5 harsh startup fundraising truths by Naval Ravikant

May 07, 2025

* In collaboration with ​DesignForDecks​, the best design service for your pitch deck. Save 15% with promo code CHOSEN15 on a pitch deck design review ​here->​ Highly recommended!

 

** This week's newsletter is also supported by β€‹InvestorLists.VC​ 

Get a free list of 700 active US-based seed VCs when you β€‹sign up​, and a free new list of investors each week: β€‹Subscribe now->​ 

***

  Naval Ravikant co-founded AngelList, and is an early investor in companies like Twitter, Notion, Uber, and many others. He is one of Silicon Valley's most influential thinkers, and his reflections on wealth, startups, and life are compiled in the bestselling 2020 book ​The Almanack of Naval Ravikant​.

Here are five harsh truths about fundraising by Naval:

  1. Cash-constrained startups often outperform: "..it’s just human nature that when you have money you will spend it, and not always for the better. I think it takes your eye off the ball. In that sense, it is true that companies that are at least somewhat cash-constrained do better."
  2. "Valuation is temporary. Control is forever": "Whoever has control can effectively end up controlling your valuation later. Never give up control. And control is given up in subtle ways: A lot of term sheets will have so-called protective provisions that originally existed to protect the preferred shareholders, because they were minority shareholders. But effectively they give those shareholders control over the company."
  3. Raising capital is an emotional sale: "The process of raising money from an investor, a friend of mine once joked, is the process of young men and women seducing old men and women. You’re essentially trying to get them to look at you, and to see themselves in you… And so it is an emotional sale. It is not a rational sale. And you have to understand that at its core level.”
  4. Don't hesitate to back out of a bad deal: "You can learn everything you need to know about a VC during the term sheet process before the close. And don’t be afraid to call off the close if you’re getting negative signals. I’ve done it and I’ve never regretted it. The moment you know that you’re working with someone that you would not work with for the rest of your life, stop working with them right there. "
  5. Build something great and investors will chase you: "I see founders spend too much time chasing VCs for money, when the reality is that if you’re building a great product, fundraising is actually relatively easy. Usually what happens is, when your company’s not doing that well, fundraising is really hard. When your company’s doing great, fundraising is almost too easy and you’re oversubscribed…"

* References/recommended deep dives: ​Naval interviewed by Eyal Gil​; ​Keynote speech (2011)​, ​OFF RCRD podcast interview​ 

***  

More from Meet.Capital:

  1. If you're ​raising capital for a startup or fund​, we can connect you with investors and sharpen your pitch.​ Learn more->​ 
  2.  β€‹Video course: Meet Angels and VCs on LinkedIn:​ A quick and actionable video course to get you in meetings with angels and VCs on LinkedIn.
  3. Special: ​The investor email and message templates that raised millions - 60% off->​ 


 Special offers and discounts from our partners and affiliates: 

  1. Free lists of active startup investors: β€‹InvestorLists.vc​ 
  2. The best equity crowdfunding platform: β€‹Wefunder​ (save up to $50,000 on platform fees with this link)
  3. The best design services for your pitch deck: β€‹DesignForDecks​ (save 15% with promo code CHOSEN15)
  4. Learn to unlock capital from family offices with β€‹The Glassbox​: Save 10% with promo code Meetcapital2025
  5. Israeli startup founders - apply to get free exposure to international investors at β€‹Chosen.Ventures​ 

Three WaysΒ We Speed Up YourΒ Capital Raise:

Connect with Angels and VCsΒ 

Investor outreach and prospecting services.

Meet Investors

Sharpen Your Pitch and Strategy

Tell the right story to raise capital.

Sharpen Your Pitch

Learn to Generate Investor Meetings

Video course with all our know-how.Β 

Investor Outreach Course

Weekly fundraising tips from top founders and investors.

Bonus: a curated list of 500 active US-based seed VCs. Free.

You are subscribing to our newsletter and accepting our privacy policy. Unsubscribe at any time.