By Eric Picard
I’ve been getting a lot of outreach lately. Brilliant people, world-class engineers and research scientists, some of the smartest humans I’ve ever met, are reaching out about AI startups they want to build. Most of these folks have made real money in their careers. They’re self-funding the early work. And almost all of them are about to get a very rude awakening.
These folks are coming to me because they know I’ve done four startups, and that I’ve raised money before. Bluestreak, my first startup, raised $28MM between 1997 and 2001. I will tell you for certain that the seed funding was the hardest part. We raised $150,000 from local angels, and then $1.3MM from some professional angels. Then a Series A, Series B, and Series C. Every one of those raises was incredibly hard. Rare Crowds, my second startup, raised $750K and it was harder than any of the fundraising we did for Bluestreak.
My engineering and scientist friends know that building the technology is hard. They’re right. But they assume that’s the hard mountain to climb. It isn’t. Building the technology is the mountain you already know how to climb. Raising the money is a different mountain entirely, and brilliance in engineering and science does not transfer natively to climbing that mountain, it’s a whole new skillset to learn.
It isn’t about talent or ability. These are people who have never failed at anything in their professional lives. They excelled academically, landed elite research roles or senior engineering positions, built things other people couldn’t. That track record makes it very hard to see what’s coming. Startups are harder than anything they’ve done before, and fundraising is a completely different skillset than building technology. If I had to bet on the one thing that will most surprise them, it’s that.
Raising money is selling a piece of your company
Fundraising is selling a stake in your company to a stranger who has no reason to trust you, based on a pitch about an unproven future. You are asking them to take a risk, and your job is to mitigate that risk in their mind with three things: a genuinely innovative idea, a technology problem that is hard enough to defend (what investors call a moat), and evidence that your team is the one that will win.
That last one matters more than most first-time founders expect. Investors invest in teams as much as they invest in ideas. Most companies pivot multiple times. The idea you’re pitching today may not be the business you’re running in three years. Experienced investors know this, and they’re betting on whether you and your team can navigate the chaos of a startup, not just whether the technology works as advertised. And it isn’t just one member of the team, they’re looking for a strong team that works well together.
So you’re not just pitching a product. You’re selling yourself, your team, your judgment, and your ability to execute under conditions that are nothing like the well-resourced environments most technical founders have thrived in. Brilliant engineers trying to raise money are not expert at fundraising until they have a lot of experience doing it. And most of them are starting from zero.
This also goes for product managers reading this. You’re a hybrid, part business and part technology, and it’s tempting to assume that gives you an edge in the room. Maybe. Maybe not. Don’t walk in overconfident. I’ve seen product people get just as humbled as their engineering co-founders, because pitching investors is its own craft, and it doesn’t care about your functional background. It’s much closer to sales than engineering.
The numbers, and why they should reset your expectations
This has been studied carefully, and the findings are sobering.
DocSend, working with Harvard Business School, analyzed hundreds of startups across multiple years. The headline finding for a successful seed round: founders contacted an average of 58 investors and held around 30 to 40 meetings before closing, over roughly 12.5 weeks. By 2023, the average was 66 investors contacted with about 38 meetings set. Series A is different. By then your track record filters the funnel, and founders contacted an average of 26 investors rather than 58.
Nathan Beckord of Foundersuite, who has run many raises, puts the conversion rate plainly: he pitched more than 200 investors and landed one seed fund and 10 angels, a roughly 5% conversion rate, and calls that “pretty common.” The 2026 benchmarks from Founder Institute tell founders to prepare to pitch 100 to 200 investors.
Here is the actual funnel, using the data as reported:
- You contact roughly 58 to 66 investors to run a seed round.
- About half convert to meetings, roughly 30 to 38.
- Roughly 3 to 5 write a check, around 5% of the people you contacted.
Two ratios to internalize: about half your outreach should turn into meetings, and about 1 in 10 of those meetings turns into money.
The founder who takes 8 or 10 meetings and concludes the market is closed has not run the funnel. They haven’t finished yet.
Meetings matter more than outreach volume
The insight buried in the DocSend data that changes how you should think about this: it’s not the number of investors you contact that predicts success. It’s the number of meetings you get.
In one cohort, founders who didn’t get funded actually contacted slightly more investors than those who did, 77 versus 70, but landed far fewer meetings, averaging just 15. The funded founders got roughly twice as many meetings from roughly the same outreach.
This means meetings are the signal to optimize for, and not just because more meetings mathematically means more chances at a check. Each meeting is a rep. You get feedback, you adjust the pitch, you sharpen the story. Later pitches with a more refined narrative, and with more evidence of traction as you build, are meaningfully more likely to succeed than your first few. The pitch you give in month one is not the pitch you give in month three, and it shouldn’t be.
Not all ideas are fundable as standalone companies. Some things that are technically impressive are better as a feature inside a large platform, or as a services business, and experienced investors recognize that immediately. If you’re pitching a fundable idea and getting meetings but not money, your pitch is the problem. If you can’t even get the meetings, the targeting or the narrative is the problem. Either way, the fix is more reps and more feedback, not just more outreach.
Know who you’re pitching
This is where a lot of first-time founders waste months and burn their best opportunities.
Venture capital firms, the branded ones you’ve heard of, primarily invest in later seed rounds and Series A, and some focus on later stage (Series B and C) rounds. If you’re connected, some will take your meeting, especially if the technology is interesting. But the most likely outcome is a genuine, friendly conversation that ends with, “This is exciting, come back when you’re further along.” That is not a rejection. That is an investor telling you what milestone will get them in. Keep the relationship warm. It has real long-term value. But it does not put money in the bank this quarter.
For pre-seed and early seed funding, the capital you need to build something worth pitching to a VC, your target market is angel investors. Specifically angels who invest at your stage and in your sector. Research them. Find out what they’ve funded, what stage they enter at, what check sizes they write. This is sales 101 applied to fundraising: know your customer before you walk in the door.
One other misunderstanding that’s worth calling out: If they didn’t say yes, they really said no. A polite, super interested conversation isn’t a yes. A promise to bring your idea to their next review meeting with their partners is a win. But it’s not a yes, and it relies on that partner being able to articulate your pitch (note: your leave-behind materials are important.) So individual investors are easier, they can make the decision on their own without convincing anyone else. You’re better off getting a fast “no” instead of a slow “no.” Don’t be discouraged by the fast “no”, be happy it was fast. Ask for clarity on why they said “no”, and hope to glean input that can help hone your pitch for the next investor.
The problem of overfitting on success stories
Exceptional people are more susceptible to this trap than most, because their own lives keep providing the evidence.
Jim Carrey famously told graduates to take risks and follow their dreams. He’s living proof that it worked. What he can’t tell you about is the thousands of genuinely talented comedians and actors who took the same risks, worked just as hard, and didn’t make it, because we’ve never heard of them. Talent matters. Jim Carrey is exceptionally talented. He was also very lucky, and luck doesn’t scale to everyone who deserves it.
Here’s the piece that gets underappreciated: talented actors trying to get cast in roles are not expert at auditioning until they’ve done it hundreds of times. The audition is a separate skill from the craft. Talented engineers trying to raise money are not expert at fundraising until they have a lot of experience doing it. Experience tips the scale. Pitch a lot.
The standout AI startup raises you’re reading about, $20M at a $200M valuation pre-revenue, are the Jim Carrey story. They are not the base rate. They are the outcomes you read about because the others didn’t make the news.
This matters for how you plan. Your talent is real. Your odds are better than average because of it. They are still hard.
Product-market fit is not a buzzword
You’ll hear “product-market fit” constantly. There’s a reason. Tuning what you’re building to what the market actually wants, or can be convinced it wants, is one of the hardest and most time-consuming problems in building a company. Most early startups are wrong about this at least once before they figure it out. Most are wrong more than once. Success isn’t about betting once, it’s about betting, learning, and betting smarter the next time.
Investors who get in ahead of product-market fit are betting almost entirely on the team. If you can show early evidence of fit, even a handful of paying customers, even a waiting list with real signal, you dramatically increase your chances. Every proof point you can put in front of an investor reduces the risk they’re taking on, and risk reduction is the whole job of the pitch.
It takes a team with all the right skills
I want to make a case for something that brilliant technical founders are often the most resistant to hearing.
The best salespeople and business people are not less intelligent than engineers and scientists. They’re differently intelligent. Building relationships, reading a room, navigating objections, understanding what someone needs to hear before they’ll commit, these require a kind of emotional intelligence that is just as rare and just as valuable as the ability to solve hard technical problems. High EQ is a real capability, and in a fundraise it may matter more than high IQ. The two are not in competition. They’re complements.
The great ones are comfortable with rejection in a way that most technical people aren’t wired to be. They think in pipeline. They treat objection-handling as a craft. They genuinely enjoy the human dynamics of closing a deal. Finding someone great at this is as hard as finding a great engineer. They’re just hard in different ways.
Building a founding team is not a hiring problem. It’s the most important set of relationships your company will ever have. But if your founding team is all technical depth and no sales or business instinct, you are going into the hardest sales process of your life, raising money, without anyone on the team who has ever done it before.
Think hard about that before you start pitching.
Let’s talk about the roles and the real job description from the lens of a startup. I’m going to use C-level titles, but you can extrapolate. And remember, a 5 person company with 5 C-level titles isn’t necessarily a good idea or a bad idea.
The real job descriptions
CEO: Your job is to make sure the company has enough money to survive. Period. You’re on the hook to make payroll. To ensure that the AWS or GCP, Anthropic or OpenAI, BigQuery or Snowflake bills are paid. Your job is to make sure the company lives through the startup experience. This means you own the investor relationship, and you need to actually own it. It’s one of your many full-time jobs. Even if you’re a technical CEO, or if you’re a product CEO – your primary job is making sure the company survives to continue – which means you own the investor relationships.
CTO: Build the thing. Innovate enough to differentiate. But build the thing. Fast. Take the right shortcuts, you’re not at a F500 company. Amazon, Microsoft, Google – they all have early-days stories about technical risks and shortcuts they took. Often laughed about, as in, “I can’t believe we had $5M in sales running on a server under Jim’s desk. Remember the time the cleaning person unplugged it?” Make sure your shortcuts are the right shortcuts, not the wrong ones. Make sure they’re survivable.
Chief Product Officer: Figure out the thing that will find product-market fit. Talk to the market. Develop a hypothesis. Test and retest it. Apply learnings. Convince the CTO to make the changes. Package the idea so it can be sold. Startups overfit against invention and building, and underfit against “Go-to-Market.” Don’t forget that great products fail all the time, and weaker products win all the time because they were brought to market better. Listen to your sales inputs on how the pitch was received, and tune both the product and the pitch!
Chief Client Officer: Make any customers happy at almost any cost. Winning a customer is super hard. Keeping that customer happy is also super hard. Keep them happy, churn is not something an early stage startup can weather as easily as a late stage startup. Make up for product shortcomings with human effort, but make sure it’s not permanent.
CRO: Build a pipeline, and convert. Do it with investors. Do it with customers. Hone the GTM pitch on both decks, learn and adapt. But close at all costs. Revenue does two things: It funds the company to offset burn rate, and it proves to investors that you’re on a path to product-market fit and ultimately to success. Be methodical, analytical, and get to 10% week-over-week and month-over month success metrics (or better!)
Why the CRO matters more than technical founders think: The right founding team for most successful technical startups includes someone who lives for the close, isn’t wounded by the no, and wakes up thinking about how to move people from interested to committed. That person needs the engineer as much as the engineer needs them. The technology without the ability to sell it is a project. The ability to sell without something genuinely hard and defensible behind it is a dead end. Together, you have a company.
Fundraising is a grind. It takes months, hundreds of contacts, dozens of meetings, and more patience than most people who’ve never struggled professionally have had to develop. The technology problem is hard. The fundraising problem is harder in a completely different way. Go in knowing that, prepare for it like the discipline it is, and find the people around you who are as talented at selling as you are at building.
You’re going to need each other.
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