I’m Braden Ream and my company is Voiceflow. I dropped out of university to start the company. I had a previous social network company as well. 

My co-founders and I met because they also had social networking companies. 

The company got started while we were building interactive children's stories on Alexa.

Voiceflow was our internal tool — it was all modeled off of Webflow.

Now we're the collaborative platform to build AI agents.

We have a quarter million users, a couple thousand customers like JP Morgan, BMW, Home Depot, and Amazon.

We raised the seed round from True Ventures. That was a $3M round at an $11M valuation. 

Then we raised some in-between rounds with strategic investors. We raised from Amazon and Google at a $16M valuation. 

Then we raised the $20M Series A from Felicis and Craft at a $70M valuation.

And then we raised a $15M round at a $105M valuation. 

I don't even know what to call it because it was not a down round. We raised our valuation because a bunch of VCs got excited about VoiceFlow. 

We didn't need the cash, but they said they’d double the balance sheet for 10%. — I thought that sounded great. In total we have raised about $40M.

There is so much rejection in such a short amount of time. I was doing 3 or 4 meetings a day for a month — you just get worn down. 

You do the meetings in the morning, you get the rejections in the evening, and you just keep rinsing and repeating.

I didn’t know during the seed round — I was just meeting with everyone. Over time you start to understand which firms have a good reputation and which firms don't. 

You can ask people about the ones you hear about that have a reputation — it's the ones you don't hear about where I get suspicious. 

If you're in a Series A or B, you should have heard of the fund before. If you haven't — have you heard of the fund that the partners came from? 

If it's just a complete no-name fund, don’t automatically avoid it — you need to do some extra digging to see who they are.

In the early days the partners can be especially important because they will also help you run your business more effectively — along with introducing you to collaborators. 

As the business grows, having brand name VC firms on your cap table creates a lot of buzz and opportunity. 

Once you raise a seed round from a respectable fund, people just reach out. 

You start to build a network and you get invited to things — it just organically comes. 

That first round is the hardest though when you have no ‘street cred’ at all. For us it all came through Ryan Hoover.

Ryan wrote a small check in the early rounds and hooked us up. We wouldn't be here without Ryan — I say that genuinely.

For our Series A, we probably did 15 first time meetings. I don't take meetings with firms I would never consider. 

I was pretty confident we were going to get a round done — we had the metrics and the markets were good. It was 2021. 

During our Seed round I met with a lot of firms that in hindsight, I wouldn't have wanted to work with. You need to get a term sheet to be able to have leverage.

You need to have at bats to improve the pitch — especially at seed when you don't really know what you're doing. 

If I was to run a seed process again, I would meet with a bunch of firms where I wasn't super excited about them.

I'd get all my no's out of the way. I'd get all my objections. I'd get a feel for the pitch, the story, and the flow.

Then I'd have all my ideal target firms at the tail end of the process.

We emphasized the traction we had with users and customers. We had a few thousand users and about $50K of annualized revenue at the seed round. 

We also emphasized the technology trends we were taking advantage of. 

The rational tool of a conversational interface is an industry-centered tool design. Platform shifts occur once every 15 years.

Each shift requires a new wave of creative software and pro tooling — Voiceflow is going to be that for AI assistants. 

Modern business automates their number of conversational channels. In-house teams are now forming.

The tools they have are not good — we gave them the solution.

Like enterprise sales, you have to create urgency. I did our first $500k of sales at Voiceflow. 

If you think you’re going to get a term sheet, start letting undecided investors know there are some firms that are really excited. 

Now you've created urgency. You don’t say you have a term sheet and you didn’t say anything is guaranteed — you just feel it.

It has this funny way of actually manifesting because then the firm has urgency to get their term sheet in line with the other firms.

It's a really fine line to create that urgency. If done well, it's a great tactic to use. 

For the Series A we had a couple of firms that were really excited.

They were doing their due diligence and were digging into the numbers.

I told them that I believed that week we were expecting term sheets. 

Suddenly they were running an accelerated process to line all the meetings up. 

Condense the process to be super high pressure.

The seed round was tough for me at the time. The process took about a month and there was so much rejection. 

You do the meetings in the morning and get a rejection in the evening — it was brutal. 

Investors come in two flavors. They come from funds that connect and funds that lead.

They should either be a connector fund where they're generally not leading checks — like Ryan Hoover's Weekend Fund. You take their money to connect you to additional funding.

Once you have capital, you're actually de-risking the business, which gives the business value.

The other types of investor are the leads. They will write the check that gets the round done. 

If an investor is unable to connect you to other capital, or they are unable to lead rounds then they just don’t add a lot of value. 

Either raise more, or raise less. You have to know the game that you are playing. If you know what you're doing — raise less. 

If you don't know what you're doing — raise more.

That sounds like it should be flipped.

The reason is if you don't know what you're doing, you're going to need more runway and time to figure out what you're doing. 

If you know what you're doing, the ideal fundraise would be running out of money on the day the next check hits. 

That's the most dilution-efficient way to run your business. It's impossible, but that'd be the perfect way to do it.

Ryan Hoover was very important to our early success.

YC has a blog post that is the definitive blog post to raising money.