Secret VC article drops tomorrow on StartMidwest, featuring insights from investors and founders.

Whoever wrote this Secret VC article: I adore you. There are some absolutely excellent points that every Founder, Angel Investor, and VC in the Midwest would do well to read! Some key items: 💡 Pre-seed can absolutely be pre-revenue <-- Love to hear it! 💡 There are some VERY good takes on the angel investing environment in the Midwest. "Good angels literally write their checks on a vibe" 💡 The "closet bankers" line is fantastic. Although while I agree that VCs aren't, there are certainly plenty of reasons why founders may feel that way.... 💡 Multi-year projections in a Seed pitch deck don't make sense. <-- 1000% agree here. It's all a guessing game early on and makes no sense to me. I've taken flak for that before but it's freaking true. 💡 Founders should diligence their investors as well <-- YES PLEASE! Love when I hear about this and it's absolutely a signal that the founder knows what they're doing. 💡 It's not "us vs them". It's "us vs entropy" 💡 There's also the reality that Midwest founders may also need to raise from out-of-state investors (and how that's not a bad thing). Personally, I'm very much looking forward to the continued shift here with more angel investors writing more checks, more early-stage capital, and more large checks at later stages. Lots of room to grow... Philippe V. and the team at StartMidwest have absolutely hit it out of the park with this series. Extremely informative and what a *great* way to get a lens into how the VC world operates here in the Midwest, and how to navigate it the right way. Take 5 minutes to read this today and share your thoughts: https://lnkd.in/ed8FwbeK

Some great advice. As an angel you know that most of your investments will fail with randomness probably the biggest explainer. If you can't accept this you probably should not invest or only write small cheques. For an investee company, investor relationships are important. If one of my investments doesn't communicate I just write them off mentally and move on. A company that spends time creating a bond keeps me engaged and if they reach out for help I'm more than happy to help. I guess that is just standard human behavior

Managing angel relationships once the money’s in? That’s where I went wrong as a founder.  👇 Here’s what I’ve learned about keeping investor relationships healthy 𝐚𝐟𝐭𝐞𝐫 the round closes. 4️⃣ 𝐊𝐧𝐨𝐰 𝐲𝐨𝐮𝐫 𝐩𝐥𝐚𝐜𝐞 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 An angel’s risk profile improves once they reach 20+ deals — they expect a mix of wins and losses. Working with a syndicate or several angel groups can balance enthusiasm with experience, and keep admin time and costs manageable. I value angels who're transparent about their risk mitigation: “𝘯𝘰 𝘧𝘰𝘭𝘭𝘰𝘸-𝘰𝘯𝘴, 10 𝘥𝘦𝘢𝘭𝘴 𝘢 𝘺𝘦𝘢𝘳, 𝘢𝘭𝘭 𝘚𝘌𝘐𝘚.” That clarity makes life easier. ⚠️ Beware of being too many people’s first deal. New angels bring enthusiasm and time, but often unrealistic expectations and over-involvement. They may not yet have learned what “𝘋𝘰𝘯’𝘵 𝘪𝘯𝘷𝘦𝘴𝘵 𝘶𝘯𝘭𝘦𝘴𝘴 𝘺𝘰𝘶’𝘳𝘦 𝘱𝘳𝘦𝘱𝘢𝘳𝘦𝘥 𝘵𝘰 𝘭𝘰𝘴𝘦 𝘢𝘭𝘭 𝘵𝘩𝘦 𝘮𝘰𝘯𝘦𝘺 𝘺𝘰𝘶 𝘪𝘯𝘷𝘦𝘴𝘵” really means, so over-react to routine bad news. 5️⃣ 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐞 𝐜𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭𝐥𝐲 𝐚𝐧𝐝 𝐩𝐫𝐨𝐚𝐜𝐭𝐢𝐯𝐞𝐥𝐲 I was terrible at this in my first angel-backed startup. It filled me with dread. Now I see investor updates differently. They’re not (𝘫𝘶𝘴𝘵?) a test to pass or fail — they’re an opportunity to create and maintain a professional relationship. Angels want to know: • How their all investments are performing • Where and when to focus attention • That you’re still delivering on what you promised You’re likely one of 20+ startups in their portfolio, so make their life easy. A simple, consistent update template (cash runway, MRR, headcount) goes a long way. It reduces surprises, builds trust, and lets you 𝐬𝐭𝐚𝐧𝐝 𝐨𝐮𝐭 for the right reasons. Be honest about challenges. Life is easier when you’re in their “good performer” category — but you won’t stay there if you hide bad news or over-promise and under-deliver. Don’t spring big pivots on investors unannounced. This can impact EIS tax relief eligibility, which is terrible news. Be confident asking for specific help and in saying “𝘯𝘰, 𝘯𝘰𝘵 𝘯𝘰𝘸” when something’s a distraction. 💡 A tip for angels: 𝐟𝐨𝐮𝐧𝐝𝐞𝐫𝐬 𝐠𝐨 𝐬𝐢𝐥𝐞𝐧𝐭 𝐟𝐨𝐫 𝐚 𝐫𝐞𝐚𝐬𝐨𝐧 Most of us hit a point where we’ve run out of good news and good will. They may feel pressure to tell you what you 𝘸𝘢𝘯𝘵 𝘵𝘰 𝘩𝘦𝘢𝘳, not what you 𝘯𝘦𝘦𝘥 𝘵𝘰 𝘬𝘯𝘰𝘸. Some go silent, others depart far from reality. Encourage regular updates and respond in a 𝐧𝐨𝐧-𝐣𝐮𝐝𝐠𝐞𝐦𝐞𝐧𝐭𝐚𝐥 way. Give permission to share bad news. Occasional offers of specific 𝘱𝘳𝘢𝘤𝘵𝘪𝘤𝘢𝘭 help can remind them you’re still on their team. 💡 𝐒𝐭𝐨𝐩 𝐩𝐢𝐭𝐜𝐡𝐢𝐧𝐠. 𝐒𝐭𝐚𝐫𝐭 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐧𝐠. The real work starts 𝐚𝐟𝐭𝐞𝐫 the round closes — when you’re building a business, not selling a vision. Founders: are your updates admin, exams or relationship building? Angels: how do the best startups keep you informed and focused post-investment?

“How Many Startups Should You Back (and at What Check Size)?” This is one of the first questions new angel investors ask and one of the hardest to answer neatly. Because unlike public markets, angel investing doesn’t play by averages. You’re not building a balanced portfolio. You’re building a set of asymmetric bets, where a small number of winners often carry the rest. The challenge is that nobody knows which ones those will be. At Seraf, we often tell new angels that diversification matters more than precision. Most data suggests you need at least 20–25 companies in your portfolio before your returns start reflecting “the power law” — where one or two big outcomes offset the others that go sideways or to zero. That doesn’t mean you have to write 25 large checks. It means you have to design your portfolio with enough surface area for luck and skill to work together. A good starting framework looks something like this: If your total angel allocation is $250K, you might plan for 20–25 checks of $10–12K each. Then, if a few start showing real traction, reserve additional capital for follow-ons. Most first-time angels make two mistakes: they invest too much, too soon, in too few companies. It feels exciting at the start, but by deal #5, they’ve already tied up most of their capital. When those early picks don’t pan out, there’s no dry powder left for the outliers. Angel investing isn’t about betting bigger. It’s about betting often enough and staying disciplined long enough for the math to work in your favor. The other piece of advice I share often: check size should reflect your conviction and your portfolio design. If you’re just getting started, smaller checks let you learn faster and build pattern recognition without concentrated risk. Over time, as you understand what kind of founders, models, and markets fit your lens, your check sizes can grow with your conviction. There’s no magic number. But there is a mindset: Start broad. Stay patient. Keep reserves for the ones that truly earn it. For angels in the room — how did you decide your own target portfolio size? #AngelInvesting #VentureCapital #Seraf #Investing #Operators

Roelof Botha just called venture “return-free risk.” He’s not being dramatic. He’s doing math. $150B flows into VC annually. Billion-dollar exits that actually return capital? We get maybe twenty. MAYBE. The equation is broken. And Roelef is right to sound the alarm bells. At current fund sizes, the system would need dozens of huge wins every year to make LP portfolios pencil out. Let’s be honest….thats just not gonna happen, not at a level necessary for the returns promised. That means the asset class itself is under strain: → LPs chase exposure that can’t produce enough exits → GPs manage ballooning funds built on momentum, not multiples → Founders absorb the cost — longer timelines, harsher dilution, and a market where “caution” is really fear of negative DPI When the exit window narrows, VC stops being venture. It starts behaving like structured credit in hoodies. Three signals to track: For founders: - Fund cycles are compressing. Hold periods are stretching. - Most Series B rounds are bridges disguised as growth. - Back investors who can manufacture exits — not just chase them. For LPs: - Back managers who can create liquidity, not just mark up valuations. - Dry powder isn’t leverage when the pipeline is clogged. For everyone deploying? The math will correct. It always does. What are you seeing in your portfolio or pipeline? Are exits manufacturing themselves — or being manufactured? #VentureCapital #LPs #Founders #CapitalMarkets #PrivateEquity #VCMath #Liquidity #StartupFunding #DPI #VentureReturns

I got invited to sit in with the Atlanta Technology Angels this week. Think of it like Shark Tank, but in-person, with real investors listening to founders pitch their companies. Two software companies were presenting. One was an early-stage company, the other had around $400k in recurring revenue, both with projections of $500m+ within 5 years. Both were trying to raise money, and they were doing it in front of a room full of investors who weren’t just listening. They were going to try to poke holes in the business. What I saw in that room was powerful. Sitting there, watching how these investors think, what they asked, what made them lean in, what made them tune out... it made me realize something: The traits that make a business investable are the same traits that make a business valuable to own. Here’s what stood out. The first thing the investors were hungry for was a clear differentiator. Why you? Why now? Why this product over anything else out there? If you can’t show how you’re different, you’re replaceable. The second thing was the forecast. Not just “we want to grow”, but a real plan with numbers. How much revenue do you expect to make this year, next year, five years from now? And just as important, how are you going to get there? Then they wanted to know about the track record. What have you done before that proves you can actually execute this? It’s not just about the idea. They’re betting on the operator. Without experience or proof, it’s hard to back a plan, no matter how good it sounds. Then it got into the numbers. Margins. CAC. Spend by channel. Ops costs. How much do you need to put into each department to hit your goals? I saw it clearly: you don’t just need to know your numbers... You need to own them. Finally, they were looking for a system. A repeatable way to produce results. Something that actually runs with consistency. That means leadership. That means structure. That means clarity. At the end of the day, they’re just trying to protect their money. These are business people, too. They’ve worked for what they have, and they’re not going to bet on something they don't believe can grow. The more clarity you bring, the more confidence they have. But here’s what hit me the most: A great business for an investor is also a great business for you. Because if someone else would confidently put money behind it, it probably means you’ve built something stable, repeatable, and worth scaling. This was my first time seeing something like this live. I’ve watched all the Shark Tank episodes like everyone else, but being in the room, hearing the real questions, watching the tension, seeing what clicked and what didn’t was different. It was a powerful reminder that systemizing your business isn’t just about raising money or getting attention. It’s about building something that works. If you’d feel nervous pitching your business to a room like that, that’s probably where the work is.

💥 Highly Recommended Post #Startup An inconvenient truth unfortunately, which is why less than 1% do it, never mind succeed. Very sad but true. I remain confident an entirely “ novel “ protocol level of funding startups will soon emerge using web3 & ai. No need to ever know who the investors are and exits can occur anytime through the blockchain protocol. Startups are globally funded, all imbecile bias and friction disappears just like AI is changing everything as we speak, and our world drastically improves through creativity and innovation, leading to more stability instead of chaos. This is how “ TrustlessVC “ should work for investors and startups for a better world 🤓 Morpheus thinks 🌿 differently 🌷

I've been on both sides of the table. Here's what investors will never tell you. 1️⃣ They don’t know your name.  Until Series A, you’re dot #47 on their dealflow sheet.  It’s not personal — it’s portfolio math. 2️⃣ They don’t know who wins.  That’s why they back five startups in your vertical.  They’re betting on the industry, not heroes. 3️⃣ They’re not following instincts.  They’re following statistics.  Venture = probability, not prediction.  They know most will fail — just not which ones. 4️⃣ Getting funded ≠ You’re exceptional.  At pre-seed, you’re a statistical outcome,  part of a portfolio where one win covers ninety-nine losses. 5️⃣ Real selection starts after the wire.  Money in the bank? Now the test begins.  Focus, resilience, and timing separate survivors from statistics. 💀 The brutal truth?  They don’t think you’re special. Yet. But if you keep swimming while others drown —  they’ll remember your name.  Not for your pitch.  But because you survived. “Venture capital isn’t faith — it’s statistics wearing optimism.” Drop a 🧿 if you’re ready to hear what investors won’t say out loud. https://lnkd.in/d_i6bgAq #VentureCapital #StartupReality #Fundraising #Founders #StartupLife

3 red flags that are killing your fundraise according to a $100M VC fund. Warning signs that Juan Carlos Pacheco and IDEA Fund Partners screen for in the first conversation: • Arrogance (kills partnership) • Weak command of numbers (signals chaos) • Saying "no competition" (shows market naivety) Here’s how to avoid them to start showing up as a credible, coachable operator that investors actually want to partner with. #1 Arrogance Juan Carlos said it plainly: "If you're a jerk, that's a very quick red flag. Because it's a partnership when you invest." This isn't about being nice for the sake of being nice. It's about what arrogance signals. If you dismiss questions, you'll dismiss your customers If you can't take feedback in a pitch, you won't take it from your board. .  If you think you know everything, you won't adapt when the market shifts. Investors are buying into years of partnership. Board meetings. Hard conversations. Pivots. Bad quarters. If you're arrogant now, you'll be impossible later. #2 Weak command of your numbers Juan Carlos said: "If you can't speak with some intelligence about revenue, burn rate, how you're gonna use the capital... that's a huge red flag." Weak grasp of numbers signal operational chaos. Vague on how you'll use capital? ↳ You'll waste it. Don't know your burn rate? ↳ You're guessing at runway. Can't explain how you arrived at your valuation? ↳ You don't understand your business model. Investors aren't expecting perfect projections. They know things will change. But they need to know you're running your business with discipline. That you're making data-driven decisions. That you can be trusted with their capital. If you're fuzzy on the numbers now, you'll be reckless with their money later. #3 "We have no competition" This one kills more deals than founders realize. Juan Carlos said: "Competition is typically a good thing. It shows there's a market there." Here's what "no competition" actually tells an investor: Either you haven't done your homework, or there's no market and customers don't care enough to pay. And if there *is* competition and you just don't see it? You're naive. You're not paying attention. You don't understand your landscape. Juan Carlos used a sports analogy: "If you're going into a tournament, you scout your opponents. You see what they're strong at. You see what you're strong at. And you adapt." Competitors aren't threats. They're validation. They prove there's a market. They show you what works and what doesn't. They force you to get sharper. If you can't articulate your competition and your edge, you're not ready. At the early-stage, there is uncertainty and risk.  Investors don’t expect flawlessness. They do expect coachability, self-awareness, and market intelligence. Know your numbers cold, stay humble, and study your competition. Do that, and you’re already ahead of most pitches.

Investors don't know your name — let me tell you what they won't tell you. VCs love to say they’re founder-friendly. Let’s decode what that really means 👇 1️⃣ They don’t know your name. Until Series A, you’re dot #47 on their dealflow sheet. It’s not personal — it’s portfolio math. 2️⃣ They don’t know who wins. That’s why they back five startups in your vertical. They’re betting on the industry, not heroes. 3️⃣ They’re not following instincts. They’re following statistics. Venture = probability, not prediction. They know most will fail — just not which ones. 4️⃣ Getting funded ≠ You’re exceptional. At pre-seed, you’re a statistical outcome, part of a portfolio where one win covers ninety-nine losses. 5️⃣ Real selection starts after the wire. Money in the bank? Now the test begins. Focus, resilience, and timing separate survivors from statistics. 💀 The brutal truth? They don’t think you’re special. Yet. But if you keep swimming while others drown — they’ll remember your name. Not for your pitch. But because you survived. “Venture capital isn’t faith — it’s statistics wearing optimism.” Drop a 🧿 if you’re ready to hear what investors won’t say out loud. https://lnkd.in/d_i6bgAq #VentureCapital #StartupReality #Fundraising #Founders #StartupLife