{"id":10417,"date":"2015-11-24T12:34:58","date_gmt":"2015-11-24T20:34:58","guid":{"rendered":"http:\/\/foundersnetwork.com\/blog\/?p=10417"},"modified":"2026-04-15T16:57:11","modified_gmt":"2026-04-15T23:57:11","slug":"understand-your-unit-economics-ten-other-fundraising-tips-from-howard-hartenbaum-of-august-capital","status":"publish","type":"post","link":"https:\/\/foundersnetwork.com\/understand-your-unit-economics-ten-other-fundraising-tips-from-howard-hartenbaum-of-august-capital\/","title":{"rendered":"10 Fundraising Tips With Howard Hartenbaum"},"content":{"rendered":"

Founders Network<\/a>\u00a0had the pleasure of hosting 1-1 Investor Office Hours with Forbes Midas List of Top Venture Capitalists, Howard Hartenbaum of August Capital<\/a>. As an [fn]Investor<\/a>,\u00a0Howard has been a regular mentor to Founders Network members and offered\u00a0plenty of great advice.<\/a>\u00a0This time, FN’ers\u00a0Jeremy Clement of Project Expedition<\/a>, Hubert Palan of Product Board<\/a>, Lee Loughnane of SocialSource<\/a>, Lee Shirani of Storied<\/a> and Samar Birwadker of Good.co<\/a> took advantage of Howard’s vast expertise in venture analysis to get unfiltered feedback on their startups.<\/p>\n

\n

“Advice, like bourbon, is always best straight up.”
\n-@clement_jeremy @ProjExpedition<\/p>\n<\/blockquote>\n

Jeremy Clement of ProjectExpedition thoroughly enjoyed the session. “Advice, like bourbon, is always best straight up, and that is how Howard gives it. He was attentive throughout my pitch, and he followed up with a generous serving of wisdom. \u00a0He validated my strengths and advised on the things I should improve before my next pitch. It was refreshing to get unfiltered advice from someone who has seen all sides of Silicon Valley.” Hubert Palan of productboard elaborated: “When you are raising money you need to be constantly out there testing and improving your pitch. You always wish you knew what investors really think. Office hours like this are priceless – they give you a risk free opportunity to get honest feedback. Howard was great, very attentive and constructive.”<\/p>\n

\n

“When raising money you need to be constantly testing and improving your pitch.”
\n-@hpalan @productboard<\/p>\n<\/blockquote>\n

I made the trek from San Francisco down to Sand Hill Road to be a\u00a0fly on the wall and have compiled\u00a0my favorite bits of advice from Howard during the 5 sessions with our Funded Founders. \u00a0If you’re a founder raising VC funding, I hope you find it valuable:<\/p>\n

    \n
  1. \n
      \n
    1. Establish credibility upfront<\/strong>. \u00a0To get and keep an investor’s attention, you should start with one-liner about what your company does followed by credibility indicators\u00a0like the number of customers, amount of revenue and notable customers.<\/li>\n
    2. Tool is a 4 letter word<\/strong>. \u00a0Don’t\u00a0call your product a tool. \u00a0Don’t call it a platform for that matter. \u00a0Is it SaaS? Call it that. \u00a0Investors are wary of tools and platforms as\u00a0the perceived fail rate is high.<\/li>\n
    3. Demonstrate Quantitative Fluency<\/strong>. \u00a0As Howard so eloquently state, “If you can show me that you think in numbers, it makes me think you’re less likely to waste the money I give you”.<\/li>\n
    4. Are you a winner?<\/strong> \u00a0What notable successes have you had in the past? What metrics did you achieve? How many people did you manage? How many of those did you hire? \u00a0If you can’t say you’ve founded and exited a $300M company, do your best to demonstrate domain expertise.<\/li>\n
    5. Keep your pivots to yourself.<\/strong> \u00a0A common mistake with founders is to share their history but talking about pivots makes you look like you don’t know what you’re doing. \u00a0Why then, would an investor want to give you more money? \u00a0Start your story with where you are today and leave your baggage at the office.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n
      \n

      “Show me you think in numbers and I’ll think you’re less likely to waste my money.”
      \n-@howardh @augustcapital<\/p>\n<\/blockquote>\n

        \n
      1. Understand Your Unit Economics<\/strong>: founders want to show off their products. \u00a0Investors want to know about the business. \u00a0Help them understand the business my demonstrating your mastery of the unit economics like Lifetime Value, Customer Acquisition Costs, Contribution Margin and payback period. \u00a0Side note:\u00a0For a primer on these metrics, check out David Skok’s SaaS Metrics blog<\/a>.<\/li>\n
      2. Test your assumptions before you commit a line of code.<\/strong> \u00a0Howard shared an example of a recenlty funded company who spent 6 months testing assumptions to fine tune their business model and understand their unit economics before writing a line of code. \u00a0As a result, they raised funding and grew rapidly.<\/li>\n
      3. Make sure you and your co-founders are equally committed<\/strong>.\u00a0\u00a0Are you 50\/50 or 80\/20? Better to be the former. \u00a0Are you from same company? Even better yet. \u00a0Bill Draper<\/a> once told Howard that if he came across three engineers from a big tech firm leaving to execute on an opportunity the firm was not moving on, invest in them immediately. \u00a0Chances are they have a track record of working together, have identified a real market opportunity and are committed enough\u00a0to leave a paycheck to pursue it.<\/li>\n
      4. You’re letting investors\u00a0in on a secret<\/strong>. \u00a0Avoid “er” words like faster, cheaper, better. \u00a0You need to persuade investors that you are executing on an opportunity or taking an approach that no one else has thought of or can figure out on their own for at least a year or two. \u00a0That’s – wait for it – disruptive. \u00a0This will give you an advantage in the market and provide the time needed to get to market before the competition finds out.<\/li>\n
      5. The ‘Too Many Customers Problem’ is a classy problem to have.<\/strong>\u00a0 Your goal is to convey a sense of urgency so the investor feels that if they don’t\u00a0give an answer in the next few days, they are going to miss the boat. \u00a0A great way to do this is to presell your product or service to demonstrate demand in advance of raising capital.<\/li>\n
      6. You’re the expert<\/strong>: I love Howard because he’s humble. \u00a0He\u00a0made clear\u00a0that investors, himself included,\u00a0are “just a flyby” so founders should take their\u00a0opinions with a grain of salt.<\/li>\n<\/ol>\n