Lessons from my journey raising a $20M SAFE.
In tech, we often celebrate fundraising announcements as major milestones. But this perspective can distract from what truly matters: building valuable products that people want to pay for.
When I raised $20 million on an uncapped SAFE with a 15% discount for Chaos Labs, it wasn't through following conventional fundraising wisdom. Instead, it came from focusing first on creating a sustainable business, reaching $2 million in revenue completely bootstrapped, and approaching investors with genuine skepticism about whether external capital was necessary.
Looking back on this journey, here are five insights that might be valuable for founders navigating their own fundraising process:
1. Prioritize building a business, not raising capital
The strongest fundraising position comes from not needing to raise at all. Before approaching VCs, I had built Chaos Labs to $2 million in revenue as a solo founder. This wasn't a strategic decision for fundraising leverage—I simply believed that if people weren't willing to pay for what I was building, additional capital wouldn't solve the fundamental problem.
When VCs asked about my plans, I was straightforward: "We're at $2M revenue now. I couldn't go faster even with $100M in the bank. Let's talk in a year." Paradoxically, this honest assessment created more interest, not less.
2. Fundraising is often binary: zero interest or oversubscribed
In my experience, fundraising tends to be binary: you either struggle to generate meaningful interest or become significantly oversubscribed. The key inflection point is securing your first reputable lead investor.
What happens after you get your first lead:
- The same pitch that received lukewarm responses suddenly generates competitive term sheets
- VCs who were hesitant before now want to participate at any valuation
- The timeline accelerates dramatically, often catching founders unprepared
- Terms can improve substantially as competition increases
- Your leverage in negotiations shifts almost overnight
This dramatic change isn't because your business fundamentally transformed—it's because many VCs use social proof as a critical part of their decision-making process.
3. Value domain expertise on both sides of the table
The most productive investor relationships form when there's authentic domain knowledge on both sides. When evaluating potential partners, I looked for investors who genuinely understood DeFi and onchain risk management and could contribute meaningful insights.
Likewise, the strongest VCs appreciate founders who have deep expertise in their domains. In our case, having built security and financial infrastructure solutions gave us credibility that was difficult to fake. This shared understanding creates a foundation for productive partnerships beyond just capital.
4. Set realistic expectations about investor contributions
There's often a gap between what corporate VCs promise during fundraising and what materializes afterward. While strategic investors can add value beyond capital, it's important to maintain realistic expectations about partnerships, introductions, and customer opportunities.
For Chaos Labs, where our typical contract size is substantial, we found that no founder would make a significant purchasing decision solely based on an investor's recommendation. The value-add from investors came more through strategic guidance and network access than direct business development.
5. View fundraising as a responsibility, not an achievement
When we closed our round, my primary concern wasn't celebrating—it was the weight of responsibility that came with it. I worried about becoming "the once-hot startup that burned $20 million into the ground."
Each dollar raised represents trust from those who believe in your vision. This perspective transforms fundraising from an endpoint into the beginning of a commitment to build something valuable enough to generate strong returns for everyone involved.
A word of caution: While bootstrapping to significant revenue worked for Chaos Labs, this approach isn't universally applicable. Many businesses require capital to reach initial traction, especially those with high R&D costs, hardware components, or regulatory hurdles. Some industries also benefit from aggressive early scaling that bootstrapping simply can't support.
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The right fundraising strategy depends entirely on your specific business model, industry dynamics, and growth trajectory. The key is being intentional about why and when you raise capital, rather than simply following conventional startup wisdom.
I’m proud to say that Chaos Labs continues to be profitable at scale today! If you have questions about the fundraising journey or are interested in working with us at Chaos Labs, my DMs are always open.