Raising $1M+ from VC’s

We’re mid-raise for Tacit Intelligence, and we’ve started to see our first term sheets roll in - we’ve crossed the 7-figure threshold.

For those new to venture capital, a term sheet is simply the terms you need to meet for which they’ll give you the money they’re offering.

There are so many variables in terms of getting people to invest in your idea, but here are the top three that have come up every single time we’ve met with a VC in the age of AI:

1. How does this platform scale? Everybody wants to know how this business grows and captures network effects
   
   Simplified: What is the method for capturing customers, and how does it become more valuable for every customer you add
   

2. When AGI arrives, what differentiates your business?
   

   Simplified: When AI gets so good that it doesn’t need us, what makes your company still feasible
   

3. Why are you starting with so many broad customer sectors?
   
   Simplified: We don’t understand who you are selling this to. You need to be more specific and target just one customer vertical

We burned through 9 separate VC meetings before we could answer these questions properly.

As soon as we answered these questions in a way that VCs understood, we’ve had people pitch us on how good a firm they are and how they can support our raise.

We missed a very basic rule of sales: answer the question.

People were telling us what they wanted to hear, but we weren’t listening.

How Elon Works

I’ve learned a lot by reading books about how others work.

Until recently, there hasn’t been much you could read about Elon. But now, with ex-employees speaking out on podcasts and books being written, I’ve finally learned how he works.

From what I gather, he has 10 core ideas.

These are my favourite three:

1. The first is bottlenecks: He focuses on the most problematic bottleneck in each company. And he just does that continuously for decades.
   

2. Then there’s the main thing: For each company and its areas, he uses a single metric to assess the performance of the entire company or its factions.
   

3. And when he’s problem-learning or problem-solving, he goes straight to the floor. Talking to his engineers.