Pre-Seed Secrets: What Investors Really Look for (It’s Not Your Pitch Deck!)

"RAISE CAPITAL LIKE A LEGEND: https://go.fundraisecapital.co/apply"

Stop picking founders the old school way—it’s the fastest path to investment failure in 2026. 

In this episode of Making Billions, Ryan Miller sits down with Joe Alalou, General Partner at Daring Ventures, to reveal the new blueprint for Pre-Seed and Venture Capital success. 

Joe shares the "Daring Ventures" filter for identifying generational founders, in an era where AI has turned technical skills into a commodity, the "alpha" has shifted to human traits that machines can't replicate: grit, tenacity, and an undeniable right to win. 

This isn't just a manifesto on investing; it's a tactical guide to navigating the 2026 investment climate, mastering deal flow, and scaling a fund when information is incomplete.

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[THE HOST]: Ryan Miller is a recovering CFO turned angel investor in technology and energy.

[THE GUEST]: Joe Alalou is Co-founder and General Partner at Daring V

Transcript

Joe Alalou 
You have to be able to pitch right, and you have to know what you're selling. This is a sales business. This is an investment management business, trustful relationship business. It is not a manifesto business. We're focused on returns. It taking that inefficiency that we were seeing between capital allocation and it took a few refinements, was like kind of tumbling, polishing a rock to get it to that place. That was a learning process, and every manager is going to have to go through that as they're practicing. And truly, I don't believe don't believe it matters whether you're a first time fund manager.

Ryan Miller 
My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it.

Ryan Miller 
You will fail as an investor if you're still picking founders the old school way. In this conversation, we reveal the real traits top VCs look for and how missing them could cost you billions. So if you want to outsmart the market and dominate the next decade, this episode's for you. All this and more coming right now, here we go.

Ryan Miller  
Joe, welcome to the show man. 

Joe Alalou 

Ryan, thank you for having me. Huge fan of you and the Making Billions community, and I'm just stoked to be here and looking forward to having a really, really fun and engaging conversation with you.

Ryan Miller 
Hey, stoked to have you, man. So let's, let's dive in, brother, when you're talking to add Daring Ventures. What's the core filter that you guys use to decide very quickly whether a founder is even worth serious consideration?

Joe Alalou 
Yeah, we look for is, you know, what's the founder's unique edge in what they're building? Industry experience for us is absolutely paramount. We ultimately want to know what does this founder know about the rest of about their market that the rest of the world just doesn't understand. And it's that specific knowledge that we think is going to make that their approach super sticky. They're going to be really, really compelling to customers, they're going to get out there way faster than everybody else.

Ryan Miller 
Brilliant. So how does that help you win? Now that you're looking at founders, what does that do, as far as creating a short list, or how much weight do you put on what you discover from from this?

Joe Alalou 
Yeah, we weight the founders, founder market fit and that unfair advantage extremely heavily. We think that that is the number one decider of success at the pre seed stage, when everybody can build something, having that speed to conviction and knowing what to build faster than everybody else, that just gives you the edge that used to be dominated by technical know how. Technical know how is obviously very important, and that's something that we that we slide in. We want to see well rounded, strong teams, but we do want to see that the focus on the founders, who's got just an undeniable right to win in their space. It's almost always defined by a long career, a long exposure, inherited knowledge of being in or around that space, of growing up in that space in a way that nobody else really can.

Ryan Miller 
Yeah, it almost helps you to weed out the tourists from the Titans, doesn't it?

Joe Alalou 
Yeah, that's absolutely right. We are looking for generational founders who are, you know, building the next era of just massive companies, and being a founder is extremely hard. It's a very, very long and lonely road, and it's not a great place for tourists and people who backed out at the at the first site.

Ryan Miller 
Difficulty, yeah, you know, I was talking to he's a founder legend. He's also a partner of mine at Darqside, but Travis Steffen's his name, and we had a good chat. We're saying it seems like AI is teaching people not to work like you, almost outsource your thinking. And we were kind of bellyaching of how hard it is. This thing that we're talking about right now is just finding good founders who just they have the gusto and the chops to push through the challenging things that they will face. And obviously we're there to help them out, but you're spot on, man, like finding the right people and separating those those titans from tourists and picking those, that's the challenge and sounds like you've got quite a good system. So you know, once they pass that initial filter, what is your step by step process for evaluating whether they're actually truly exceptional?

Joe Alalou 
Yeah, once they pass through the filter, you know, we get a line on myself and my business partner, Maddi Holman, the other GP at Fund, you know, once we're aligned on the founder, then it is on to typical technical diligence, product and market diligence, and a normal due diligence process that you'd expect for an early stage startup. We want to see, of course, that they have that alignment. But we also need to see that they have, you know, that there's something real there. So we're always looking at for a product that is already built. Pre revenue is okay, but we don't invest at pre product. We're looking to see, you know, do they have the right distribution channels, right? Do they have a, do they have a strong partnership that can sometimes supplant, you know, early revenue. If this is a business that's operating in an industry where there are really long sales cycles, we will accept, and we're, you know, we're understanding of the nuances and dynamics of different businesses, because we tend to play at things that are people, process or paper, heavy, regulated, complex, very. Labor intensive. And these are not always the easiest businesses to easiest industries to sell into. This isn't, this isn't consumer tech, right? So we're always looking for proof traction, stickiness, and that ability to go to market faster than everybody else.

Ryan Miller 
Brilliant and so, and you're right. I mean, there's no point going too far down the due diligence route. And will tell you have at least some of these that fit, sounds like your Buy Box. I love that. And so during that process, what signals do you intentionally overweight and which common signals do you just completely ignore?

Joe Alalou 
The big one for us is, what is the founder's relationship with adversity, right? Do they have the grit? Do they have the tenacity? Are they able to learn and think on their feet. We're looking for what is this and what is this founder gone through in their life, personally, professionally, that gives them that resilience. There's there's a lot of people out there who have never heard no before in their life, in the market, will not hesitate to tell you no. Customers are ruthless with their dollars. They want a product. They want a service that is worth it through them, or they'll just walk away. They don't care where you went to school. They don't care who your mom or dad is. They are, you know, they're ruthless, they're vicious, and they're honest. And we're looking for founders who can, you know, who can withstand that.

Joe Alalou 
We underweight, you know, prestige and, you know, technical ability, especially at the earliest stage. We don't invest in hardware. You know, we're backing founders who are due to BB software. They're not in the atoms business. They're not in the sales business. They're not doing stuff off planet, right? These are, those are places where deep technical expertise can be really, really advantageous. We don't see that as something that's necessary for us. Of course, we're not against it, and it is important to have a team with technical capability. We're shipping software at the end of the day. But the number one thing that we're looking for is that is that tenacity? What that really means for the investors who back us is that we are putting our dollars behind founders who are now never going to quit. You know, when you invest in a VC fund, this is a long term relationship, and it's our responsibility to our to our LPs and also to our founders. You have to be in it from a long haul. We uphold that end of the partnership, and we expect our founders to be there too, because the going will get tough, it will absolutely get tough, and we all need to be in it together.

Ryan Miller 
Brilliant. So how do those founder insights translate into a broader investment thesis at Daring Ventures?

Joe Alalou 
Yeah, we, you know, founders have always been the most important thing at venture capital Fitbit, in the lifeblood of VC and what skills, what talent, what knowledge that founder brings to the table has always been really important, and in the past, that was very, very aggressively weighted towards technical skills, right? You know, 30 years ago, people didn't build software for people. Companies were stood up to build software for other companies. You know, down the line, then it's all. You need to hire a dev team, and somebody needs to go down to fries and pick up the servers and wire them up. And, you know, even as recently as 10 years ago, why would you bother built it, building it when you can rent it. But the barrier to building has been so it's basically shattered, right? Anybody can code that is eliminated. And, you know, the grit and the resilience and the resourcefulness that founders is taking an app is taking a front seat. AI has allowed people with great ideas who don't have coding skills to prove out that market. Rather than fighting over like, Hey, tell me, engineers. I promise you, I promise you, this is going to be good. They build it, they prove that traction, and they can hire great engineers. Things are really key insight here, which is that the founder profile has shifted, and investors, you know, it's this is such an exciting time to be, you know, to be an investor, and investors should remember that the aperture has just opened. It is expanded in a way that has never, you know, it hasn't expanded in a long time. But there are people out there who are having their web 1.0 moment right now, you know, downloading cloud code, pushing code for the first time, signing up for a GitHub account, solving problems that they've always been thinking, oh, man, somebody should build something. And then they're looking in the mirror and thinking, wait, I might be somebody that may be me. And they're taking that plunge, and we're so excited to see these, you know, this new generation of founders that are, they're going crazy at building.

Ryan Miller 
It's almost the march of the vibe coders. I love it. And like you said, with with, with AI and vibe coding now, I mean, it's, it's a maturing market, but I think that skill, like you said, it used to be top priority all that people who know how to link up servers and all of the coding and all that stuff, and you're like, it's not really that much of a rare skill anymore, because AI does a lot of the heavy lifting. I'm being very general. But now, I think what we're saying here is the qualities, the intangible qualities of a founder, not just the ability to build and code, but it's actually with grit and tenacity. Is that kind of what what you're seeing out there right now?

Joe Alalou 
Yeah, absolutely. I mean, there's an infinite amount of knowledge now, and an infinite amount of synthesis and analysis of that knowledge. Scarcity is a great editor and you know, knowing what to do, I can make you a 10x developer, a 10x engineer.

Ryan Miller 
Yeah, I love it. So then, with that, how do you design your deal sourcing strategy so it consistently surfaces founders who fit into that thesis, those type that you're talking about.

Joe Alalou 
Starts with getting out of the office, both myself and Maddi we go to we have, over the last year, embedded ourselves. In the New York VC ecosystem, we are each out 2, 3, 4 nights a week, meeting with founders and going to events and representing not just our firm but our portfolio and our thesis, getting out there, listening to founders and pounding the pavement and spreading spreading thesis and our viewpoint far and wide, and we've been really, really fortunate to have built some really strong relationships. We get out of New York when we can, we build it public. We're loud. We, you know, we won't hesitate to tell the world that we're out there and that we're we're investing at the pre seed stage, and it's served us really well. We've seen over 1000 inbound deals over the last year, we're really fortunate to have such a great resonance with the founder community.

Ryan Miller 
Brilliant. So, you know, with that, so we talked about founders and finding them, and deal flow and all that comes into managing a fund effectively. You know, given the limited time and even imperfect information that you and a lot of VCs face, how do you structure that diligent to move fast without missing fatal flaws.

Joe Alalou 
Yeah, we leverage networks, and I think every VC says that, but, you know, we see this as the number one way that we get to move faster. Our relationship with experts is supremely helpful. My business partner Maddi has one of the strongest corporate venture capital rolodexes of anybody I've ever met. She spent nearly a decade as a CBC investor, and she knows all the right people to ask right questions and to get intros to, you know, the right downstream investors from corporates who may be able to help us out and tapping into relationships with experts in other parts of our lives. I mean, we we give other people an opportunity to be a value add by reaching out to them and asking them questions about their area of expertise and what they're seeing in their industry. And folks love being able to help, and they love to be able to demonstrate, even in their own line of work, that they are taking that next step and they're bringing value inside an organization by saying, hey, you know, my friend, who's an investor, just told me about somebody who's building this and kind of bringing those insights from pre seed venture capital into later stage, more mature enterprises, and having a network of industry experts that you can tap for insights is crucial. And when I say industry experts, these are not PhDs, these, you know, these are not people who are just in theory. A quick example is we were doing diligence law practice pro one of our portfolio companies, which is in MP Pharma sales enablement space, I called up a friend of mine who runs a vet tech distribution team, and I asked him, I was like, hey, does this sound helpful to you? And we were off to the races there. So tapping those different experts from different parts of your life extremely helpful when it comes to speeding up and speed running the diligence process without shortchanging our LPs on our ability to, you know, to get to strong conviction on on a portfolio company and an investment.

Ryan Miller 
Yeah, it's, it's equal art and science. And, you know, because it's art, because we don't deal with a full, complete data set like you would in private equity or even public markets. For that matter, you have to go off a lot of this, this art, this gut feel. And so then my question is, is when data is incomplete or ambiguous, what decision rules keep you from overthinking or even stalling?

Joe Alalou 
Yeah, we know that at this stage we are going to be dealing with incomplete information, so we go into it trying to fill as many gaps as possible. Our proof point is, can we make a can we make a story what they're doing and figure out how that product fills in the gaps? If we can't really recreate that story, if, if the if we're having to make gigantic intellectual beats for how this business is going to become venture scale, or how this founding team is going to adapt in the future, if those we're making these huge leads, and those leads are bearing a lot of the weight, it's likely not going to be the right deal for us. So if it's logical and linear, and that doesn't mean that it's predictable or unexciting, it's just understanding, how is this team going to bridge those gaps? Do they have the superpowers to make that virtually impossible looking leap look like a walk in the park? That's how we can get to conviction really fast, if we're doing a lot of mental gymnastics to get there, rather than wasting a lot of time, that's how we're going to get to a no very quickly. It all has to do with, do we, you know, can we build a belief system around this team? And it can be challenging without all the information, but this is, these are the rules of the game, and we have to play with the information that we have.

Ryan Miller 
So what, for people listening, what would you say that means to them?

Joe Alalou 
Yeah, I think, you have to listen to founders right looking for thought gaps in the founders, the way that they explain their relationship to the business, their understanding of the problem, the product, the market. If there's too many gaps, and you consistently find yourself having to go back and trying to piece things in, like, an incomplete puzzle. Like, like, I said, like the, you know, the premise of the question, we're all dealing with incomplete information. We're putting together a puzzle where app the piece is missing, anyway. If you're dealing with even less puzzle pieces than everybody else, if that's probably a good sign to move on, don't make it harder on yourself. And you actually have to.

Ryan Miller 
Yeah, so. In the early stages say, like seed or pre seed, which deal terms actually matter, and which ones do you think are just noise?

Joe Alalou 
So we only invest at the pre seed stage on a lot of it is on safe notes and the caps matter. But you know, ultimately, with the safe note, it is disadvantaged as a as a security or promise for a security in the future. So, you know, I think at the pre seed stage, there's just not a lot of valuation, or there's not a lot of, you know, deal structuring mechanics and back and forth, at least in the deals that we're doing. You know, at our size and check size, we are very valuation sensitive. We would much prefer to do convertible notes. That can get complicated, though, with you know, founders who are participating in a large founder ecosystem, they've all been brought up on the, you know, the YC safe note, and they don't understand why on earth you would ever want to do a convertible security. It's something of interest. Complicated. Just give me the safe note. Why are a few million like that's a hard conversation sometimes, but we ultimately, our responsibility is to provide outsized returns for our investors, and we're not going to be able to do that if we have no ability to recoup capital. And we do want to hold founders accountable and hold them to a certain standard. And that's a direction that I think we're starting to see a bubble of that bubbling of that below the surface here in New York. And quite frankly, I think we're, you know, I think there's many investors who are excited to get, you know, to have the deal term swing back, not away from founder friendly, but to more founder and investor fit.

Ryan Miller 
Hey, thanks for listening to Making Billions. If you liked this episode, could you do me a huge favor and go leave a review? This helps us to get the podcast to more ears, to help people raise capital, learn fund management strategies and serve our mission, to help fund managers and deal syndicators to gain greater hope and focus as they build their empire. All right, let's get back to the show.

Ryan Miller 
So well, let's fast forward then. So you find a founder, they've got the grits. You feel good about it. Your art and your science of selecting the right deal tends to take off. So now you cut a check, and now we're off and run. So this now we're married to this thing. So where do you at that point, where do you focus your time to create the most leverage to help those founders that you've placed with?

Joe Alalou 
So we'll help founders with the things that they need. We help them raise their next round. We want to focus. It's a small team. It's Maddi and I. We're a small fund, and we want to, instead of trying to do 1000 different things, not super well, we're going to do one thing, really, really, really well, and that's to help them raise their next round. It comes from, you know, Maddi and I, we have, we both have strong networks. Former investment banker, she was a former CVC investor. We know the right folks in the right places. Maddi can, you know, help founders get the right intros. And I help founders understand that when they're going and talking to these next investors, if you're preparing for the partner, you're going to be sorely disappointed when you get the, you know, the first year associates straight out of business. So the hardest sell for the founder is, how are you going to make that associate who has talked to everybody else just like you? How are you going to turn that into your champion, who's going to turn around to the person who hired them, who they are terrified of and feel super fortunate to have a job and be like, hey, this is the one that I'm going to hang my hat on. I want to, you know, hitch myself to this deal and become your champion. And I've been on my my background, you know, running Wall Street after community college, getting kids who would normally get laughed out of a resume stack into first round interviews and ultimately at two full time jobs. So we focus on helping founders raise that next round, and we plug in. Where else, you know, wherever else we're we're able to help but hot, hot intros to folks that we know, talking up our companies, getting some excitement about them.

Ryan Miller 
Brilliant. So that's all like founder selecting the right deal and getting the information, looking for plot gaps. But you also have LPS who invest in you, and so which proof points, or say, assets most increase the your LPS confidence when you raise capital for the fund?

Joe Alalou 
We've been consistently looking for patterns in our LPs, and we've been tapping into these networks of professionals that we know one of the things that just really jumped out is like a fractional CFO and other fractional professionals who want to wear the badge of a fund that is, you know, out there, you know, in the arena, day to day, hanging out with founders and and, you know, meeting them where they are, and using that as way to signal, like, you know, everybody's out here trying to get some capital from you. There's a lot of service providers. There's a lot of, you know, it's, it's like professional athletes. They publish your your salary in the newspaper. They publish your round on Tech Crunch. Everybody wants to get a piece in that pie. How do you differentiate yourself in a world of limitless AI outreach hangers, you know, hit yourself to a to a VC fund that is always close to founders, and use that as a way to to enter the ecosystem as as a friend, not a foe. But we're consistently looking for, you know, those patterns in LPs. And really comes comes down to relationship building, right? That's our that's the name of the game.

Ryan Miller 
That is the name of the game. We always say rep, I like to say, especially for those listening to the show, reputation, relationship and results are the three most valuable assets in your possession. And what those do is, when you optimize it, and if you think of it like I do, an asset is something that puts money in your pocket. Get so if your reputation can do that, your relationships can do that, and definitely results can can do that. But what all that comes to, the common pinch point of those three, is trust. It builds trust with people who place with you and like, I like to say trust, it's more important to go for trust than transaction. If you go for the transaction before the trust, you probably get neither. But if you're, if you're good, and those people are good at raising capital, now you're at a place to say, Well, first I got to build the trust. LPs, investors need to trust me, and when they do, then that trust converts into a transaction, right? So high finance is a lot to do with trust over transactions. I love it, man. Anything else you can add to that?

Joe Alalou 
No, I mean, you hit the nail on the head. And, you know, it's funny. We went through this entire you're refining your pitch, you're refining your pitch, you're refining your pitch. And the first LP that wrote a check, Maddie, was going through her like, other inbox on LinkedIn, and it was an alum of her university who's professional athlete. He's like, You guys are you know, I love you following you guys on LinkedIn. I was like, Can I be in your fund? I'm like, wait all of that pitch work. And of course, pitch work is important. But like, that was the first check that we got. That we got was, like, check your other inbox. Like, so yes, it's about reputation. It's about trust. And, you know, everybody's got a plan until they go out and start fundraising. And checks come from all of the places that you never expected, none of the places that you were really hoping.

Ryan Miller 
Yeah, yeah, for sure. It's, it's, it's the Wild West, for sure. So, you know, my question then is, if an emerging fund manager wanted to replicate your approach, what parts of your system must be in place before they even think about raising capital?

Joe Alalou 
Yeah, you have to be able to you have to be able to pitch right, you have to know what you're selling. You can practice the same thing over and over and over again, but you have to know what you're selling. And you know, ourselves at Daring Ventures. We went through multiple iterations. The thesis has never changed. But how are we presenting an investable product? This is a sales business. This is an investment management business and trustful relationship business. It is not a manifesto business. It is not a, you know, writing long, long winded, you know, missives business. This is a we're focused on returns and taking that inefficiency that we were seeing between capital allocation and founders who we think have an outside ability to perform. It took a few refinements. Was like kind of tumbling and polishing a rock to get it to that place. That was a learning process, and every manager is going to have to go through that as they're practicing. And truly, I don't believe it matters whether you're a first time fund manager or you're spinning out of a large fund, because, you know, you're going to have to play up to your level of competition. For us, it's high net worth individuals and family offices, and you know, for somebody else, it's going to be CalPERS, right? And you're going to play up to your level of competition. And I think the other thing that is really important to remember is this is not just sitting in investing seat. We are a startup too, right? We are, we have operational responsibilities. There are things like the tech stack. There are things that like, you know, finding an office and making sure that we have cyber security and business continuity plans. Everything you know, in my life that was somewhere between probably not my job and definitely not my job is all now 100% my job. I have tech support. Maddi is HR, you know, we wear different CFO hats, marketing, hats, everything has sweeping the floor hats, like we do everything. So, you know, having that, you know, remembering it's not all going to be deal work. You have to be in that place too, and it is the most fun and the most exhilarating thing of all time, working on your own project and all of those not my job. Things are honestly the most fun part of the job.

Ryan Miller 
Yeah, that's right, man. So before we wrap things up, final thoughts, any way that people can reach out to you, ways to connect, learn more about what you're up to.

Joe Alalou 
Yeah, we are very active on LinkedIn. My full name Joseph Alalou, and you can read our sub stack. It's at writing.daringventures.vc, and we're always looking forward to engaging in great conversations with people who want to challenge us, people who want to collaborate with us, people who ultimately want to work with us in one way or another. We're always just so stoked to to hang out and chat with other people who are out there in VC community.

Ryan Miller 
Awesome, man. Well, this has been good to have you. And just to summarize everything that Joe and I spoke about, make sure that you get good at pitching understanding how to market yourself and how to close deals is critical when building a fund, as well as listening to other people pitch you. The other thing is, emphasize trust building, remember trust comes before the transaction. Too often, people who fail at raising capital or doing good deals, they just jump right to the transaction, and it makes it bumpy if it even happens. And finally, when incomplete information in your initial due diligence is there, just try looking for plot gaps to expose what might be missing. You do these things, and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller 
Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know. Our guests even better, and make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.