How I Raised a $3.5M Seed Round Led by Steve Jurvetson in 30 Days

There is much more to effective networking than swapping business cards at cocktail parties and conferences. Particularly when it comes to fundraising, successful networking requires a methodical, even scientific approach. Just ask Jags Kandasamy, co-founder and CEO of LatentAI, which raised a $3.5 million seed round from some of Silicon Valley’s leading investors. 

“The idea is to network with investors well ahead of your actual raise,” says Kandasamy. Prior to co-founding LatentAI, Jags Kandasamy founded several other technology startups and was an Entrepreneur-in-Residence at SRI International, among other work. 

Savvy startup founders can tap into the “pay it forward” culture of Silicon Valley, he says, drumming up interest in their startup idea before they’ve even built a product. Register at Founders Network for Jags Kandasamy’s session, and check if you qualify for full Founders Network membership. 

• Building Bridges before You Need Them
• Fundraising Process that led to Tier 1 VC Investment
• Scientific Approach to CEO Time Management
• Efficient Networking in a Pandemic 
• 5 Elements of Startup Leadership

“Back in November of 2018, we were brewing on the idea and so I started hitting up the customers in my network, and my network of networks,” he recalls. “Basically I started telling people: Hey, this is what I’m thinking of doing. Do you have any expertise in the area, what is your opinion, or do you know somebody in this space who would be a good sounding board?”

Kandasamy found that many people were happy to make introductions or carve out a bit of time to discuss the idea. In the process, he was up front with those folks that he wasn’t raising money at the moment, but would be looking to raise some amount at a later time, and kept a spreadsheet of those who expressed interest in investing or wanted to help. 

All of that work and organization paid off for LatentAI. Kandasamy was eventually connected with Steve Jurvetson, a well-known investor who founded Future Ventures and sits on the board of Tesla and SpaceX. When the time came to raise a seed round, the advance conversations Kandasamy had ensured that the round came together very quickly. 

Jurvetson offered to lead the round, with funding spots allocated between Jurvetson’s Future Ventures and other investors including Gravity Ranch and SRI Ventures. In total, LatentAI closed the round in about 30 days. 

“Especially if your startup is very technical, part of the trick is to make the idea understandable and relatable to the person you’re talking to,” Kandasamy says. 

“Try to concisely tell the story, because you can easily get lost in the weeds,” he says. “Being an engineer, you can get really nerdy and lose people immediately. As my mentor always says, what is that one thing about your startup that someone could talk about at a cocktail party? ‘I met this cool company that does this’ — trying to convey that is the first thing.”  

Secondly, it helps to “localize” your idea within the expertise of the person you’re speaking with. That means tying it in to a problem they might need to solve or a development opportunity in their own industry. 

“People want to participate,” Kandasamy adds. “They have their opinions, but if you try to somehow tie this deep technology into their life, either personally or within a portfolio company, that helps to put it into perspective.”

He cites the example of an advisor who was a former CTO at Procter & Gamble, and who was responsible for some aspects of manufacturing as well as introducing new products. Someone like that might be interested in using AI technology to introduce a smart toothbrush.

“That way, people get engaged and involved, and start to share more insights from their perspective. You have to be willing to put yourself in their shoes,” says Kandasamy. 

Although the pandemic has temporarily shut off most in-person networking events, there are silver linings to networking from home as well. One obvious one is that you don’t have to fly to all-virtual events, and can attend multiple events in a day if you choose. That helps startup founders stay educated and to ensure their name is out there, even in a time when few people are meeting in person. 

“Without networking, you’re an island. With the pandemic and working from home, you can participate in a conference in DC in the morning, and then switch to a San Francisco based event in the afternoon without missing a beat,” he adds. 

Kandasamy’s methodical, organized approach to networking can be applied to other areas of startup life, like time management. 

As CEO of LatentAI, he closely tracks tasks on his calendar and charts out the time he spends on critical leadership functions, such as nurturing the startup team, product development, customer meetings and fundraising. His scientific approach to CEO time management — and being able to visualize spikes in time spent on one thing or another — saves valuable time and energy, and makes business planning easier.

He likens it to the five elements of nature referenced in yoga philosophy: Earth, water, fire, air, and space. Startup founders should similarly seek balance in the elements that go in building a successful company. 

“From a startup perspective, the first element is team, second is product, third is customers, fourth is finance and fifth is your competitor,” Jags concludes.