.

Transcript

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I think that I overcomplicated the process of choosing a fund.

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I had this whiteboard that filled with every single permutation.

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I'm a math nerd, right?

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And I was trying to optimize for a bunch of factors that really didn't matter.

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I thought more VCs is better.

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Everybody has their own network.

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Well, it turns out you all kind of have the same network.

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Especially as it relates to Series A companies or VCs I wanted more voices around the table.

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Well, actually it was just a lot more work to maintain relationships with all these different funds.

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But for me, I was filled with three sets of emotions.

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The first was gratitude.

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I was super grateful to Matt for making a lot of those introductions.

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I was super grateful for the first person that gave me a term sheet that said,"Hey, you're closer than you think.

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I'm going to give you a term sheet just to test the waters" and what happened actually happened.

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I was super grateful for all the conversations that I had about all the promises of introductions and all this stuff.

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There were large firms.

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large tier one, top five VCs that wanted to throw in a million dollar check into a three million dollar round, that swayed me a lot.

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But there were, all these different forces, there was gratitude, there was greed of relationships and how many people, and then there was also like, temptation, potentially, or seduction, if you will, of having somebody on board.

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I think, in retrospect, none of those things really actually mattered.

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what actually mattered was the people that I had the most valuable conversations with during the fundraising process ended up correlating very directly with the people that I continue to have very valuable conversations with.

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The people that weren't actually interested, but were just trying to maybe make an index fund of seed stage companies that they could get information about.

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Some of them were valuable, some of them were not, but I think that, the desire to fit everything in increased the size of the round from 2 million, 3 million, increased the dilution that we had and increased the number of people that we had to do compliance reporting with every quarter and every year.

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if there's one thing that I would go back and say is I would try to simplify it, choose one single investor that if they didn't invest, I would have been really upset about.

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And then choose two others that I think that they would worked well with that I also wanted to include.

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And then limit it to that, no matter what size the round was.

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Because I think what I didn't realize was, I get to choose how I spend that money, and I'm going to try to spend more money if there is more money, because I'm going to believe that I can go faster if I can deploy more dollars, but that's not necessarily true.

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And that the partners around the table are far more valuable than the dollars at that stage.

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And I don't know that I can go back in time and even convince myself.

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Like, if I went back in time and said, Hey, this is Sunny from the future, the dollars don't really matter, it's the partners that matter.

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I've read that.

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there's like this Extremely bone shakingly visceral sense that that's true, but I don't know how I would have communicated it to my old self.

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We'll pick up the rest of Sunday story next week.

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As always, time is our most precious asset.

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Thank you for spending some of it with me today.

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Before we wrap up, let's delve into what sets AVL Growth Partners apart.

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AVL's team brings significant years of finance and accounting expertise.

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They ensure your path to success is crystal clear.

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AVL starts with a comprehensive business evaluation, uncovering opportunities and mapping actions to both your short and longterm goals.

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Their evaluations are crafted from over a decade of experience pivoting companies from growth to scale.

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If you want to take your company to the next level and need the experience required to make it happen.

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256. Choosing the Right Investors, feat. Sunny Han, Founder & CEO of Fulcrum

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