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Sourcery · 2 min · Dec 13, 2024

Guo uses investor updates to create fundraising competition

Her seed round began as a text-message ask to her LPs and quickly oversubscribed. For the Series A, an investor update prompted inbound offers and a term sheet within two days.

Lucy Guo

Lucy Guo is founder of Passes.

Founded Passes, a creator monetization platform, and co-founded Scale AI, the data-labeling company.

  • Molly O'Shea, Host · Founder, Sourcery

    Ex-Upfront Ventures investor; has interviewed Alex Karp and Palmer Luckey.

About this segment

Her seed round began as a text-message ask to her LPs and quickly oversubscribed. For the Series A, an investor update prompted inbound offers and a term sheet within two days.

From “How Lucy Guo Is Building A Creator Empire with Shaq, Kygo & Olivia Dunne | Passes”, Dec 13, 2024. Watch the full episode

“The key to like fundraising well is just causing FOMO.”
Lucy Guoat 30:09 · Sourcery30:09

Takeaways

  1. Her seed round started with a text message to LPs.
  2. A year-end update prompted investors to contact her.
  3. She says the key is creating FOMO among VCs.

In this episode

Full episode
  1. 6:09Daily posting helps creators build durable income2:48
  2. 11:51Passes uses fan spending data to shape new products3:18
  3. 18:01Passes grows creator relationships with break-even events3:52

  4. 28:52Guo uses investor updates to create fundraising competition2:01

  5. 9:31Creator commissions may shift to whoever brings the deal2:26Up next
  6. 21:51Passes removed Web3 features to protect creator acquisition2:06
  7. 25:59Passes sees local search as a route to psychic bookings3:08

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

  1. 29:00

    i love it i love it um so you have raised about 50 million dollars in two years that's a lot of money that's very fast and you're also growing really fast what is your fundraising strategy been like to date like how have you kept up with all this and been able to continue to raise in a very competitive market. Yeah. So I generally think that I like fundraising when I'm at the advantage. So getting preempted is my favorite way to fundraise. I would say the seed round wasn't really preempted. It was more so like I had an idea and I was running a venture fund. So I had to ask my LPs for permission to be able to do this. And then my LPs were just like, let us put in a check. And I had to do right by my LPs. So I obviously let them put in the checks first and also gave a little bit of equity to the fund and that ended up just oversubscribing very quickly

  2. 29:50

    like no name no deck it was a literally a text message fundraise which is pretty wild and then the series a was preempted the numbers were just absolutely phenomenal and i've like obviously you know in venture i saw how my other investments were growing and i knew that i had something very special on hand so i just sent out an investor update like end of year and every single one started contacting me you know i got a term sheet like within two days i think of that investor update, use that to cause FOMO and fundraise. The key to like fundraising well is just causing FOMO. We feel it. VCs definitely feel the FOMO. Yes. That's how the whole system works. What were the numbers? I don't think I can share any more, but they were very good, like in the multi-millions after our first 12 months. Phenomenal. Okay. Not bad. I can see that.

  3. 30:42

    As we look back on your career, you're very well accomplished. You were a Teal Fellow,