Why do so many VCs say "come back to us when you have a lead?" Is it because they lack "guts" or "conviction" or want to piggyback on someone's work and experience? Sometimes, yes, these are the reasons.
But much, much more likely the reason is the mismatch of check size and runway (or round size).
E.g., let's say a company has $50k monthly burn, and they want to raise $1M to have 20 months of runway (simplification) and enough time to get to the next milestone to raise at the higher valuation. And let's say a VC really likes the company and is willing to invest. But their check is $100k (based on the fund size, they can't do more). Should they sign and wire? If they do, the company will have 2 months of runway, and if no one else invests in these two months, the company will go bankrupt and it will be a really quick write-off for that VC. So that VC has to wait until you have at least half of the round ready before they sign and wire, to make sure the company has a chance to get to the next milestone.
I also was in a situation of investing early with a small check that didn't give enough runway. Thankfully, thanks to our LPs, we were able to increase the check size over time, so now we can move in first into small rounds (when a company has low burn) - $500-700k rounds. However, if a company needs to raise $2M or $3M, our check is still too small to go first.
It's useful for founders to understand how VCs operate.
Partner at FJ Labs
2mocongrats!