A startup founder who has raised over $100 million says venture capitalists can ‘sniff out’ if you’re starting a business just to get rich

• GroupMe founder and Splice CEO Steve Martocci has raised hundreds of millions of dollars in capital for his startups.
• The fundraising success taught Martocci that venture capitalists know when an entrepreneur truly believes in the company's mission, or if they are just looking to make money, he told Business Insider.
• Visit Business Insider's homepage for more stories.

Steve Martocci knows a thing or two about raising money.

Martocci and his cofounder raised $11.5 million for text-messaging app GroupMe before selling to Skype for $85 million. Splice, a music-creation platform that Martocci currently runs, raised $57.5 million in a Series C funding round earlier this year, bringing the total investment to $107 million.

His private-plane service, Blade, scored $38 million in its Series B round in 2018.

Read more: The cofounder of GroupMe was 27 when the text-messaging platform sold for $85 million just a year after launch. Now, he's raised $107 million for a music startup that could make him even more successful. Here are his lessons for pitching, leading, and building a company.

Martocci said part of the secret to his fundraising success is truly believing in all his ventures. When asked how soon entrepreneurs should think about selling a company, Martocci said thinking only about money could be a recipe for disaster. 

If an entrepreneur is just in it for the money, venture capitalists will catch on, Martocci told Business Insider reporter Shana Lebowitz. 

Martocci said he aims to build Splice into the most "iconic" company in music history. As both someone who raises funds and angel-invests, Martocci said venture capitalists are turned off by a creator whose primary aim is to sell the company.

"If you're doing venture to be like, 'Oh, I can sell this for a few million bucks,' you're going in wrong," Martocci told Business Insider. "They'll sniff it out."

Even though Martocci wasn't just building Splice for the money, he still faced other challenges, like proving to VCs the existence of a market.

"Market is the hardest thing to convince VCs on," Martocci said. "I think we have some of the best market data about this space, but if you have to convince someone about a market [and] your plan, you are in an uphill battle." 

Read Steve Martocci's full interview with Business Insider about his lessons for pitching, leading, and building a company.

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