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End of the commentPhilosophy Team Companies News The Review Talent Books Angel Track Fast Track We’ve developed a detailed new product-market fit framework for B2B founders Read here Philosophy Team Companies News The Review Talent Love We’re called First Round for a reason. Your first money in is one thing. But so are your first hires, your first product and your first customers. We’ve helped Notion, Roblox, Uber, Square, Verkada, Together and 500 others tackle these firsts and more. Whether it’s pre-seed, seed or Series A, we’re building the world’s best product for founders who are just getting started. Timing Is it ever too early to approach First Round about investing? It’s never too early to reach out, but it can be too late. We don’t see divisions between angel, seed and pre-seed — we’re interested across the board and find that founders’ needs are the same early on. In fact, most of our 300+ companies came to us when they were a couple of people and an idea, having raised no capital before they met us. So, even if you don’t think you’re ready, we’d still like to get to know you. Maybe we can even help in the meantime. What if I’ve already raised some money from angels — is it too late to talk to you? Of course not. While we’re usually the first money in, we’ve worked with a number of teams that raised a small friends and family round before coming to us. That said, if you’ve already raised more than a few million dollars, we’re probably not a fit. I’m raising my Series B or Series C — should I contact you? Unfortunately, we’re named First Round for a reason. If you’re raising your third or fourth round, consider a later-stage firm that might be a better fit. How We Make Decisions Does First Round only invest in particular areas or industries? No. We don’t think VCs predict the future — founders do. And we look to founders to teach us what’s next. We were fortunate to invest in Uber before the rise of the on-demand economy. We invested in Blue Apron before everyone jumped into food tech. But all of our companies have one thing in common — we met the founders when they were just starting out. Yes, our investments tend to cluster around enterprise, consumer, hardware, fintech and healthcare. We’ve also added a dedicated Infrastructure & AI/ML Investor to the team — based on the large and thriving healthcare community we’ve invested in and a focus on supporting founders who are building the latest data and dev tools. But that’s not where our curiosity ends. If you’re building something different, we still want to hear from you and learn about the vision of the future you have in mind. How do you weigh different criteria in your decision-making process? The biggest factor in our decision-making is always the founding team. How innovative, resourceful and resilient are you? What’s your superpower? Why are you going to be the ones to prevail where others won’t? What moments in your history show that you thrive off the beaten path? Of course, we evaluate product and market too, but to be honest, we mostly look at that to evaluate the strength of founders too. Looking at what you’ve done already for this company — and before in your career — gives us a record of hundreds if not thousands of decisions you’ve made to get to where you are today. And that’s where success lives or dies in this industry: the ability for founders to make really quick, good decisions. We want to understand how you do it, and we give that a lot of weight. What does First Round look for in an idea? Above all, we look for compelling and contrarian insight into how the world works. What do you understand about a market or a need that no one else does or that other companies in the space get wrong? And why is your company the most likely to win at addressing this gap? Second, if you have a product in market, a small group of passionate early customers is a strong indicator for us . Several years ago, we heard a handful of the founders in our community raving about a new business intelligence tool called Looker . We reached out to the company and invested. If there are people using your product or service who wouldn’t know what to do without you, we want to hear about it. That’s one of the strongest data points you can offer. As an extension of this, we want to see creative thinking around go-to-market strategy as well as product. The best startups take both seriously. Third, we take a close look at the market you’re going after . Let’s say you win the whole thing — is the prize worth winning? The game is long and hard, and some markets are more rewarding than others. SaaS companies have a different range of opportunities than on-premise software makers. First-party retailers are valued very differently from third-party ecommerce sites. To mix our metaphors, before a founder starts building their castle, they have to make sure they’ve picked the right piece of land. What do you look for in a founding team? Building an enduring company is ridiculously hard. You have to overcome inertia, have an unbelievable amount of conviction, and be willing to drive through brick walls. You can’t wait for someone to hand you a roadmap. You have to be able to draw it yourself and execute at the same time. This is an exceedingly rare set of skills — and it’s what we seek to find in every founder conversation we have. That’s number one. Then there’s all the typical stuff: integrity, credibility, market understanding, learning ability, etc. But there are a few other things we haven’t seen written about or discussed enough that end up mattering a lot: Delayed gratification. Being a founder is a constant, grueling exercise in deferring happiness and victory. The most successful entrepreneurs are willing to sacrifice in the short term for long-term impact. When we consider working with you as a founder, we look for your willingness to make these tradeoffs earlier in your life and career. Did you skip spring break to pursue a long-term project? Did you work while you were in school? Have you built anything that took months of heads-down crunch mode to make possible? Admit unknowns. We’re always meeting the same two types of entrepreneurs. The first thinks they’re expected to know the answer to every question. So they’ll make sure they have a definitive response always, even if they shouldn’t. They’ll tell us their pricing model. Why they’ll be competitive with Google. What will cause customer churn in three years. Whenever we try to address potential risks, they tell us they don’t exist. This is not our ideal type of founder. The second type of entrepreneur will answer questions when they can, but when they don’t know, they say so. When asked the same question about pricing, they might say, Well, we’re considering a few different options depending on the outcome of some tests we’re running.” When asked about the cost of customer acquisition, their response could be, We don’t know what our numbers will be, but here’s our model based on comparable companies.” When asked about the risks, they identify several — and engage us in a vibrant discussion about how to handle them. The founder who volunteers their ignorance has far more credibility . No one expects a pre-launch company to have all the answers. In fact, it’s a red flag if you think you do. Don’t sell us on being 100% correct. We’d much rather understand how you’re attacking the market, evaluating the risks, and taking on unknowns. Good storytelling. All successful founders can deliver a compelling narrative. They have to be able to sell against the status quo. They have to convince investors and employees that this incredibly unlikely thing they’re doing is about to take the world by storm. They have to capture media attention, keep their board aligned and energized, and consistently bring new customers into the fold. If a founder can’t tell an amazing story, it’ll be hard for them to do any of this. If you’re interested in developing these...