How I raised a $11M seed as a first-time, female, solo founder for a biotech moonshot
In January 2020 I closed a $5.1M seed round, my first financing for my first company. I’ve closed another ~$6M since then. This is how I raised that first round.
Why I’m writing this
There are fewer example of female solo founders — or even female CEOs — who have successfully raised large amounts from venture capitalists. In biotech & moonshot companies, the numbers are especially disastrous.
I hope this is helpful to other founders, especially those who do not fit the pattern or are building something a little more crazy!
My advantages in fundraising
I would like to acknowledge a couple of advantages I have that made raising significantly easier:
I worked in venture capital for two years at a fund specializing in the area my Loyal is in (so I had a preexisting VC network, was seen as a bit of an ‘insider’, and the fund invested in Loyal, which was good signaling).
I was previously a Ph.D. candidate at Oxford in a relevant field & have a B.Sc. in neuroscience from UT Austin (so I have ivy-ish credentials).
The company & target VCs
Loyal is developing drugs to extend dog lifespan and healthspan. I’d put us in the incipient consumer bio category.
I raised the seed for an idea and deck. I did not have a co-founder, a team, and did not discover the science behind the company. I do have significant domain expertise, a specific and strong longevity network, and exceptional founder-market fit.
I targeted Silicon Valley + NYC tech & biotech VCs. While their biotech expertise is unparalleled, I did not talk to traditional East Coast biotech VCs as I don’t believe I fit their implicit founder thesis and their standard deals for pre-lead drug biotechs are generally very dilutive (think — selling 50–80% of your company! Although for much more money than I raised here.)
Generally speaking, West Coast biotech investors loved the science but got stuck on the pet market and whether it could support a $1B+ company. Tech funds salivated over the market, but needed more time to get comfortable with the scientific risk. In the end, my cap table ended up largely being tech VCs.
|| How I did it ||
1. Serendipity kicked off the process
One of the best parts of being in Silicon Valley, and in my opinion one of the most important reasons to be here if you are not already established, is the serendipitous encounters. Loyal’s raise (then called Celevity) started with a camping trip in the South Bay. Sitting around a campfire, I was chatting with some friends about how I thought I had an idea for how to make dogs live longer. An angel investor at the camping trip told his friend, and that friend ran into Greg Rosen at YC demo day. They ended up chatting about my idea — Greg had an incipient thesis around pet genomics and asked to meet me.
At this point, I wasn’t actually planning to start a company. But I grabbed a coffee with Greg regularly over the summer to riff about dog longevity and genomics. These conversations eventually solidified into what is now Loyal. While this was happening, I took a lot of time to personally mull over whether I wanted to leave my job, start a company, and whether I thought this was the best way to have my impact. This was a hard decision — I never saw myself becoming a founder. When we both had conviction, Greg offered to kick off the round and gave me a term sheet.
2. Round sizing & term sheet strategy
I decided to go out for ~$4M. I calculated this by mapping out the costs to hit what I thought would be key seed milestones and then adding a healthy 40% buffer. Greg and Longevity Fund put in about half, we decided on deal terms together, and then went out to find a co-lead for the round on those terms.
I lost a lot of investors because they either wanted more ownership than was possible with half of the round already filled, or because they thought the deal was too rich.
I chose to not shop around the term sheet, which I technically could have done if I wanted to try to find a better deal. I appreciated the time Greg had put into seeding the company and supporting me as a founder, I wanted to work with him in the long term, and I was happy with the financials of the deal and did not think going for a higher valuation would necessarily be advantageous to building the company.
Generally speaking, my prioritization in raising this round was:
Getting the capital quickly & efficiently > Partner fit > Fund strategy > Fund brand > My dilution.
While I was obviously unwilling to take a bad deal, being a solo founder allowed me a bit extra flexibility in deal terms and — in the end — allowed me to comfortably oversubscribe. I was willing to trade a few extra points of dilution to increase the probability of success of the company, which in biotech often correlates directly to capital in the coffers.
3. I talked to a lot of investors in a systematic manner
I made an investor CRM with 157 investors who I thought this deal would be in thesis. Here is my CRM template: https://docs.google.com/spreadsheets/u/1/d/1gMqneD1sX3Ix29Lezh5KNMUkzzVuRIdtiRdTzJ8jBPU/edit?usp=sharing
I shared the CRM with my existing investors, asked for feedback and advice for specific investors, and then assigned introductions based on who knew who the best. I then pestered them like crazy to do all the introductions in the same one week period.
Once I got introductions, I scheduled all my meetings for the following two weeks. This is important — so many seed founders have these long, dragged out financing processes. This kills excitement for the deal, and most deals die because of time. By keeping all the VCs on the same track, I didn’t allow any investors to drag out our deal and got to yes/no’s much more quickly. This also meant that I lost a decent portion of investors who didn’t want to do a seed deal on the short timeline I was implicitly demanding (and a surprising amount who just replied to emails too slowly to play ball!)
I ended up talking to ~65 investors (many more rejected/ghosted the intro or I couldn’t find a way to reach them besides cold) in a 1.5 month period to get the deal done. Of these, 17 invested. Thats an approximately 11% hit rate from my initial target list. The first 80% of the round took ~2 weeks to subscribe. The last 20% took ~3 weeks.
4. I focused on VCs first, then filled out the round with angels
I started with VCs. Once I had the round 80% full at about three weeks in, I switched to filling out the round with angels. You can do this in either order of operations — angels are a good way to get to VCs if you do not have a VC network, especially ‘brand name’ angels that are considered domain experts in your field.
I found that filling the last 20% of the round was much harder than filling the first 80%. The last 20% took me ~3 weeks to subscribe, during which there was a two week period where not one person converted! We ended up super-oversubscribing, so don’t worry if this happens to you — just push through it.
5. I constantly iterated until I found “product-pitch fit”
I iterated heavily with the new data I got from every pitch. By the end, I was getting a pretty high conversion rate from each pitch — let’s call this finding PPF (product-pitch-fit). I in part found “PPF” because I paid a lot of attention to body language during each pitch, and what specific phrases caused people to be excited, lose interest, get bored, get engaged, etc. I also asked for feedback at the end of most pitches and pushed to get something constructive out of every investor I talked to, either on my pitch or my personal communication style.
I had a very large deck — 80+ pages. The main presenting deck was a high level, text-light, image-heavy overview of ~20 pages, but referenced a detailed appendix for every point made. This helped VCs appreciate how much I knew about the subject and how much research I had done, but didn’t overload them when first explaining the story. This is especially important if you a bio company pitching investors who are not technical in your field.
|| Mistakes I made that you shouldn’t ||
I made a number of mistakes while raising this seed!
‘Burner’ pitches
I front-loaded many of my favorite funds in the first week of pitching. This meant my pitches were not very good. For one fund I quite liked, I realized my pitch was bad and pivoted the story on the Uber over. The new story was better, but unrehearsed and rough. They passed, along with basically everyone else I talked to in week one.
The Lesson: Practice your pitch on as many people as you can before going out, and even then, expect your first pitches to not be great and plan your strategy accordingly.
Overestimating interest
It’s a VC’s job to keep the door open. Many were ‘blown away’, then passed before the second meeting. This is normal. You’ll look like an amateur if you quote someone’s overestimation as commitment like I did.
The Lesson: It’s not a yes until you get it in writing, and even then it’s not really a yes until you get the $$$
Not personalizing the story
Each investor has a different perspective and therefore different risk points they’ll be the most concerned about. You can figure this out from their past investments, their technical background, and fund ethos.
The Lesson: This is instinct based, but you can find hints on what resonates with a specific investor by talking to port co’s, checking their Twitter, Medium, blogs, Crunchbase, Pitchbook, etc
Getting the minutiae around time pressure wrong
I didn’t give the funds that wanted time to get to know me as a person and founder the time to do so. This led to one heartbreak with a fund that I probably could have converted if I had given them more than 24 hours to decide!
The Lesson: Try to figure out how each fund likes to build their relationships with founders. Some funds will only give you one shot and you should only talk to them when you’ve found PPF, others like to get to know the founder over a longer period of time before investing.
Way too much of a people-pleaser
I tried to please everyone by giving the minimum timeline for achieving X milestone; while it is so painful for Type A personalities, you need to double these timelines always. Experienced VCs will label you as an amateur when they realize you’re not doing this. My pitches got a lot better once I started doing this.
The Lesson: Double all your capital and time estimations, and include time for ramp up for hiring, getting lab and office space, etc.
Not empathizing with the investor perspective
Probably the biggest mistake in my story was around the scientific de-risking and strategy, and not thinking enough about how an investor would perceive the narrative of how I would use the seed capital to create more value.
We are developing drugs against a specific protein. There are multiple ways to drug this protein.
I pitched it as: “Look how many ways we can drug this protein! Even if ways 1, 2, 3, n+1 fail, we can still find a way to drug it! I’ve powered the seed to be able to explore all these ways of drugging this protein!”
VCs heard: This company is a science project that will burn a ton of money on R&D before having a lead product — if they even get that far.
What I should have pitched: “We are going to develop [X specific drug].” If the VCs pushed back on this, then I should have talked about the other ways to drug this protein as a back up.
As a note, so many people told me this. I didn’t listen to any of them until the very end. It’s painful as a bio founder to think like this!
Hesitating to acknowledge the risks
Especially when talking to tech VCs, I felt uncomfortable acknowledging the risks involved in developing our drug. I’m super risk minded — it’s how I organize my life — but I was a bit paternalistic with some VCs when I thought they wouldn’t have the right framework for understanding and categorizing biological risk. This was logical, but it made these VC’s think that I didn’t understand the risks of what we’re building, and therefore made me an untrustworthy narrator of my story.
The Lesson: This one is a balancing act, especially if you’re a bio company pitching tech funds, but generally speaking be ready to candidly speak to the risks of your company.
|| Other things to note ||
>> I kept a document tracking why people passed, which I read often and used to iterate my pitch. One framework I used was “valid” vs “non-valid” reasons for passing. A valid reason to pass was differing thesis around something that wasn’t a fact (e.g., consumer behavior for a new product), lack of VC-product fit, deal dynamics, etc. A non-valid reason to pass was due to a misconception around a fact that was caused by my not communicating well enough. I tried to minimize non-valid reasons for passing.
>> Give compelling soundbites. VCs see decks all day every day and are likely championing multiple deals at once; even if you are excellent, it is easy to get drowned out in the noise. Embed in your pitch compelling, easy-to-remember, short phrases that the VCs can use to convince others (and themselves).
>> It’s ok to say ‘I don’t know’ in response to a question. When asked questions I didn’t have an answer to, I tried to always acknowledge as such and then give my thesis on the answer and data as to why I think that. This can be really hard in the moment (see: people pleaser!)
>> I flew to NYC to literally grab a slice of pizza with the Partner that ended up co-leading the seed. I’m terrified of flying and it was super expensive! But, it was the best thing I could have done and set the relationship off on the right foot. Value the personal connection behind the business relationship.
>> Try not to take no’s personally. It’s hard not to, especially at the seed when the whole deal is basically a bet on you and their belief in your ability to figure it out. You’ll get a ton of no’s and if you get upset every time you’ll go crazy. That said, expect to be emotionally drained by the process. That two-week period when not one person said yes was brutal. You’ll question yourself, your idea, your sanity! You’ll just have to push through it.
>> Ask for help with etiquette around communicating with VCs, managing time pressure, and the social side of raising. It’s really easy to get wrong and takes years to master, so shortcut the process by getting advice from others who already have.
>> Your deck probably sucks (mine sure did, and I’ve seen 100s of decks!) — get a lot of help here and consider hiring a designer if you aren’t design-minded.
>> VCs are people — be nice and helpful and it’ll get you far! In my case, I offered to diligence bio deals for tech investors I liked, whether or not they ended up investing. Another investor who initially passed came back in and put in a major check in part because I made it clear why I really wanted to work with them. I still email and chat with many of the investors who passed.
>> Investors who support you without reservations and convert based off of independent thought (not groupthink or signaling) are worth their weight in gold. Treat them extra well!
I experienced surprisingly little bad behavior or sexism, but struggled to get any women on my cap table.
I had multiple ethical debates with myself & my investors about whether to let men who had previous sexual harassment scandals into my round. It is depressingly challenging find funds that do not have some skeletons — which makes it difficult to decide whether to prioritize an easier raise/a successful raise, or your morals.
It’s been proposed that female founders get asked ‘negative tilted’ questions more often than male founders. I felt this with multiple firms, although it could be confounded by the increased ambition/risk of what I am building relative to your standard B2B SaaS company.
I heavily prioritized female investors. Every time a (male) investor converted, I asked them to help me find female investors. However, female investors were harder to find, slower to reply, ghosted me more often, did much more diligence, and were harder to convert. Almost all complained about my valuation, despite multiple male-led companies raising at the same valuation at similar stages and the known issue with women raising at lower valuations. Happily, I’ve been able to get more women into my future rounds.
All in all, my hit rate for female investors was much lower than male investors. This was disappointing, and I wish more women were on my cap table. I have already had specific situations where I wished I had multiple woman on my cap table to talk to and get their perspective. Upon reflection, I likely accidentally optimized my fundraising strategy and pitch for male VCs and their style of investing. I don’t think I’ve cracked the nut here on how to get similar hit rates among male and female investors unfortunately.
Bloopers
Life is too short (pre-Loyal 😉) to take seriously. If you’ve met me, you know I’m very casual regardless of the setting, have a lame sense of humor, and can be pretty awkward. This led to a few hilarious-in-retrospect moments (all these investors ended up passing…):
Saying the phrase “VC helpfulness gold star” to a very established, very straightedge, very unamused VC
Making a joke about disrupting GoGoAir to a VC who invested in them
Can’t spell aardvark. Fail 3x. VC has to type it for me.
“Yeah none of the partners here have a dog and [X head partner] actually really hates dogs”
Making a comment about how fun it has been to see inside of the Sand Hill Road VC offices … to a VC who was very much not on Sand Hill Road
The boyfriend VC incident tweet which all the VCs I was talking to ended up seeing
