Behind the Grind: Jason Yeh

Hey, Justin here, and welcome to Just Go Grind, a newsletter sharing the lessons, tactics, and stories of world-class founders! Premium subscribers get full access to this newsletter, exclusive events, event discounts, and more.

I’m headed to Las Vegas soon for my dad’s memorial.

It’s certainly not been the start to the year that I would’ve wanted, but having the support of family and friends and, candidly, the business I’m building here at Just Go Grind, have made it manageable.

As any founder can relate to, there are a myriad of challenges, personal and professional, along the way of building a successful business. No matter what, the world doesn’t stop, so we must push on.

That said, there are some things in the works at Just Go Grind that I’m excited to share with you.

• I’m partnering with Tribe as a sponsor of this newsletter and the podcast. I’ll share more on that soon, but I think they’re a great fit for what we’re building here.

• In March, I’m hosting a poker game in Santa Monica for founders, operators, and investors. Spots will be limited and I’ll send out invites soon as well as share it in this newsletter so you have the first shot at attending.

• Yesterday I interviewed Everett Cook, Founder & CEO of Rho, for the Just Go Grind podcast. I’ll be re-launching the show in March and have big plans for making it a must-listen for founders, operators, and investors.

Today, we’ve got a Q&A for you with Jason Yeh, Founder of Adamant and host of the Funded podcast.

Jason is a former investor at Greycroft and now spends his time helping founders figure out if they’re ready to fundraise — and what to do if they're not.

I met Jason at a dinner for Headline scouts in LA and by that time had already seen his content online for months.

He consistently produces some of the best content I’ve seen on fundraising and he was gracious enough to share his secrets with us.

The Q&A with Jason below was lightly edited for brevity.

Let’s dive in.

• This tweet got me thinking about SEO again, something I’ve neglected for far too long.

• I finally listened to the Graham Duncan episode of Invest Like the Best - it was great, highly suggest.

• One of the earliest, and largest, AI newsletters just got acquired. What do you think the sale price was? I’m very curious, if anyone has any insights, let me know.

• Here are some of the best out of print books.

• I keep reviewing this tweet about not boring marketing and you should too.

• Shoutout to my friend Hannah at Talk Shop who is crushing it in the PR world (And who one day I want to hire 🤫).

• Tyler Tringas from Calm Fund is getting back into building and open to partnerships. Great opportunity (I already DMed him)

• My friend Meena asked me for a book recommendation on growth mindset for the book club she’s in and if you’re interested in the same topic, here’s the two I suggested: Relentless and Winning. Both by Tim Grover, the legendary trainer who worked with Michael Jordan and Kobe Bryant (Among others).

How can founders assess the best time to raise, considering market conditions and their own traction

I think there are a number of different vectors to consider. The first one has a lot to do with how much time a founder has. When people ask me when they should raise or the strategy to raise with less than six months of runway, my personal comment is, well, you should do whatever it takes to actually increase your runway to six months before you even start thinking about timing the rest of your fundraise or strategy around fundraisers.

Generate more money. Get more revenue. Raise a small amount of money from people close to you. Reduce costs by negotiating contracts or cutting headcount. Do all these things to extend your runway to at least six months before you even start thinking about properly timing your raise. So runway, super important.

Second is, people often have a misconception about the way their narrative or their opportunity evolves from month to month. I think founders believe that because their revenue or usage is growing 10 percent month over month, then their overall story and opportunity to raise increases by 10 percent month to month.

It's actually not how it works, especially at the earliest stages. There isn't a direct line of quality of narrative with your numbers going up incrementally. So one of the things you should actually consider is, there are a lot of things that you can point to that might actually change your narrative, and if that's the case then timing your raise alongside your runway and when that narrative change hits, is smart.

Now, if you don't feel like your narrative is going to change substantially before you get to a place where your runway dips below six months, then my advice would be to always have a little bit more runway than you need to go raise capital instead, because your narrative isn't going to change, you just start prepping to raise sooner.

And then when you think about market conditions, I often think that founders overly weigh impact of market conditions on when they should raise. I think the other elements for your company impact it more. One of the most common ones to consider is the seasonality of when venture capitalists are in market.

So, summer vacation or holidays being times when VCs stereotypically are not around and looking at deals. Well, people try to avoid those like the plague. On the margins, I think it's important to look at the market, but it should only be maybe a tertiary thing in terms of when you decide to go out.

What are the elements of a compelling narrative that resonate most with investors?

I think there are a couple of things to consider when it comes to thinking about the components of a narrative that you need to insert in order to influence an investor.

The first thing is taking a couple steps back, and trying to deeply understand what the investor that you're targeting needs to hear. Because a venture capital investor is going to be different than, say, an angel investor. It's very important that you don't use a one-size-fits-all approach to telling a story if your investors are not the same as the person that who's advising you is thinking about.

And then the second point that I want to make sure founders take into account is how important it is to attach some sort of emotional connection to the narrative that you are crafting. If you can start getting someone to connect and get excited about the protagonist in your story, get upset at the villain or the enemy that you're fighting with your business, then you have created an ally. You've created someone who is dreaming alongside of you when it comes to telling the story and the opportunity to invest in your company.

So, a lot of different ways to do this that you can look up, different narrative frameworks, but the high level thing that I love pushing people around is, can you get someone to like care a little bit more about what you're talking about? And this can be done in a variety of different ways, it doesn't always have to be a tearjerker.

So if I were to talk about my own company, I'll often describe the situation where, as a venture capital investor, and as an advisor of startups for the last 15 years I've seen a bunch of different profiles of founders. I've seen great founders who also have great fundraising skills. I’ve seen a second category, which are honestly bad founders who also really know how to fundraise. And then there's this third category of amazing founders, founders that have great unique insights, real skills, and are working on real problems, but don't know the first thing about fundraising.

The really frustrating thing, the thing that really kills me, is that ones and twos get funded, but that third category, which I believe house a lot of world changing ideas, which are birthing solutions to real world problems, those people are not getting funded. So everything I do is really geared towards making sure that third category of founder gets funded, and that these new businesses and new technologies get created.

In that kind of storytelling, I am creating a protagonist. I am aligning you with thinking about this third category of great founder that doesn't know the first thing about fundraising. I'm making you annoyed at this category of founder that shouldn’t get funded but is getting funded over this great people. And it makes you fill in the gaps around why you want this business to succeed and push everything forward to dream alongside of me. So that's an idea of how creating emotional connection can be impactful when crafting your story.

What’s the best way for a founder to stand out in an investor’s crowded inbox?

I love telling the story of my own experience working for a very well known investor, I won't name any names, but this investor was known for having challenges with their email and as I had the opportunity to work for them, my goal was to fix this. I said, I'm going to use technology, processes, psychology, a lot of different things and we're going to tackle this problem, we're going to solve the problem.

Little did I know. Naive 30-year-old Jason had no idea that this investor got between 500 and 1,000 emails per day. And so when any investor is receiving between 500 and 1,000 emails per day, they might have been an exception on the high end.

But even average investors are getting hundreds and hundreds of emails a day. So if people are getting that sort of volume of emails, they are doing everything they can to process it as fast as possible, meaning emails are often deleted and archived before they even get opened. There's usually a gatekeeper that helps them filter even more.

And so, the biggest thing that I can say for anyone that is trying to stand out in someone's crowded inbox is to do as much work as possible to get a warm introduction. A light connection to someone who might be able to usher in your email to an investor is lightyears better than trying to stand out as a cold email in a sea of emails that just keep refreshing day after day, that's nearly impossible for them to get out of.

So, make sure that you really focus on what it takes to build connections that can help you get introductions to investors. That effort will be far more impactful than maybe crafting the right subject that somehow has a one in a thousand chance of penetrating a busy investor's inbox.

How can founders balance storytelling with metrics and data in their pitch?

My belief is that metrics and data are a part of storytelling, so it's less of a question about balancing and more a question of adding all worthwhile pieces of a story. 

Essentially, if there are metrics or data that are key to the exciting story that you're trying to tell, then they should all be included. 

You shouldn't include metrics or data just for the sake of including metrics and data. If they are a non-factor in your story, then don't include them. If they represent something negative in your company, don't include them. What we're trying to do is tell the most compelling story that fits your vision.

What are the toughest questions founders can expect during a pitch, and how should they prepare to answer?

I want to answer this question by first addressing something else first. The best thing a founder can do when prepping to talk to investors is…

The rest of this piece is for premium subscribers, including Jason’s answers to these questions:

• How should founders determine the ideal amount to raise?

• How should founders respond to “no” repeatedly while keeping morale high during a long fundraising process?

• How can founders negotiate better terms, even if they feel they lack leverage?

• How can founders create urgency with investors to move the process along without coming across as pushy?

• What should founders expect as far as fundraising timelines?

• How has the current fundraising environment changed, and what do founders need to do differently in today’s market?

• What are the keys to a standout pitch deck?

• What are the pros and cons of exploring non-traditional fundraising options, like revenue-based financing or crowdfunding, alongside venture capital?

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