Most founders are playing the fundraising game wrong. Not because they aren’t smart, but because nobody ever tells them what’s actually happening on the other side of the table.
I’ve been on all sides of this. I’ve fundraised as a CEO, made angel investments, and sat with hundreds of founders helping them think through their raises. The single most consistent mistake I see is timing. Founders treat fundraising as something you deal with when you’re running low on cash. By then you’re not raising. You’re begging.
“I tell some people on the day that they raise their round to create the deck that they’re going to use for the next round,” Nick Moran, founder and general partner of New Stack Ventures, told me on this week’s episode of Not Another CEO.
Nick started New Stack in Chicago in 2015 with a thesis most VCs wouldn’t touch: back the founders building outside the Bay Area, outside the obvious networks, in the places most investors aren’t looking. The fund manages close to $100 million and has backed more than 60 companies at pre-seed and seed. He also hosts Full Ratchet, one of the first venture capital podcasts ever made, now closing in on 1,000 episodes. Doing it for over a decade is a different level entirely.
What stood out most in our conversation wasn’t just how Nick finds the founders everyone else is missing. It was how clearly he’s thought through every part of the founder-investor relationship, from that first meeting, to how you communicate when things go wrong, to where the smartest capital in AI is actually moving right now.
Here’s what I took away.
The best founders don’t jump off the page
Most VCs are trying to draft Peyton Manning: obvious, expensive, can’t miss. Nick is hunting for Brady. “There’s talent there,” he told me. “It doesn’t jump off the page for whatever reason. But even more than talent, there’s this insatiable ambition, desire, self-belief. People that are going to overcome the odds, over-perform and drive real results.”
I’ve believed this from my own experience hiring people. The ones who look perfect on paper are often the hardest to work with and the least likely to figure things out when the plan falls apart. The ones with something to prove, who didn’t get the obvious path, those are the ones who find a way.
His test is simple but brutal. He watches behaviour across two months of diligence. Do they get back to you fast? Do they miss details? Do they come after you and show genuine hunger? You either see it or you don’t. You can teach skills, you can’t teach desire.
The fundraising game starts eighteen months before you think it does.
Founders close a round, breathe for a second, go back to building, and don’t think about the next raise until they need it. Then they scramble to build relationships with investors they’ve never met, pitch into a cold room, and wonder why it’s so hard.
Nick calls his version of the alternative the Next Round Plan. It starts with getting clear on the business you’re actually building, because a SaaS company, a marketplace, and a deep tech company all get judged by completely different Series A standards.
Then you set North Star metrics and here’s where most founders get it wrong. Revenue is a lagging indicator. By the time it shows up, the decisions that created it happened weeks ago. Track leading indicators instead, things like total demos or calls completed in your ICP, so you can see momentum before it hits the P&L.
Then build a target list tied to your actual story, not the same fifty people everyone else is pitching. And start all of it the day you close this round, not the day you need the next one.
Bad news should travel fast.
This is a lesson I learned the hard way and I’m embarrassed it took me as long as it did. I was always scared to give bad news to my investors. I told myself I was trying to solve the problem first. What I was actually doing was waiting until the board meeting and watching my investors find out something had gone wrong the day after the last time we’d spoken.
Nick described exactly what that looks like from their side. “It’s the founders that kind of go dark on you for six to eight to twelve months. You start to worry about that behaviour expressing itself in other forms.”
And then: “In some cases, they can help you. You would never think they could help you. And then one of your investors pops up and says, actually, the CEO of that company was my college roommate. Do you want to get on a call together? And then boom, you save it based on relationship.”
The investors who watched you communicate honestly through the hard quarters are the same ones who show up with a lifeline when you need one. Monthly updates, ad hoc texts when something big happens. That’s it. Most people just don’t do it..
Being an outsider is the whole strategy.
Nick grew up as a competitive swimmer, got to Indiana, and quickly realised there were a lot of people better than him. He wasn’t going to land the best job on Wall Street or in Silicon Valley either. That realisation became the entire thesis behind New Stack.
He was first to the VC podcast format, which gave him reach in markets no one else was touching. He hosts breakfasts in Chicago with fifty-five founding partners. Two of them will write a lead check for a pre-revenue company. Two. So if you’re building in Chicago or Nashville or Charlotte with no revenue, your realistic options just got very short very fast. Nick fills that gap on purpose, and thirty-three of his podcast guests have gone on to back his portfolio companies at later stages.
If you’re building outside the obvious places, stop competing on the same terms as the people inside them. Find the room where there are only two people like you. That’s where the real opportunity is.
The smart money just switched sides of the barbell.
For the better part of a decade, every serious AI dollar went into infrastructure: chips, data centers, foundation models. Even the best VCs were plowing capital into that side. The constraint was compute, then algorithms, and the money followed.
Nick says that’s shifting. “The majority of money is still going into infra, but it’s all the sovereign wealth and the crossover funds. Guess what happened to all the smart money VCs? They’ve moved to the other side of the barbell.”
The constraint has moved to data, and the most valuable data is buried behind enterprise firewalls. Financial transaction data, healthcare patient data, customer behaviour at the industry level, none of it is accessible to generalised models that can only scrape what’s publicly available.
The founders who win the next decade are the ones already living inside those industries, with the trust and domain knowledge to unlock that data and build products that get better the more you use them.
What this means if you’re building right now.
Do you want to be great or do you want to be happy? Because we’re not going to be happy for the next ten years.
Nick said that near the end of our conversation and I haven’t stopped thinking about it. Not because it’s dark, but because it’s honest in a way most people aren’t willing to be out loud. The people who build things that matter make a real choice about what they’re optimising for, and they make it over and over again.
If you’re a founder trying to understand how investors actually think, or where to spend your energy before your next raise, this episode is worth your time.
Key Takeaways
Start the next round on the day you close this one. Build the deck, set the metrics, and build the relationships before you need them. By the time you need them, it’s too late.
Pitch desire, not credentials. Before your company, before your market size, before your team slide, an early-stage investor wants to understand who you are and what you’re made of.
Bad news travels fast or it travels badly. The investors who support you through hard moments are the ones who saw the hard moments coming. Go dark and you lose that.
Find the room where there are only two people like you. The arbitrage isn’t in the obvious places. It’s in the markets, geographies, and founder profiles that the rest of the field is ignoring.
The constraint in AI has shifted from compute to data. The application layer is breaking out. The founders who win are the ones already living inside the industries with the data nobody else can access.
Make it easy for your investors to help you. Vague asks get vague results. Specific asks unlock real value from the people who are already in your corner.
Quote of the Show:
“Do you want to be great or do you want to be happy?… So I tell that to founders we're backing. You better be ready, for the big game here because this is not an easy path. We're not going to be happy for the next ten years.” - Nick Moran, Co-Founder & General Partner, New Stack Ventures.
Links:
New Stack Ventures: https://www.newstack.com/
The Full Ratchet: https://www.youtube.com/@nicholasmoran3095
Ways to Tune In:
Substack:
Spotify:
Apple Podcasts:
Chapters
00:00 - Trailer
01:30 - Welcome Nick Moran, New Stack Ventures
03:54 - Why desire is the ultimate founder trait
10:02 - First impressions and the dating phase of investing
15:34 - Founder-VC fit is like marriage
20:56 - The Outsiders thesis and building a national network
27:48 - Inside the Next Round Plan (NRP)
32:20 - Communication, bad news should travel fast
39:00 - What founders misunderstand about the VC side of the table
42:10 - Where the smart money is moving in AI & Closing thoughts
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