How Threads Raised A $10M+ Series A Led By Sequoia Capital

Four fundraising tips from Rousseau Kazi of Threads.com

Rousseau Kazi started his career strong when he landed his first job at Facebook in 2011. But even then, he knew he’d eventually be his own boss. “I knew early on that I was going to leave [Facebook] and do my own thing,” says Rousseau. “It was something that I've always dreamed of.”A few years ago, he did just that when he hatched the idea for , a platform designed to make work more inclusive without compromising efficiency. “We realized that as teams grow, their ability to keep everyone on the same page quickly starts to deteriorate,” he says. “[Discussions] often ended up getting lost in the ether.” Modeled after online platforms that host forums and other large scale conversations, Rousseau designed Threads specifically to expedite worker onboarding, streamline conversations, and benefit marginalized employees who are at higher risk of being left out of the conversation. After building the company for nearly two years, Rousseau raised about $11.4 million over two rounds of funding — including a — with the help of prominent female investors like Eventbrite CEO Julia Hartz, GV’s , and Mariam Naficy, CEO of Minted. Based on our , here are this first-time founder’s key takeaways for raising capital.

The future of funding is diverse

Rousseau says that, at its core, Threads’ mission is to “make work more inclusive” by leveling the playing field within the workplace. “We realized that was going to be really hard to do if we didn't have the right representation and advisors helping us grow properly,” says Rousseau. That’s why he prioritizes working with investors from diverse backgrounds and perspectives, like women, black, and Latinx executives who can strengthen the company by casting a light on its blind spots. “The future of work isn't only distributed, but it's also diverse,” he says. “If you're not having these different perspectives help guide you, that's going to be someone else's competitive advantage.” In fact, Rousseau paused his Series A (with the blessing of his lead investor) to add investors from underrepresented backgrounds. Similarly, Rousseau has also intentionally sought out leaders he admires, including executives and founders with a history of scaling large organizations and building great work cultures. Yes, you need investors for their capital. But, Rousseau says, it goes beyond that. “You're finding people to give you advice, you're finding mentorship, you're finding people to help you avoid landmines and capitalize on the opportunities that you don't see.”

No ask, no get (aka how to grow your network)

Rousseau knows that seeking investors can seem daunting at times, especially if you don’t have many in your inner circle. To counter that problem, he suggests making a list of people who you look up to and asking them to make introductions to begin expanding your network. Rousseau used this approach with people whose careers he’d tracked closely.  He’d approach them with a request like this: “Hey, I'm trying to add more perspectives in my cap table. I'd love to bring people who are typically underrepresented in tech to engage with me here because this is a blind spot.”For Threads’ Series A, the well respected VC firm led the round. The company got lucky here — Rousseau already had a close relationship with Sequoia partner, . The two previously worked together at Facebook. When asked to invest in the early stages of Threads, Rousseau says that Mike got the mission and jumped at the opportunity to help the company along its journey.“The number one thing I was optimizing for was trust with Mike,” says Rousseau. “I know his strengths, I know his weaknesses. He knows mine.”Rousseau believes it’s important to look for those “subjective” qualities in an investor; “We’re not only building a product; we're building a company,” he says. “So it was important that I found someone that I knew was aligned with me, who cared about diversity and inclusion, and who recognized my strengths, but also would push me on my weaknesses.”

It is all about timing

Rousseau says most VCs he talked to wanted to understand why a company matters now. It’s essential to have a compelling answer to the “why now?” question.

“Understand the problem, have the right narrative and have the right understanding of why this problem is big,” advises Rousseau. “This is why [the company] exists. Here are the historical trends that led us here.”Taking the time to identify your mission, scope the competitive landscape, and find the right words to articulate your vision can go a long way. He stresses, too, the importance of “bringing your own background experience into it.”So don’t underestimate the value of introspection and taking the time to reflect on your answers to hard questions. “And make sure you're really buttoned up about it,” he adds.

Believe your own hype (and hire really well)

Rousseau says that his best advice to new founders is this: “Do whatever you can to increase your confidence by order of magnitude.”He adds, “As long as you keep believing, the chance the company's going to succeed will go up quite a bit.” He recommends testing your product under the “harshest constraints” to determine if there’s really something there. In Threads’ case, they postponed a site redesign to make it “beautiful and polished” until they started seeing people outside their network “live on the product and love the product.” His other core piece of advice is to prioritize recruiting top talent, even if it means spending 200 hours finding and recruiting a single employee who’ll make all the difference. “I don't think people truly see what the ROI of being a great recruiter brings you,” he says.And at the end of the day, recruiting top talent will even come in handy when differentiating yourself from other companies to investors. “I think that the signaling of being able to recruit a strong team is really powerful, especially if you're trying to fundraise.”

Nathan Beckord is the CEO of which makes software for raising capital. Foundersuite has helped entrepreneurs raise over $1 billion in seed and venture capital since 2016. This article is based on an , a behind-the-scenes look at how startup founders raise money.