Key Takeaways
- Nico, the co-founder and CEO of Corgi, a $2.5 billion insurance company, follows a counter-intuitive fundraising rule from Brian Chesky: “never take the highest price.” (play from 38:00) Corgi consistently opts for the second or third highest offer.
- Fundraising speed is critical. Nico believes being in the market for “a couple days at most” (play from 38:23) is ideal, stating that a prolonged process is "bad for the company" and a sign of weakness.
- A quick fundraising round isn't just efficient; it’s a signal. Nico asserts that “good companies do get deals done” (play from 40:01) quickly, implicitly making speed a form of due diligence for savvy investors.
- Choosing the right partner over a higher valuation is paramount. Nico cautions that a “bad investor is much worse than no investor,” (play from 41:33) emphasizing how difficult, if not impossible, it is to remove problematic investors once they're in.
- The core of Corgi’s fundraising strategy aligns with Brian Chesky's Fundraising Price Rule, prioritizing speed and investor quality over maximum valuation.
Brian Chesky's Fundraising Price Rule
Here’s the specific framework Corgi’s CEO Nico uses for fundraising, directly from his conversation with Harry Stebbings:
- The Rule: never take the highest price
- Nico's Application: we always go with like the second or third highest price. I don't do a lot of negotiating on price. I just kind of see where the market's at and then um if something seems reasonable, I just stick with it. And uh you know, we could raise all of our rounds at higher prices, but we never do.
When This Works (and When It Doesn't)
Nico explicitly states, “We could raise all of our rounds at higher prices, but we never do.” (play from 38:18) This immediately tells you this rule comes from a position of leverage. Corgi, a company valued at $2.5 billion, likely has multiple competitive offers. For a founder with significant inbound interest and the luxury of choice, this rule shifts the focus from maximizing short-term valuation to optimizing for long-term partnership and reduced future headaches. It’s about picking your co-pilots carefully, knowing a difficult investor can sink the ship faster than a slightly lower valuation.
However, this rule isn't for everyone. If you're a first-time founder struggling to get any offers, or if the highest offer is the only one that truly meets your capital needs, adhering to this might be reckless. The framework assumes you have the luxury to decline a top offer and still raise sufficient capital. For those early stages where any capital is good capital, or where investor quality differences are less pronounced, chasing the highest price might be the correct, albeit riskier, play. It's a nuanced approach that gains power with your company's growing strength and negotiating position.
What to Do With This
Let's say you're a 27-year-old founder. Your seed round just closed, and you’re already getting inbound interest for a Series A. You receive two term sheets: one from a prestigious but notoriously hands-on fund at a $50 million pre-money valuation, and another from a slightly less known but founder-friendly fund at $45 million. Both funds offer roughly the same amount of capital.
Apply Brian Chesky’s Fundraising Price Rule. The Rule: never take the highest price. Your application, following Nico's lead, would be to consider the $45 million offer. Why? Because the $5 million difference in pre-money might not be worth the potential headaches of a difficult investor. A "bad investor is much worse than no investor," and that extra $5 million in valuation could come with a price you pay in time, distraction, and autonomy. Go with the fund that aligns better with your long-term vision, even if it means leaving some money on the table. Speed matters, too: pick the investor who moves fastest and shows the clearest commitment, as quick rounds are a hallmark of "good companies." This week, analyze your potential investors not just on price, but on speed, cultural fit, and reputation among other founders. Then, be ready to walk away from the highest number if the partner doesn't feel right.