How to Raise Funds Successfullly 3 Tips from VC-Turned-Entrepreneur Lewis Gersh

Lewis shares lessons learned from his time on the other side of the table as a VC of Metamorphic Ventures.

Email overload is real. But while virtual mailboxes have become increasingly overcrowded, physical mail is almost an endangered species.

Less mail means that people have more mindshare available for any physical mail they do receive. For Lewis Gersh, this trend presented a major marketing opportunity, and he founded PebblePost to seize on it.

The company tracks customer activity online and then transforms it into a personalized piece of mail sent directly to the user’s home.

“Brands have told us we invented a new channel,” says Lewis, who previously founded a VC firm that funded companies specializing in data-driven marketing. “Much like there was search or social, there’s now programmatic direct mail.”

Over four years, Lewis has raised about $81 million to grow PebblePost. Based on our conversation, here are his top tips for successful fundraising.

Face your headwinds — head on

With decades of experience under his belt — as both an entrepreneur and investor — Lewis had a good foundation when he started fundraising for PebblePost.

But even with enviable relationships and connections, fundraising for PebblePost wasn’t as simple as snapping his fingers.

“Some people would just barf immediately,” Lewis says. “One of my buddies, who’s at a large venture fund and who shall remain nameless, said, ‘Great, just what the world needs: automated junk mail.’”

Other investors didn’t quite see it that way. Lewis helped them see the same potential he did for PebblePost.

To win over investors, Lewis recommends telling a story about your company that accounts for the inevitable headwinds. 

“There are things every entrepreneur will have if they’re honest with themselves in their venture — macroeconomic, geopolitical, incumbents in the space — risks going on at that point in time for that sector,” he says. Those are the headwinds.

When Lewis first started raising money for PebblePost, junk mail — and how much everyone hates it — was a hot topic thanks to Restoration Hardware, which had the enlightened idea of mailing 17-pound catalogs to customers’ homes. Plus, there were rumors that USPS was on the verge of going bankrupt.

Adding to the issues of the day, “nobody had ever raised early-stage venture for a direct mail venture,” Lewis notes. “So no successful exits.”

“I chose not to try and defend those issues,” he says of PebblePost’s headwinds. Instead, he focused on painting a picture of the opportunity and why it was worth the risks.

“Coming up with a very simple, catchy phrase was critical,” Lewis advises.

“I would go into my pitches saying, ‘I have a seven-syllable pitch for $1 billion opportunity,’” Lewis says. “Programmatic, direct mail.”

That initial soundbite, Lewis says, should be something that an investor can repeat and something that makes them think. Then, you move on to your 20-second elevator pitch.

In Lewis’ case, the pitch included four pithy points: “It’s the largest ad spend next to TV, the highest response rate of any media, has had no new product in 25 years, and is a fragmented ecosystem.”

”That was my exact talk track when I’d get them on the phone. Those four things are a dream of an area to disrupt for an average early-stage VC.”

Be creative and memorable, grasshopper

Drawing on his decade at Metamorphic Ventures, the seed-stage fund he founded, Lewis has strong feelings about pitch decks.

“Showing up in a room and having a pitch deck is probably mandatory,” Lewis says. “You should do it. But they should be about visuals to enhance the story — not scripts.”

After sitting through literally thousands of presentations full of dry statistics and graphs, Lewis says he remembered few pitches he saw as an investor.

“Five percent or less would show up and have amazing visuals — not charts and graphs,” Lewis says. “It really would resonate so much more. What’s the feeling, the emotion, the psychology?”

The pitch deck isn’t everything, though — you can (and should) find other ways to be memorable. For PebblePost, Lewis walked into meetings with investors, threw down a stack of postcards on the table, and announced that they were worth more than Google Adwords.

“It would grab their attention and create a fun intro,” Lewis says. “Like let’s go old school, let’s have a discussion. I’ll get you a deck because I know you need to send it to your partners, but it doesn’t have to command the meeting.”

In fact, Lewis recommends that a half-hour of your meeting should be spent on discussion. The pitch deck should only take about 20 minutes.

After a few pitches, Lewis says, you should know most of the questions you’ll be asked and incorporate those into your presentation to steer the direction of the conversation.

Follow-up and communicate FTW

After sitting in on so many pitch meetings, Lewis knows how to read his fellow VCs.

“The one way you know for sure when there’s a pass coming,” Lewis says. “If they say good luck at the end of the meeting, you’re dead meat. You want them saying, ‘This is amazing. How can we meet again?’”

But either way, Lewis says, it’s best to follow up and to do so quickly.

“You have a week to really make an impact before the next partner meeting,” Lewis says.

In an ideal world, entrepreneurs would have their pick of investors. But it doesn’t usually work out that way.

“People say, choose your investors carefully,” Lewis says. “You’re building a relationship. It’s a marriage, blah, blah, blah. … The truth is most entrepreneurs don’t get to pick their investor “dream team.” They have to go with whoever is willing to lead.”

Even if you don’t get your preferred investor, Lewis advises building up and protecting the relationship. The best way to do that? Communication.

“Investors love good news and they can handle bad news,” Lewis says. “They will not tolerate surprises. Give them advance notice on everything. Good, bad, indifferent.”

Early on, you want to do a monthly investor update and you can communicate with less frequency as you get bigger. Visibility and transparency are essential for building relationships with investors, Lewis says.

“Getting the communication right is critical.”

Nathan Beckord is the CEO of Foundersuite.com, a software platform that has helped entrepreneurs raise over $1.2 billion in seed and venture capital since 2016. This article is based on an episode of Foundersuite’s How I Raised It podcast, a behind-the-scenes look at how startup founders have raised capital.