Build the Round You Could Walk Away From.
What investors quietly read for in a pitch, and how to set up that read before the round starts.
I write for founders and executives navigating the tough parts of scaling.
This issue was inspired by my recent conversation with Sarah Romanko, early-stage investor, advocate for immigrant founders at Geek Ventures, and mentor to aspiring VCs. If you haven't listened to the episode yet, it's worth your time.
When you read your own pitch back, do you sound like a founder evaluating capital, or a founder needing it?
Investors can tell the difference in three lines.
The Belief Worth Challenging
The dominant story about fundraising tells founders to polish the deck, project conviction, and close on the strength of the narrative. Most of that advice is correct as far as it goes. The deck matters. The narrative matters. The team you put in front of an investor matters more than either.
There is also a quieter factor running underneath the surface mechanics, and most fundraising playbooks underemphasize it: whether you actually need this round to close. The founders who close the strongest rounds tend to be the ones who could keep building if they didn’t.
Anyone who has spent time on the other side of a deal table can tell the difference. The deck looks the same and the conversation sounds the same, but underneath, one founder needs the round and the other doesn’t.
Investors who pay attention can read it through every interaction. The deck, the answers in the call, the way you handle pushback, the email you send three days later: each one carries a signal about how much you need this round to close.
This week’s guest, Sarah Romanko, sees this run through deal after deal from the inside. Her advice on fundraising mechanics does not start with the deck. It starts with whether you should be raising at all.
What It Actually Looks Like
Sarah’s read on what fails in cold outreach is uncomfortably blunt. She has memorized the bad ones. These are two real messages from her inbox.
Message 1: “We are building a multifamily real estate company, like a holding company. Would you be interested in investing?”
Message 2: “Hi, first name. This is what we’re building. We saw you invested in a SaaS company, so we think you’d be interested in our SaaS company.”
Polish would not have saved either one. Both messages share the same tell: the founder did no reading on what Geek Ventures actually backs before hitting send. Five minutes on the fund’s website would have rerouted either of them. The founders sent anyway.
The winners look different. Three lines, a clear story, a specific reason the fund fits. Sarah describes the structure that consistently earns a meeting:
Hi Sarah, the two portfolio companies that suggest fit, what is complementary, the actual traction number, the market, a one-line read on the team, the amount being raised, a request to chat, a deck attached, a Calendly link offered.
Nine elements. The founder is presenting as an evaluator.
The same pattern shows up on the call. Sarah is direct about what she reads for once a founder is in front of her.
“I really want a founder that is not afraid to take feedback, but knows when they’re not just going to blindly agree to everything that we tell them.”
She loves founders who push back substantively. She loses interest in founders who fold to every comment or feedback. The founder who says “great feedback, but let me push on this” is signaling that they actually have a thesis. The founder who immediately agrees with whatever the investor said is signaling that they may not be clear on thesis of their own company.
The hardest piece of her advice, and the one that closes the loop on everything else, runs against her own VC interest.
“If your company is doing well, you don’t feel the need to raise. Don’t raise just to raise.”
If this resonates, forward it to a founder running a round right now.
What the Research Actually Shows
VCs back the team over the product.
In a 2020 study in the Journal of Financial Economics, Paul Gompers and colleagues at Harvard, Chicago Booth, and Stanford GSB ran a large-scale survey of how venture capitalists actually decide. They reached 885 institutional VCs across 681 firms in the United States.
The survey asked these VCs to rank what mattered most across eight different parts of the venture process: how deals get sourced, how they get selected, how they get valued, how they get structured, how value gets added after the check clears, how exits happen, how firms organize internally, and how they manage limited-partner relationships.
The headline finding from the selection question has held up. Across stage, sector, and check size, VCs ranked the quality of the management team as the single most important factor in their decision to invest, ahead of business model, product, technology, and market. When the same VCs were asked what determined whether an investment ultimately succeeded or failed, they again attributed more of the outcome to the team than to the business itself.¹ The paper won the 2020 JFE Best Paper Prize.
The implication for a founder running a round is concrete. Most of the deck is talking to a slot in the investor’s brain that is weighted lower than the thirty minutes of the call. The deck reassures, but the story of the team seals the deal.
Coachability is a measurable signal in the pitch room.
In a 2018 paper in Entrepreneurship Theory and Practice, Michael Ciuchta and colleagues set out to test whether something investors had long described intuitively, that they back founders who are “coachable,” held up as a measurable signal in the actual pitch room. They built and psychometrically validated a 9-item coachability scale, defining coachability as the degree to which a founder seeks, considers, and integrates feedback to improve the venture’s performance.
The scale deliberately includes items capturing both the willingness to seek input and the willingness to push back on input that does not fit, because the construct is not a measure of agreeableness.
They then ran two experimental studies in which investors evaluated otherwise-matched pitches that differed only in the founder’s coachability signals. Across both studies, higher coachability significantly increased investors’ willingness to invest. The effect was strongest when the investor evaluating the pitch had personal coaching experience themselves, which the authors attribute to a social-exchange dynamic: experienced coaches read the coachability signal as a forward-looking indicator that their future post-investment input will land and create value rather than be wasted.²
The translation for a founder in a fundraising call is concrete. What investors actually weight is the visible cycle of taking the feedback seriously, weighing it, integrating what is useful, and substantively pushing back on what is not. Agreement in the moment carries far less weight, and sometimes signals the opposite. Sarah’s read of the same trait is identical. She invests in the founders who push back because as she mentions they are ultimately running the business and would know best.
How to Run a Round from Sufficiency
Four practices that build sufficiency first and let the mechanics follow.
Build the case for not raising before you build the deck.
Spend two hours, in writing, listing every reason your company could survive the next twelve months without this round. Revenue runway, cost cuts, an alternative bridge, a slower hire plan, a price test, a partner deal. Keep the list to yourself. It changes your nervous system whether the investor ever sees it. The founders who can articulate a credible “no raise” path negotiate from a different state than the founders who cannot. The deck is downstream of the list.
Make the first three lines of every outreach a clean test.
Sarah’s bad-pitch examples all violate the same rule. They fail the three-line test. The first three lines should pass a stranger’s read for what you do, why this specific fund fits, and what specific traction or signal makes you worth thirty minutes. If those three lines cannot stand alone, no deck attachment will save the message. The fund-fit belongs in the first three lines. The Calendly link belongs at the end.
Practice pushing back on real feedback before the call.
Before any investor call, write down two pieces of feedback you expect to get and your honest, non-defensive response to each. Write a real response that takes the feedback seriously and either integrates it or argues with it. Coachability research is clear: integrating without folding is the signal. Rehearsing helps you to be thoughtful in your response.
Decide your walk-away number before the first meeting.
Most founders enter rounds without a hard floor on terms. The result is incremental concession that compounds quietly over a six-week process. Decide your walk-away number before the first meeting: minimum check, maximum dilution, must-have terms, structure deal-breakers. Write it down where you can see it during calls. The walk-away number is what makes the option to walk real. The investor on the other side of the table can tell whether you have one.
The work of getting to the place where you can run any of these is the work I run inside the Founder Circle.
The Bigger Picture
Fundraising gets written about as a deck problem. The deck matters, but the work upstream of it carries more weight than most playbooks acknowledge: how you carry yourself in the call, the way you handle pushback, whether you actually need the round.
Sarah’s career is useful evidence for this because she sat on both sides of the math. She broke into venture with no formal role and one operating question: how can I provide value? She offered to talk, give feedback, help. She was startled at how many founders responded with “are you actually not going to charge me for this?” Her own read of why it worked: you have to be genuine, and people can tell when it’s not a salesy message. That same approach, scaled up, is what runs every successful fundraise on either side of the table.
“You may not be raising millions of dollars, but you can still build an amazing company.”
The founders who raise best built a company that did not need this round. They sat across from investors as evaluators rather than supplicants. The deck did the work the deck can do. The rest of the work was theirs: the call, the pushback, whether they actually needed the round. The mechanics flow from there.
You cannot fundraise from sufficiency if you have not built sufficiency. Build it first. The round follows from there.
Founder Circle
Build the round from sufficiency, not from need.
Most founders enter rounds from a position they did not choose. The Founder Circle is where you set that position before the process starts.
I work with a small group of founders who want three things:
Clarity on what your company actually needs from this round, separate from what the market is telling you to want.
A space to work through the hard decisions before they harden into rounds you regret.
A peer group that gets it, founders running real numbers on real options.
Our next circle meets soon.
P.S. What would your company actually do for the next twelve months if you didn’t raise? Write the list before you send the next outreach. I read every response.
If you want to go deeper to check out the references used in our research:
¹ Gompers, P. A., Gornall, W., Kaplan, S. N., & Strebulaev, I. A. (2020). How do venture capitalists make decisions? Journal of Financial Economics, 135(1), 169-190. https://doi.org/10.1016/j.jfineco.2019.06.011
² Ciuchta, M. P., Letwin, C., Stevenson, R., McMahon, S., & Huvaj, M. N. (2018). Betting on the coachable entrepreneur: Signaling and social exchange in entrepreneurial pitches. Entrepreneurship Theory and Practice, 42(6), 860-885. https://doi.org/10.1177/1042258717725520
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