My name is Frankie le Nguyen. I’m the co-founder of Staging Labs.

I worked in product for the first 4 years of my career and have seen the full spectrum of startup outcomes.

A company I worked for went through an IPO, one that I founded got acquired, and another was an epic failure. 

I ended up at a VC working in Singapore after that, investing into about 70 companies, until the itch to start something found me again.

I wanted to look for problems and found one after personally experiencing a crypto scam after clicking on a link I shouldn’t have.

At Staging Labs, we work with the goal of protecting people from those scams so everyone can easily and safely use crypto.

We raised $1.1M pre-seed from May to September 2022 at a $10M post-money valuation. 

I wanted to get as many soft commits as possible before officially starting the raise.

When I started approaching friendly VC firms and angels in May, I wasn’t stating that I was going out to raise funding.

The conversations were centered around me sharing what we were working on, talking about our backgrounds, and showing our momentum.

In July when people started indicating that they were interested in opting in without being directly asked, that was my first sign to go out and raise the round.

We were also talking to about 100 people at the time who all had their own stories about losing anywhere from $10k to $100k to these scams. 

It was another sign that there is a big problem here. 

Having momentum from customers at the same time as momentum from early chats with investors meant it was the right environment to raise. 

It’s difficult to create so once we had it, we knew we were on to something.

Even though we started the round with 25% of it verbally committed, it took us about five to six weeks to get to 50%. We reached 100% a few days later.

We purposely set our valuation lower than we could have to drive interest in the round. It worked. We ended up oversubscribed.

My co-founder and I were super committed to sticking with 10% dilution at a $10M post-money valuation which was why, despite some late checks rolling in, we only took $1.1M.

While we could have done an extra tranche, we didn’t think the additional checks would add credibility to the round or make us move faster. 

We knew the type of company we wanted to build. We didn’t need more money to prove what we needed to prove.

In the early stages, I wasn’t that strategic. It was purely based on the people. We looked at if this person was someone we wanted to work with long term and if they were a fit with our culture.

The conversation changed when we got bigger logos. There were three angles we looked at.

The first was “Does this strengthen one of the core areas that I don’t have in the team?” 

We were weaker in marketing at the start so we looked to bring on angels who had a background there.

We also looked at the possible exit paths the investor offered if, for example, there were to be an acquisition in this space, who are the potential buyers?

We also thought about distribution and how the investor can help with that. In our case, we knew we needed distribution through crypto wallets. 

We looked to bring on angels that could help with that. We didn’t get all of them, but we got a good amount. 

We put in extra work when scheduling the meetings. 

We made sure the timezone was geared toward the investor we were reaching out to and made them book a meeting within the next few days. 

The subtle shift in the power dynamic was a game changer.

A VC will book a meeting 2 weeks out if you give them the opportunity to do so — that kills your momentum.

We talked to about 20 investors before the round started. After those chats, we had one firm and a handful of angels verbally commit, which ended up being 25% of the round. 

This was our sign to go ahead and officially raise.

We reached out to 175 VCs and had a 7% success rate. We closed 13, were ghosted by 36, and had 126 who outright say no.

In our case most wrote smaller conviction checks as opposed to one lead. 

Most of the angels I reached out to already knew me and were mainly betting on me so we had a higher success rate with them - 47%. 

Of the 104 we spoke with, we closed 49. Again, a lot wrote smaller checks.

I’d highly recommend running a vehicle on AngelList or Carto and wrapping all angels into a single line item so they can write smaller checks. 

They might not mean much monetarily, but we’ve found that the people who’ve been most helpful are those who contributed the smallest checks. 

They want to make it worth your time and show that through their actions over time.

We could have gotten a lead but then we would’ve either had to oversubscribe and dilute or increase the valuation and reduce our ease of raising the next round.

For the fundraise our narrative was how ill-equipped the crypto space was for the problems of scams. 

You make a more reasonable ask instead of the cookie-cutter YC $2M on a 20-post.

At the time we began raising, most people were not writing checks.

Terra Luna and Celsius had collapsed. It was also right before FTX collapsed.

We would talk to funds that would tell us that they’re not deploying capital at all.

We knew the market would be unfriendly going in so we kept reaching out to more people, made more reasonable asks, and were prepared for a ton of no’s along the way.

A lot of people push back against cold outreach but, for me, cold outreach was one of the most successful paths.

I’d noticed that First Round Capital had put out a list of angels that had recently graduated from one of their recent Angel Track cohorts.

I messaged 5 of them, and 3 of them ended up investing while another one introduced me to 2 funds that eventually invested.

Obviously focus on warmer intros when you start, but don’t be afraid to roll up your sleeves and go cold. 

The trailing effect of our cold outreach represented approximately a third of the capital we raised.

Take the time to develop and improve your fundraising skills. Don’t be afraid to ask for feedback, and actively look for opportunities to grow your sales skills.

Some founders focus on building and believe investors will come, but that’s not how it works. You need to sell yourself rather than just the product or market.

They will be wondering, “Do I tangibly see this team going against the odds, persevering, and doing what they’re saying they’re going to do?” 

The ability to sell that belief is something you’re going to continuously need throughout your founder journey.