Ask HN: Anyone else finding it impossible to find a lead investor?

[defencetechhn]

Hey HN! This might be somewhat EU-specific, but I feel like I'm going insane here. Currently fundraising for a seed round in an "attractive" sector (defence and AI) and we're finding it very hard to get any VCs to commit to being lead investors. VCs are super excited/optimistic about our company and willing to immediately jump on board as soon as a term sheet is signed by a lead investor.

Trouble is that absolutely everyone is taking that position - leaving us in quite a pickle. I've gone through fundraising cycles before and never encountered something like this before, hearing the same from a bunch of other companies as well. I understand that the macroeconomic situation has made many more cautions, but this is just odd.

Would really appreciate insight from both VCs and/or other founders currently raising.

[muzani]

It's funny that they keep repeating the saying "be greedy when others are fearful" and "microsoft was founded during a recession". But when the time comes to act, they're waiting for someone else to be greedy first.

[kordlessagain]

Hammer on the product alignment problem first, and be sure to use some reasonable barrier to entry that will prevent others from doing it later. The primary problem right now with AI startups is that what they are doing isn't defensible and they aren't showing clear ways they can defend their position moving forward. By having good product/market alignment and a means to build up data (from interactions) that can be used to train later, you might be able to sell this better to the VC.

Having been through this already, I can tell you that "being an alternate solution to a large market" looks completely different than "we're entering a new market with this cool thing that solves cool problem". Be sure to find differentiating factors that resonate well with product fit and adoptability, and go out and find the problems you can solve with a little bit of code and some simple explanations.