Black YC alum explains how he raised $107M – TechCrunch
Black YC alum explains how he raised $107M – TechCrunch
Captain’s Founder, Demetrius Gray, has raked in an impressive $107.3 million so far, but he’s no rookie. Although his first startup, WeatherCheck, didn’t turn out the way he imagined, it paved the way for his current success.
“The incentives weren’t aligned,” says Gray.
His current startup, Captain, advances money to contractors for home repairs following natural disasters and then gets reimbursed by insurance companies or the government.
The idea resonated with investors: Using the methods described below, Gray was able to raise $100 million in venture capital debt and $7.3 million in private equity.
I’ve compiled valuable nuggets of knowledge that he shared with me about his experience raising capital, honing arguments, and networking, as well as the strategies he’s found most helpful as a that black founder.
Fundraising as a Black Founder
Gray has developed many mentorship relationships, particularly in the black entrepreneur community. He says he often sees black founders stop trying to fundraise too quickly.
He says everyone hears ‘no’, but it’s important to keep pushing. Eventually, you’ll find an investor or fund that likes what you do.
His second piece of advice is to put on a show: being unforgettable is the difference between being forgotten and funding your startup.
“It’s a performance,” he says. “The black community [is] a community of many artists and athletes. Take inspiration from Serena Williams, Mike Tyson, Floyd Mayweather, LeBron James – the greats – and treat it like it’s a performance.
Three Ways to Raise
Gray breaks down the methods he used to raise funds into three steps:
“People see the headline, ‘$107 million raised.’ What they don’t really understand is that it was a gradual process of building relationships over time that made this possible. Demetrius Gray, Founder, Captain
Use Tier 3 investors to get a perfect pitch
It’s standard to aim to get top investors on your cap table, but Gray says you shouldn’t discount smaller VCs. He used several Level 3 VCs as a sounding board for pitch feedback.
“Most VCs would be a little shocked to know they’re being used this way, but it happens a lot. We’ve perfected the pitch [with] smaller funds and lesser-known VCs,” he says.
As long as you don’t completely bark at the wrong tree, this tactic probably won’t waste the VC’s time either. Smaller checks could still come from lower level VCs.
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