A Black YC alum explains how he raised $107M

The founder of Captain, Demetrius Gray, has raised an impressive $107.3 million so far, but he’s no first-timer. While his first startup, WeatherCheck, didn’t work out the way he envisioned it, that business paved the way for his current success.

“The incentives weren’t aligned,” Gray explains.

His current startup, Captain, advances money to contractors for home repairs following natural disasters, then gets reimbursed by insurance companies or the government.

The idea has resonated with investors: Using the methods outlined below, Gray was able to raise $100 million in venture debt and $7.3 million in private equity.

I’ve compiled nuggets of valuable knowledge that he shared with me about his experience raising capital, sharpening pitches and networking, as well as the strategies he’s found most helpful as a Black founder.

Fundraising as a Black founder

Gray has developed many mentor relationships, particularly in the Black entrepreneur community. He says he often sees that Black founders stop trying to fundraise too quickly.

He says everyone hears “no,” but it’s important to keep pushing. Eventually, you’ll find an investor or a fund that loves what you do.

His second tip is all about putting on a show: Being unforgettable is the difference between getting passed over and funding your startup.

“It’s a performance,” he says. “The Black community [is] a community of a lot of entertainers and athletes. Take a cue from Serena Williams, Mike Tyson, Floyd Mayweather, LeBron James — the greats — and treat it like it’s a performance.”

Three ways to raise

Gray breaks down the methods he used to fundraise into three steps:

“People see the headline, ‘$107 million raised.’ What they don’t really understand is that it was a progressive process of building relationships over time that made that possible.” Demetrius Gray, founder, Captain

Use Tier 3 investors to get pitch-perfect

It’s the norm to aim to get top-tier investors on your cap table, but Gray says you shouldn’t discount smaller VCs. He used several Tier 3 VCs as a sounding board for pitch feedback.

“Most VCs would be a little shocked to know that they’re being used in that way, but it’s happening a lot. We perfected the pitch [with] smaller funds and lesser-known VCs,” he says.

As long as you’re not completely barking up the wrong tree, this tactic is likely not wasting VCs’ time either. Smaller checks could still come from lower-tier VCs.