A Deep Tech Founder's Guide to Venture Capital
Preparation, Picking Investors, and the Psychology of the Long Haul
In this edition of Meet The Experts, we sit down with Michael Wehrheim, a finance veteran who has seen the fundraising process from every possible angle. Michael started his career in banking, earned a PhD in finance, and then spent years inside a venture capital firm during the dot-com era. He went on to join a Berlin-based deep tech startup as CFO, raising nearly €20 million across three financing rounds, and has spent the last decade as an independent consultant helping startups with financial planning, investor readiness, and exits. In other words: he knows what it's like on both sides of the table.
We talked about
what founders need to get right before they pitch,
how to actually pick the right investor, and
why fundraising is a numbers game.
Before You Pitch: Do the Homework First
A lot of deep tech founders think the hard part is the technology. It isn't. The hard part, according to Michael, is everything that has to be clear before you send your first email.
"You need a good investor pitch deck, maximum 15 pages, and every single slide has to hold up," he says. Problem, solution, technology, market, competition, USP, go-to-market, team, financials, ask. That's the standard structure, and each point sounds simple until you actually try to fill it in.
Take the go-to-market slide. To do it properly, you need to have talked to customers. You need to know what problem you're solving, how much it's worth to them, what you can charge, and which segment to go after first. "Before being ready to talk to investors, you need to have that information," Michael stresses. "You need to know who your customers are and what their problem is to define your product."
For deep tech specifically, VCs don't always expect revenue, but they do expect proof that real customers care. Letters of intent, pilot agreements, or at minimum documented customer feedback. If a VC gets interested, they will talk to your customers directly, so the signals need to be real.
What about uncertainty? Deep tech founders often don't know what the final product will look like because the technology is still evolving. Michael's advice is to be specific about where you are and where you're going: name your current TRL (technology readiness level), describe your prototype, state what you need to reach an MVP (minimal viable product), how long it will take, and how much it will cost. Honest specificity beats polished vagueness.
The Team Question
One of the fastest ways to get filtered out is a solo founder pitch. "If a VC finds just one point in your slide deck that doesn't fit, they will say bye-bye," Michael says. "And this is, for example, the case if your team consists only of one person."
The ideal founding team is two or three people covering complementary competencies: technology, sales, business. Eight co-founders is too many. Why? Two reasons: first, decision-making gets messy, and second, and more importantly, equity gets diluted to the point where no founder has enough skin in the game. VCs want to see a core leadership team that each holds 20% or more at the point of investment, because that's what keeps people fighting when things get hard.
Getting In: Warm Intros Beat Cold Emails, Every Time
Spamming 200 VCs with the same email is not a strategy, it's noise. "Warm introductions are very valuable," Michael says. Go to events where investors show up. Join accelerators and pitch at demo days and events. Ask founders who have already raised to introduce you to their investors. If you're cold-reaching a VC, at least do your homework first: look at their portfolio, find a company similar to yours, and reference it in your outreach.
Choosing the Right VC: Money Is the Beginning, Not the End
Most founders treat VC selection as a one-way street: the VC decides whether to fund you. Michael flips this. You should be evaluating them just as carefully, because taking VC money is a long-term commitment that fundamentally changes how your company runs.
Here are the three questions he recommends asking every investor:
How big is the fund and how much is left in it? This matters because of follow-on funding. If you raise a seed round now and plan to raise a larger round in 18 months, you need your current VC to have enough "firepower" to participate. Having your existing investor sit out the next round sends a terrible signal to the market.
Beyond money, what do you actually deliver? How often will we meet? Who are your industry contacts? Who can you introduce us to? How have you helped your portfolio companies with follow-on rounds?
Do we get along? You're going to have quarterly board meetings with these people for years. Personalities matter.
And then there's the small print most first-time founders don't think about. "VC is not free money," Michael says. When you sign a contract with a VC, you typically create a new class of shares that comes with approval rights. Selling the company, taking on debt, changing the direction of the business, hiring expensive employees, even next year's budget: many strategic decisions now require investor sign-off.
You get capital to grow faster, but you also give up a significant amount of entrepreneurial autonomy. Business angels and bank loans, by contrast, generally come with fewer covenants, though bank loans in Germany usually require personal guarantees, which is its own kind of risk.
One more thing Michael says founders often miss: vesting. It protects the company if a co-founder leaves early, because the leaving co-founder needs to give back his shares (partly). If you're setting up a company with co-founders, build vesting into the original shareholder agreement, typically a one-year cliff (all shares need to be given back if you leave before) and four years of monthly vesting thereafter. VCs will require vesting anyway. Notaries won't volunteer this advice; you have to know to ask for it.
The Numbers Game: Rejection Is the Process, Not the Exception
Here's the reality Michael wants founders to internalise: raising a VC round takes a minimum of six months of dedicated work, usually by one full-time person on the team. And that's after you've got your pitch deck polished and your investor list built.
"It's a numbers game," he says. "I don't think 10 investors is enough. You need 200. Talk to 200, and you get 199 no replies."
That math sounds brutal, and it is. But it reframes what rejection actually means. A "no" from one VC isn't a verdict on your company. It's one data point in a long process. The founders who make it through are the ones who treat every rejection as feedback: tweak the deck, sharpen the financials, ask for referrals to other investors who might fit better. Michael also recommends talking to other founders who have recently raised, not just for moral support, but to calibrate your expectations and learn what actually worked.
Each individual investor conversation is itself a long process. A first call with an analyst. Possibly a second call with another analyst, then a senior analyst, then a partner. A separate call specifically about your financial plan. "You can easily have five meetings with a single investor before they decide to issue a term sheet," Michael says. Due diligence begins only after the non-binding term sheet is signed. You hand over your signed contracts and more information about the technology, and reference calls take place. Then final contract negotiations, which alone can take another month.
Does every startup need to put itself through this?
Absolutely not. In Michael's estimate, only 5 to 10% of startups are genuinely VC cases. If your target market isn't big enough, if your ambitions are more modest, or if you're building a sustainable engineering business rather than a scale-or-die play, bootstrapping, bank loans, public funding, crowdfunding and business angels or friends & family may serve you better, and leave you in control of your own company.
The Bottom Line
Raising venture capital is a multi-year commitment that starts long before your first investor call and reshapes your company long after the money lands. The founders who succeed aren't the ones with the flashiest decks. They're the ones who did the customer work, built a committed team with real equity, picked investors deliberately, and went into the process knowing they'd hear "no" 199 times before they heard "yes."
Michael's closing advice is characteristically direct: use every bit of public funding and support you can get your hands on. Accelerators, incubators like the xG-Incubator, and university support. Talk to coaches. Talk to other founders. And above all, talk to people. "It definitely doesn't work if you just sit in your room and work on your computer," he says. "You have to go out… the earlier the better."
Whether you raise VC or not, that part doesn't change.