Originally published on 03/11/2025
Dear reader,
As predicted in my last RO letter, The Realistic Optimist’s seed round closed in October, clocking in at a little over €100K. I can’t assure you how many times RO letter predictions will materialize, so please savor this one.
This post-raise, freezing, Parisian Monday morning lends itself to reflections. Here are five of them. Hoping other young founders find them useful.
1 - Before incorporating the company, get solid verbal agreement for the first ~€20K.
Incorporating a company costs money. If it’s your first time, some costs will come unexpected. Having around €20K of commitments ready to wire the moment your company bank account opens gives you peace of mind, as you’re not dipping into personal savings for company administrative expenses.
My former boss, Paul Vidal, played the role of that first €10K ticket. That allowed me to get initial expenses out of the way and serenely launch the round. It also gives you, as a founder, a confidence boost. No one had ever wired me €10K before. Receiving that first check early shows this fundraising round is real, tangible. Game on.
Paul if you’re reading this, I’m eternally grateful.
2 - Constrain the round, time-wise
This is basic advice, but even truer when raising from angels. They’re investing their personal money. Life gets in the way, priorities change. If they said yes, get them to sign the contracts and wire the money quickly. Doing so creates momentum that can convert other angels that are on the fence. You don’t want to spend too much time fundraising. You have a company to build after all.
Constrain the raise, the pitches, the intros in a few weeks, and tell angels that you’re closing the round in X weeks maximum. This is a fictional deadline, but you need it to keep things moving.
I closed the RO round two months later than I planned to. I didn’t constrain enough. I continued to work on operational RO stuff during the fundraise. My recommendation, for very early-stage founders, is to dedicate 8 weeks, quasi-fully. Your company doesn’t have employees, nor millions of customers eagerly waiting for you. It can wait. Just get the round over with.
3 - Identify insurmountable objections
I pitched everyone in my WhatApp + LinkedIn contacts I vaguely thought could be an angel, without much filtering. This yielded an important lesson.
As you receive objections to your pitch, you’ll understand there are some that are simply insurmountable. If a potential angel objects with one of them, move on. Convincing them is too steep a hill and isn’t worth your time.
In the RO’s case, one of those objections was “but people don’t read anymore”.
First, that’s not true.
Second, this means that particular person doesn’t read much or has arrogantly deemed “people” (a precise, evocative, granular term) as semi-illiterate.
There’s no way that person will invest in a company selling written articles.
Once you’ve identified your company’s insurmountable objections, move on as soon as you hear them.
4 - Don’t fiddle with terms
This is something I did a good job on. Angel investors are investing with their personal money. They have different motives for investing and varying investment acumen.
Some are investing in the founder more than the company, and will sign a contract while barely skimming the terms. Others will ask for sophisticated contractual personalization for tiny investments.
This is solved by a simple trick: same terms, for everyone, no negotiation. You’re not brokering a byzantine OpenAI-Nvidia chips deal. You’re raising €100K for a company with laughable revenue. Relax.
I benchmarked what were vanilla, appropriate terms for a startup raising money at my stage and stuck to them. They were never really a subject of contention. Every angel signed the exact same contract.
5 - Know why you’re raising
I’m a disciple of French founder Guillaume Moubeche, who extolls the virtues of bootstrapping and warns against the dangers of raising money.
The RO is very much sticking to the operational commandments of bootstrapping: no wasteful spending, an all consuming focus on sales and cash-flow, and rational, measured company building.
So why did I decide to raise?
A couple of reasons:
I didn’t have a co-founder and didn’t have a stash of personal savings to see me through the initial, unprofitable stages of the RO.
I’d managed to sell group RO subscriptions to VCs on three different continents. I got an inbound request from an Ivy League university asking for RO access for students.
I wrote the RO from my bedroom, with no prior network and living on unemployment checks + the cash transfer my grandma sent me for my 25th birthday.
I’d clearly proven something, commercially-speaking. The fact that a Pakistani VC would buy an RO subscription to read our coverage of the LATAM/Africa startup scene while I sat in Paris was telling of the gap the RO filled.
How many more subscriptions could we sell if the RO had local correspondents writing even better articles?
I thus had two options.
Option 1 was to continue bootstrapping, living on service/consulting revenue while I scaled paid subscriptions in the time I had left.
Option 2 was raising a small amount of money, granting me 18 months of full-throttle on scaling RO paid subscriptions without wasting time on services/consulting.
I chose Option 2. My entourage has been on the receiving end of (too) many monologues debating whether I should raise or not. The fact I intensely pondered this decision then makes me comfortable with it now.
What’s next?
The RO has two goals:
Write very good articles.
Sell lots of subscriptions.
Any initiative should serve one of those two goals. If it doesn’t, it shall be dismissed.
RO correspondents: the cornerstone
The RO is recruiting regional correspondents, the cornerstone of our growth plan.
We’ve got our first one, with Aakash as RO’s (excellent) Asia correspondent.
RO correspondents do four things:
Write very good articles about their region.
Organize/attend local startup/VC events.
Sell subscriptions to prospects in their region.
Assist RO HQ (me) on various ad-hoc initiatives.
This is a remunerated, part-time, freelance position (to start). We are looking for RO correspondents for LATAM, MENA, Europe, and Africa.
LinkedIn DM or email me ([email protected]) if this sounds exciting!
Bonus
A couple of weeks ago, I received a cold email from James Mahon, who I’d spoken to once a few months prior.
Attached in his email was a Google Doc entitled “RO proposal”. The content of that proposal floored me. An excerpt:
“Ultimately the objective remains the same: build RO to be an enduring media entity covering the global startup scene. Paid newsletters is a contrarian take in the AI zeitgeist. Books are too. Contrarian takes are what build enduring entities.
Subscriptions are the life blood of RO. One-off media that deviates from the model is a bet, a speculative investment, to ultimately drive the core subscription business. It’s also a chance to deepen the pursuit of RO’s vision.”
James was pitching the idea of an RO publishing house. An idea which I love and which is the RO’s phase two, after scaling paid subscriptions. The fact that James succinctly conveyed the RO’s value prop without barely ever speaking to me baffled me.
I asked James what he wanted. He said he wanted to write long-form, investigative RO articles. So that’s what he’s doing.
James is now working on the RO’s first, long-form, investigative article, exploring the links between Japanese VCs and the African startup ecosystem. Stay tuned.
Conclusion
Operationally, a few cool things happened this month.
Allen Taylor, the managing partner at Endeavor Catalyst, bought himself an RO paid subscription. For the uninitiated, here’s Allen’s resumé:
“As the Managing Partner of Endeavor Catalyst, Allen leads Endeavor’s innovative co-investment fund that has been recognized as one of the most active global venture investors in markets like Latin America and the Middle East.
Since launching in 2012, Endeavor Catalyst has raised over $500M+ across four funds and made 360+ investments in 35+ different countries, including more than 60 companies now valued at $1B+”.
Someone like Allen purchasing an RO subscription intensely validates the quality and exclusivity of what we publish.
We also sold our first subscription to a VC based in Azerbaijan. This highlights the RO’s geography-agnostic potential, enlarging our TAM.
The RO clearly has extremely high-quality readers from around the globe. These readers buy €250/year subscriptions to read us. We’ve got to scale sales volume but our fundamentals are solid. Our articles are excellent, unique, and exclusive.
You can buy a subscription on our website, if you wish. We’d love to welcome you.
See you next month,
Tim