I’m Aidan McCarty, Founder and CEO at Verified. 

We power one-click signup for fintech. We take a phone number and pass back everything you need to open an account, with full user consent. That’s why 1-click signup is the fastest signup experience on the web.

We'll be doing that eventually for more than just fintech. We’re very much inspired by one-click checkout. We're trying to do the same thing but for signups.

We've done just about every kind of fundraising. We started in political tech so we got about $75k in grants. We also did $10k in equity crowdfunding early on.

Grants are great because they're non-dilutive, but they're not great because they take forever to apply to. For most businesses, grants are not very scalable or repeatable. But it did get us started without any dilution. 

We then raised about $800k in a pre-seed round from some angel investors. That was a priced round, but it was relatively easy because angel investors don't do as much diligence as VCs. 

After that we raised a seed round from Draper back in 2020 that ended up becoming about $6M with some convertible extension. That was also a priced round, but it was not as simple as the pre-seed.

Most people don’t understand how much work it takes to close a priced round. For the seed, we had to do things such as showing the investors what licenses we had on every single software package to ensure that we owned all of our tech stack.

It took 3 to 4 months just to go through diligence to close the seed round. Since then we've raised a little bit on a SAFE. We're almost cash flow positive at this point.

We also went through some accelerator programs. Most are garbage; I would stay away from them.

We founded this business right out of college. We were not that experienced with how to properly plan as a business. 

We had some hires that we felt we needed to make rather than any particular milestones. 

It’s very hard early on to plan more than a month out. It's not even worth your time to do so. Many investors will still require you to do so because they've never founded a company before.

We didn't really plan too much beyond that. We focused on the immediate things we needed to do such as building an MVP, testing it, iterating, and talking to customers. 

We looked at who invested in our industry. We made a map of all those investors and the amounts they had invested.

We used Crunchbase along with friends and connections to network our way into our space. We learned who was who, what they cared about, who they co-invested with, and other relevant information.

Ideally you get preempted and then you raise the rest. That was our approach and it remains the same now. 

It's really about serendipity. We met Tim Draper came through a conference. We were pitching at Block Tank LA where we came second in the pitch competition. 

Tim had us meet him in his office in San Mateo. We had a meeting or 2 with his team and he was in.

The other investors came through similar channels. You are always building up your rolodex of people that you've met and connected with.

Direct outreach almost never works. You’ve got to go through people who know people. You’ve got to go to a lot of networking events and kiss a lot of frogs to build up that network. 

The money almost always comes from places that you don't expect. There's actually a lot of small VCs that are solid, good people to work with. 

We founded the company out in California and realized that there's a lot of VCs across the country that just don't have access to similar deal flow.

If you connect with those people, they’re often very willing to move fast and write checks.

For the pre-seed round, we probably talked to 100 investors before we raised funding. 

We raised funding at the last possible moment, which happens to be a common theme from other founders that I know.

You either get preempted and all goes swimmingly, or it's the last possible moment. 

There's a psychological element to that where you realize that death is staring you in the face as a company.

You psychologically change in the way you present yourself that can lead to that outcome.

For the seed round it was a lot fewer. We talked to maybe 10 investors and Tim preempted it. 

You always continuously build up your network. When we raise our next round, we have a large network in our pocket.

In the early rounds the biggest thing we emphasized was our product. 

We had all the standard bits of a pitch, but the main things that Draper wanted to know were how big the market was, how we knew it was that big, and how we were going to get to the big opportunity.

We then had to clearly articulate a vision of where we were heading. 

We touched on why most people didn’t see it that way, how we were a fit for the market we were going after, and all the product details. 

Unless the investor is specialized in your industry, they're not going to get it anyway and they know it's going to change.

They don't spend as much time as you think they would digging into the details of the product. 

If they think that you're a great operator that is a fit with the problem and the market, if they see that you have a unique insight, and are going after an enormous market, that's what they're going to go for.

We didn't really do this. I've seen that work really well for other founders. It has to be done very tactfully. 

Tactics like that in fundraising can either work wonders if you do it the right way or can completely blow up in your face. 

If you're going to do this, you have to know what you're doing and you have to do it the right way.

The first round’s challenge was getting enough meetings with relevant investors and then knowing how to pitch them. If it's your first time raising venture money, it's a skill to learn.

The second time around it was due diligence. We did not expect that it was going to be so much stuff. We were not buttoned up enough to do that quickly.

We didn't realize we'd need to have all these things in a row in the way that they expected. 

There was some back and forth on terms in basically every one of our rounds. If you're not negotiating a little bit, you're probably leaving something on the table.

If you're working with great investors, there shouldn't be any red flags in your terms. If there is, you probably shouldn't take their money if you can help it.

You never want to say you're fundraising. Make all the investor connections, then when you’re really ready, you tell those people that you’re fundraising.

We learned pretty early on that the main things that investors look for at the seed stage are market and team. 

They know that the product is going to change, and they know that the early traction is probably vaporware in the sense that you're going to have to change it.

If you're not going to build a billion dollar business, you shouldn't be raising VC. If you're raising VC, that’s what you’re going for. 

If you're building a business backed by VCs, you should not be trying to get an exit in a year. You should be looking at a 10-year time horizon and looking to build a long-term, sustainable, billion-dollar company.

The last thing is that it's very easy to get founder envy. Especially in times like 2021 when people are raising insane valuations; you should be focused on running your own race.

Whatever is right for your business is the right thing to do. You need to be aware of what the market trends are and what VCs are funding, but run your own race. That's how you're going to build a great company.

We love Tim. He is the greatest lead we could ask for.

He's super supportive, answers emails within 10 minutes, and introduces us to all of his portfolio companies. He's just an exceptionally great lead investor to have behind you.

One of our other leads is Outliers Fund. For crypto, they make a lot of really high-level connections. It's run by Poseidon Ho who does a great job. 

1414 Ventures is based here in Boston. They invest just in digital identity, so if you're doing that, they're exceptional. They know everybody and they’re really great people to work.

Franklin Templeton's been a good investor for us. 

Samsung Next was also really helpful. They're a point-in-time investor where they'll bring you into the fold. They hosted us in their SF office for a little while and that was sweet.

There are tons, but it depends what is relevant to your immediate next step success. What's helped me as a founder has varied a lot depending on just what it is that I'm facing right there and then.

I would not recommend the standard podcasts as a general founder resource. The ones that really helped me at various points in time were the most helpful.

As an example, when I was having a sales problem, I would binge sales podcasts or see what sales leaders were doing.

Instead of listening to fundraising podcasts, read books, watch YouTube videos, look up old slide decks of other people that have done great slide decks in the past, and build based off of that. 

Constantly consuming content simply to be great at being a founder is an easy trap to get into.

Being a founder means whatever your job is right now. Your job is going to be changing constantly over the first 3 years especially, but then continuously as you keep growing. 

You should be constantly, from a founder-only perspective, optimizing the stuff that you're taking in and what you're trying to learn based on what you need right now and what you're going to need in the next 3 to 6 months.

People think of the valuation as this great metric to track and I see it totally differently. 

You want to raise the right amount of money at the right valuation that you think you can justify growing into. 

That's how you build sustainable growth so you can get to the billion-dollar valuation. Otherwise, there are many pitfalls.

There’s also a huge difference between VCs that have run and founded companies in the past and VCs that have not. You can take money from both and both can be great.

But as a founder, I would highly suggest first looking for VCs that have founded companies because they will understand and empathize with where you're at much more deeply. 

VCs that have not done that before think that they know all of this stuff that is relevant to you because they've read a lot of content.

Most VCs are very impressive people, it's just that they haven't done it themselves. They don't understand that your specific situation is unlike any other in a lot of respects.

I would specifically look for people that have founded companies before that are similar to yours too. That’s the best possible thing to index on. 

I personally can't stand VCs that talk like they know a lot about creating companies when they've never created one themselves. The really great ones either have done that before or don't pretend like they have.