Hello! 

I'm Tyler Maloney, Founder and CEO of TeachMe.To. We're building a marketplace for in-person learning. You can think of us as Airbnb but for learning new skills like sports, music, and art. We just closed a $5M seed round and our journey has been an exciting one. In past three years, we’ve grown from delivering 5 lessons a day in 2022, to 40 in 2023, and now over 200 a day in 2024. This is our third funding round, following a $500K round in 2022 (friends & family) and a $2M pre-seed round in 2023 (1984 VC and Sam Altman among others).

About Me

I'm a three-time founder and have raised around $25M across my ventures. This was the eighth fundraising process I’ve led. I hold an engineering degree from NC State and an MBA from Stanford. After six years in the Bay Area, I recently moved to Philadelphia to support my wife as she pursues her graduate degrees at Wharton.

Our Raise

We conducted a highly structured fundraising process and it took about 2.5 weeks to go from the first email to a signed term sheet. I’ve seen a lot of general fundraising advice on Twitter, but I have yet to find a “how to” guide so I wrote one here. Hopefully, it’s actionable and will help other founders run an effective process and secure a great deal!

Before the Raise (3 weeks)

  1. Timing: We were planning to raise in Q3 this year, but we had three great months to start off 2024 so we decided to strike while the iron was hot. We used the first three weeks of April to prepare our process and closed by mid-May.

  2. Preparation: From the moment we decided to go for it, it took about 3 weeks to actually kick off the raise. We prepared a handful of documents: (a) a teaser deck, (b) a meeting pitch deck, (c) a target list, (d) a cold outreach email template, (e) a warm outreach email template, and (e) a data room. We drafted these documents ourselves and then went back and forth with our pre-seed VC and a couple of our most savvy angel investors.

  3. Documents

    1. Teaser Deck: The goal of the teaser deck is to get a first meeting. We thought of it as a sizzle reel. We put our best foot forward so that anyone looking would want to at least take a meeting to learn more.

    2. Meeting Pitch Deck: The goal of the pitch deck was to get a second meeting. Most VC meetings are 25 minutes. We wanted the pitch to take 10 - 15 minutes and then preserve time for objection handling. So the deck was about 15 core slides and 30+ appendix slides we could flip to that helped answer common questions during Q&A.

    3. Target list: We listed 100 VCs we thought could invest in our business. We went after Partners where possible. We went after individuals, not firms. We looked up their prior investments and thesis. We also tiered the investors into 1s (creme de la creme), 2s (would love to work with) and 3s (worth a conversation). We then sent the list around to our investors / contacts and asked them to jot down who they could intro us too. At the end of the day we had warm intros to about 70 and had to reach out for cold intros to about 30.

    4. Cold outreach template: The average VC will look at your teaser deck for 20 seconds (I have the receipts from DocSend!) so this is really important.The goal of the outreach template is similar to the teaser deck: get a meeting. Our email structure was simple. Opening line, 3 bullets to highlight our greatest strengths, and a CTA to schedule time during the week we were taking first meetings.

    5. Warm outreach template: This was the same as the cold outreach template but the opener was written from a friend or colleague. Something like “I invested in these guys, I’m really impressed by their execution and I think you should take a look.”

    6. Data room: We worked with our pre-seed VC to put together our data room. It consisted of historical financials, a pro forma model, our cap table, a CSV of our sales data, and critical analysis we knew we’d be asked for (like cohort retention analyses for both sides of the marketplace).

Kicking Things Off

  1. A tight timeline: In the email we told investors we’d be taking first meetings for the next week and we meant it. We set up our calendly to only allow them to schedule for the next week. 

  2. Sequencing: We reached out to all our 2s and 3s on a Sunday night. We then reached out to all our 1s on Monday night. This meant our Monday/Tuesday filled with 2s and 3s so we had a warm up before meeting with our 1s (creme de la creme).

First Meetings (Week 1)

  1. 60 first meetings: We took about 60 meetings during Week 1. Out of the 100 investors we contact, 60 scheduled in week one, 20 asked to meet at a later date, and 20 were not interested.

  2. Getting past the gatekeeper: First meetings are about getting past the gate keeper. They’re usually with just one investor who will vet you to determine if it’s worth the time of bringing in other senior partners.

  3. Absolute insanity: Week 1 was insane. We did first meetings virtually. For 12 hours a day, we were either pitching or iterating on our pitch based on the feedback we were receiving. By the third day, it started to get really smooth and we knew how to position the business.

Second Meetings (Week 2)

  1. 40 second meetings: Roughly 40 of our 60 meetings from week 1 converted into second meetings.Several firms wanted to meet in person, so we flew out to SF for week 2.

  2. Getting the partnership onboard: Second meetings are when things get serious. If you have a legitimate business, you’ll get a lot of second meetings. But that’s when things get real. They’ll bring in multiple partners and think hard about your business. Very few second meetings convert into the next phase: offers (for faster firms) or partnership pitches (for slower, more bureaucratic firms).

  3. Pitching from an Uber: Week 2 was a total shit show. We drove back and forth between SF and South Bay up to 4 times a day. We pitched from the Uber in between. We were trying to squeeze in as many meetings as we could. It was absolute madness.

Closing (Week 3)

  1. First Offer: We got our first offer on Monday of Week 2 (8 days after we started our process).

    1. Once someone offers, their goal is to close you quickly. They don’t want to have to compete on price and terms with another firm. They will tell you that you have a deadline to give them an answer.

    2. We clarified that this was not how we were doing things. We told the investor this was a huge decision and we wanted to get it right, so we’d be taking the rest of our meetings and then see where we’re at.

    3. If you are firm when you state this, any respectable VC will be okay with it. Just don’t give into the pressure tactics. They're just trying to do their job.

  2. Second Offer: In Week 3, we got a second offer. Once we had completed our processes with all of our Tier 1 and 2 target investors, we started negotiating with both firms. We let them both know we had multiple offers, we told them what we wanted and we negotiated to get what we wanted.

  3. Bling Capital: We decided to go with Bling Capital because they provided the best combination of (1) a team we liked and (2) an offer we liked. They’ve been awesome to work with so far and we’re very excited about the future.

  4. Filling out the Round: After signing a lead, we called the non-lead investors we liked and offered for them to participate and fill out the round. We were very excited to get the opportunity to work with Marketplace Capital.

Principles and Learnings

  1. VC is a FOMO business. By default, their decision psychology is “invest or wait and gather more data” and they will always wait. You have to force their hand by changing the decision to “invest or miss out”. You do this by running a tight process, talking to a ton of firms, and becoming the center of the VC zeitgeist for a few days.

  2. You don’t have a deal until it’s signed. We had five firms give us a verbal offer. Only two actually materialized into signable documents. Don’t get too excited by a positive reaction! A VC’s job is to make you feel like the most important person in the world right up until they make a decision. It’s about preserving optionality… if they offer you a deal, they want you to say yes. So you’ll get a lot of “false positives”. It’s not personal, it’s just business.

  3. Everyone wants to feel loved. VCs are no different than you. They are people with egos and ambition who want to feel like they’re the next big thing. You want to feel special; they want to feel special. Make sure they understand why you specifically want to work with them based on their portfolio, experience, skills and personality.

  4. Fundraising is a game of supply and demand. Think back to Econ 101. If you want price to go up, you need demand to outpace supply. So if you’re raising $3m, you want $10m in offers. That’s how you go from being a price-taker to a price-maker.

  5. It’s a hard time to raise. Frankly, I’ve raised a lot more money on a lot less. TeachMe.To is humming right now. We weren’t selling an idea, we were selling a growing business with great unit economics and 10x YoY growth. And yet, out of 100 investors we contacted, we ended up with just 2 lead offers. Wow. Recognize this going in… it’s a hard time to raise especially if you’re not on trend (read: AI). As a result, you need to run an even more professional process than ever and give yourself every chance you can to win.

I hope you find these insights helpful. 

Tyler