Aaron Sokol

Since posting our guide on how to price AI software, I've been inundated with founders looking to talk through pricing strategies for their startups. Unfortunately, most are skipping the critical first step.   They are spending lots of cycles iterating on "how" to charge (e.g., usage-based, outcome-based, hybrid, etc).   But they're neglecting the most foundational element: how much to charge. We're finding that with proper ROI frameworks, AI products are able to capture 25-50% of created value, which is significantly higher than traditional SaaS's 10-20%.   Here's how the best founders are achieving these pricing levels:   1️⃣ They bring pricing discussions into the sales conversation early   The worst thing is waiting until procurement to talk about pricing. The role of enterprise procurement departments is to minimize spend, not to assess value. They lack budget categories for 'AI that does the work of 3 people'—so they'll try to squeeze you into their existing software line items.   When prospects seem hesitant to discuss ROI upfront, don't push. Instead, propose a value audit session. Sit down with them after they've used your product for a few months and calculate ROI together based on real usage data.   I've seen founders use this brilliantly during negotiations: "I'll give you a discount, but in six months we need to do a value audit." It's a fair trade that shifts the conversation to outcomes.   Here's a bonus move: always offer outcome-based pricing even if customers don't choose it. Simply presenting it signals confidence and willingness to share risk. When positioned alongside a fixed fee, it makes the fixed fee look fair by comparison.   2️⃣ They calculate ROI holistically, not just hard savings   Most founders focus only on labor reduction or vendor spend cuts. But that leaves money on the table.   Factor in the opportunity cost of time efficiencies. Include potential implementation cost differences compared to traditional SaaS. In many cases, AI products deploy faster and cheaper, which should be reflected in your ROI calculations.   Work with buyers to agree on ROI inputs upfront. Once they've signed off on the framework, challenging the outputs becomes much harder.   3️⃣ They use the "acceptable, expensive, prohibitively expensive" technique   Rahul Vohra used this exact approach from Madhavan Ramanujam’s "Monetizing Innovation" to price Superhuman:   To gauge willingness to pay, ask three questions: 1. "What would be an acceptable price?" 2. "What would be an expensive price?" 3. "What would be a prohibitively expensive price?"   Willingness to pay typically lands near the "expensive" point.   --   I've watched too many brilliant AI founders build incredible products only to leave millions on the table by treating pricing level like an afterthought.   Don't be one of them.   P.S. The complete pricing guide (with the decision framework and tactical playbooks) is live on our website. Link is in comments.

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Common wisdom in VC says relationships are a long game, but we've all got a 60-second pitch. Here's what I've learned about relationship-building in an inherently transactional industry.   In business and in life, relationships are important to build the right way. Too often, networking feels transactional and impersonal. No small talk, no curiosity. Just straight into pitch mode.   I totally get it. As a new fund manager raising, I understand the urgency. But it still rubs me the wrong way. I genuinely like meeting people, getting to know them, and being helpful whether that’s investing, offering insight, or connecting them with others in my network.   I see this play out constantly at GP/LP events with family offices, FoFs, and other LPs. You spot the GP laser-focused on LP name tags, making a beeline to pitch. I empathize with both sides, being pitched to and trying to raise. But no matter how badly we want to speed it up, trust has its own timeline.   At the end of the day, everyone wants to feel seen and heard: founders, GPs, LPs alike. That’s why I always start with something personal and non-work related when I meet someone new. It lowers the stakes, softens the interaction, and often uncovers a real connection.   For example: Last night, I was talking to someone from the exact kind of shop every VC is pitching. They mentioned living in Boston. I immediately lit up and asked where (my mom’s side of the family is from there). We went into the usual "so what do you do" and when it was my turn, I said I’m a GP at a new VC firm in NYC and shared a bit about our thesis. Tension hung in the air as, which I found out after the fact, they were waiting for the "ask" of either intros or capital.   When they gently mentioned that our fund might be too small for their VC allocation, I jumped in to clarify we’re targeting different types of LPs where the check sizes make more sense and that's not what this was about. I was genuinely curious about their work on secondaries and learning more about that segment of the market. That changed everything.   Their face lit up, posture relaxed, and the passion came through. We ended up talking for over 30 minutes, discussing the effects of secondaries on the alternative asset market. We exchanged contact info at the end. They said, “Let me know if there’s any way I can be helpful.” I offered the same.   Who knows what may happen in the future. But I walked away with two things I know for sure:   1️⃣ I learned a lot about the current state of the secondaries market from someone who's been deep in it for 5+ years. 2️⃣ I made a meaningful connection with a sharp, kind person I’d gladly reach out to again.   Relationships are a long game. But they’re also full of surprises because you never know what may happen or not happen down the road.   What I do know is that the more genuine you are when building relationships, the more likely things come full circle. #DaringVentures #AuthenticNetworking #GP #LP

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Can't get a VC to commit after multiple meetings? Good. Here's the truth you need to close. VCs move for two reasons: ego and FOMO. Ego: They believe they see what others miss or don't understand. FOMO: They don't fully get it, but interest from other investors makes them fear missing out. VCs don't decide based on a process; they're running on vibes and dinner conversations. How to close a VC: Step 1: Identify a partner already hunting for what you're building. You'll hear them sell you on your own deal. Answer questions with questions: "What excites you most about this space?" Then build on their words, not yours. Step 2: Operate like you have an investor offer on the table but prefer working with them. Focus every conversation on round dynamics and closing timeline, not product details. Step 3: Get at least three VCs to 50/50 on saying yes. Call them with this exact script: "I appreciate your process and see value in having you on board [specific compliment]. I also value transparency and your time, so I want to update yo the deal could close in the next week." That's it. Don't ask for an answer or anything else. Just inform them. There are only two responses: they'll tell you not to wait (which means a pass) or they'll tell you they're interested and outline their closing process. While every struggling founder perfects slide 27, the VC just signed a check because another fund made them jealous or because backing a company made them feel brilliant. Stop feeding their brain. Feed their ego and FOMO to get funded.

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Want to raise money from VCs? Make friends with associates. Many founders believe they should try to skip the line and go straight to the General Partner of a VC fund. This is almost always WRONG. Why? Associates are the key to unlocking VC capital. The associate at a VC can help you to: - Craft your pitch to better match what the VC is looking for - Understand how to answer questions in a way that is more likely to impress the partners - Fix any gaps or red flags before the deal gets to IC - Help you prepare your data room to match/exceed VC expectations - If it's not a good fit they'll let you know early and save you time

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VC Real Talk #8: The Fundraising Time Sink Endless pitching and chasing capital can wreck product momentum and founder sanity. Pitch fatigue is real… and it shows. How do you balance fundraising with building your company? Ever seen pitching go off the rails? Offer your best hacks or horror stories. Next week: Which startup metrics actually move VCs to invest? #Startups #Entrepreneurship #Innovation #VentureCapital #Leadership #VCRealTalk

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