Many technical founders feel deeply uncomfortable with fundraising because it feels so opaque and idiosyncratic. Not to mention the slight “ick” factor in pursuing “relationship building” and other fuzzy goals to improve your odds of getting funded.
I shared this discomfort for a long time because it felt like a shame that talented founders had to bow to this irrational logic to get capital for their ambitious startups.
Then I started having deep conversations with dozens of early stage investors. As I progressed, a pattern emerged from the fog. The best investors DID have logical reasons for many of these requirements. The only problem was that the “scorecard” they used was invisible to most founders. So founders had no way of knowing how they stacked up, or what to do to hit the thresholds investors were looking for.
When I dug into the transcripts, these investor actions boiled down to three audits.
The Trust Audit
There is one hard truth you MUST confront: Most investors are first looking for reasons to reject your deal far more than they will ever look to see what’s unique about you. They have more deals than they can ever effectively evaluate and must cull this volume by 70-90% so they can focus on deals that have a real shot at getting funded.
The single biggest factor driving their decision is the founder and team:
- Is this person a “known quantity?” Familiar, credible, trustworthy?
- Do they have domain experience or compelling reason to build this specific startup?
- Do they have the business experience and acumen to make the business end work?
- Do they have enough “magnetic force” to attract employees, investors, customers before they have a product?
Clearly investors can’t rely only on what you tell them to make these assessments. So they run a “trust audit” based on signals you’re sending without realizing it.
- What does your public profile say about you?
- Do you have a consistent, credible presence on this subject?
- Do they know trustworthy people who can vouch for you?
- Does a quick search bring up adverse data?
They’re also looking for a credible reason why you are building this startup, to understand if it’s based on deep domain experience or a compelling personal origin story. Startups built to chase a hot trend without these foundations usually get a hard pass from investors.
As one investor told me:
“The first thing I’m looking to see is who the person is. Usually LinkedIn. Do we have people in common? Any interview they’ve given, anything they’ve written—I want to get a sense of who the person is.”
Another VC told me it’s now routine for investors to run background checks on founders because “you never know what you come up with, and we can’t risk our money on things we could have learned.”
Before your carefully crafted pitch has been read, you’ve already been categorized as “insider” or “outsider.”
The Coachability Audit
Experienced investors know that once they fund you, they have to live with you for 5-7 years, which is longer than many marriages. When your startup hits rough weather, and it almost certainly will, they want to know they can work with you and that you’re open to advice and challenge.
The word “uncoachable” came up in multiple conversations, always with the same weight. Investors have only a few opportunities to test how you’ll behave under pressure. So they carefully observe your interactions during fundraising:
- How do you respond to challenges to your thinking?
- How receptive are you to new data and blind spots you hadn’t considered?
- How well do you balance conviction with openness when the situation warrants it?
Why do investors weigh this so heavily? They’re imagining the future: Can I picture sitting in a board meeting with this person when things are going badly? Will they listen? Or will they dig in until the company craters, and take my money with it?
The Buildability Audit
The riskiest assessment is the third: How hard will it be for this founder to build what they need to build?
This isn’t primarily about your current team. It’s about whether you understand the distance between where you are and where you need to be, and whether you can credibly close that gap.
One VC said:
“This team has certain strengths. They need to bring in a certain type of talent. How difficult is it to bring that capability if they don’t already have it?”
Investors run this calculation silently while you’re presenting:
- Do you even know what’s missing? Many first-time founders can’t articulate their gaps with precision.
- Is your plan to fill those gaps credible or magical—hope dressed up as strategy?
- Can you attract the talent you need from your current position?
- Does your traction prove you can execute, or just that you can build a cool product, but no more?
The Uncomfortable Truth, and a Strategic Response
These audits measure something deeper than credentials. They probe one underlying question: Does this founder have a credible grasp of reality?
- The Trust Audit asks: Are you actually embedded in this problem, or just claiming to be?
- The Coachability Audit tests: Can you update your beliefs when evidence contradicts you?
- The Buildability Audit checks: Do you understand your constraints accurately, or are you hoping things work out?
But one thing troubled me: the same filters that help investors find trustworthy founders can screen out exceptional ones.
I saw this bias in myself. Reviewing a healthcare startup, the moment I saw words like “care” and “nurture” in the pitch, my finance-trained brain coded it as small and unscalable. By slide three, I found enterprise-grade infrastructure and a team that checked every box. My unconscious filter nearly killed a fundable deal.
If “mutual connections” and “ecosystem embeddedness” are proxies for trust, what happens to the brilliant founder who didn’t go to the right school, doesn’t live in the right city, doesn’t have the right network? Does cracking this code just boil down to something banal like “build your personal brand”?
Digging deeper, I found that smart founders who beat these filters understood something crucial: each audit is measuring a deeper quality. Networks can vouch for your reliability and substance. Coachability tests whether you’ve genuinely wrestled with being wrong. Buildability tests whether people will bet on you before you have anything to offer.
You can build the substance these proxies are trying to detect, even if you don’t have the right “pedigree markers”.
Build Trust
Show your reliability through other means. Talk about customers who’ve paid you. Grants you’ve won competitively. Partners who’ve committed resources. Intentionally create the same information density that networks provide. A founder without connections but with three signed LOIs has something more powerful than a warm intro: proof that the market believes.
Prove Coachability
Stop practicing graceful responses to hard questions. Instead, seek out the smartest person who thinks your idea is flawed and genuinely try to understand their reasoning. Find the steel man argument against your startup. Then address it. If you can’t find it, you haven’t thought hard enough. If you’ve found it and it can’t address it credibly, ask yourself why.
Demonstrate Buildability
Recognize that every commitment you’ve secured with nothing to offer is already evidence. The customer who paid a deposit before you had a product. The advisor who committed hours before you had traction. The engineer who joined for equity when you couldn’t match their salary. All of these are clear proof of the very capability investors are trying to assess. Document them. They are your exact answer to the buildability question.
Especially if you’re a first time founder, this quote from an investor should give you hope: “Three-quarters of the ones we’re investing in are first-time CEOs”. If pedigree were determinative, that number would be inverted.
The founders who pass investors’ invisible audits are the ones who’ve stress-tested their assumptions so thoroughly that investor skepticism feels like familiar territory.
What’s the hardest truth about your startup you haven’t yet confronted?
