Absolutely mind blowing! You've made my day. Your quotes are plastered over our white boards. Keep sharing your wisdom. We need to read more articles like this.
A Fundraising Survival Guide
81–90 of 98 posts
Re: A Fundraising Survival Guide
#82Interesting strategy on how much money to ask for. He says:
“We advise startups to tell investors there are several different routes they could take depending on how much they raised. As little as $50k could pay for food and rent for the founders for a year. A couple hundred thousand would let them get office space and hire some smart people they know from school. A couple million would let them really blow this thing out. The message (and not just the message, but the fact) should be: we’re going to succeed no matter what. Raising more money just lets us do it faster.”
The challenge here is having several funding plans up your sleeve that show different growth rates and also stack up together. To be credible, the plans should show that if an investor puts less money in, the business will not grow as fast and will also have a lower chance of success. The key is putting the lower growth scenario together without putting the investor off and at the same time not making the larger investment easy to pass on because the lower growth scenario looks like a good investment. Why put more money in at the highest risk point when the start up can show good progress with a lower investment?
For me, the difficulty here is that I know if we have less money the chances of our success are greatly reduced. The reason for this is you don’t know what you don’t know and more money allows you to find out, flex your plans and find a successful strategy. Credibly telling an investor that if they give you less money, you are still equally confident of success albeit on a smaller scale, is a challenging balancing act.
Re: A Fundraising Survival Guide
#83A fabulous article! As someone who has raised $11.5 million from 148 angel investors (including this week's raise where $2.5M came together in a single night), I can attest to the truth of every word here.
Re: A Fundraising Survival Guide
#84A fabulous article! As someone who has raised $11.5 million from 148 angel investors (including this week's raise where $2.5M came together in a single night), I can attest to the truth of every word here.
Gosh, send me your links on everlatty@yahoo.com!
Re: A Fundraising Survival Guide
#85Interesting strategy on how much money to ask for. He says: “We advise startups to tell investors there are several different routes they could take depending on how much they raised. As little as $50k could pay for food and rent for the founders for a year. A couple hundred thousand would let them get office space and hire some smart people they know from school. A couple million would let them really blow this thin…
Look,one model can take care of different growth/funding scenarios, no need for laborious replications. I spent a pretty amount of hours building both my solutions and product financial model (really, my forte). Just frustrating attracting angel investors to such a business model that has proven (competitively) to generate lots of revenue. Being on the finance side, I tend to have a disdain for middle tier VCs. Sorry for some of the angels who don't understand, that's more acceptable. But VCs, many don't know what they want: liquidity or high market valuation.
I hope my first points answer your thesis: "The challenge here is having several funding plans up your sleeve that show different growth rates and also stack up together."
Re: A Fundraising Survival Guide
#86I have read it.
I also watched Sam Altman.
I would never think it will come to this!
This iPhone "thing" is the greatest invigilation system ever created.
I saw communism first hand, I saw people prosecuted.
This is much worse.
... and guess what, we all LOVE IT !!!
... unbelievable !
Re: A Fundraising Survival Guide
#87A fabulous article! As someone who has raised $11.5 million from 148 angel investors (including this week's raise where $2.5M came together in a single night), I can attest to the truth of every word here.
Wow!!! All from angels. Can you post the link to your company here? I would love to know more. Thanks.
Re: A Fundraising Survival Guide
#88As someone who worked for investors (and VC wana be's), I really like this quote:
\" Though a rejection doesn't necessarily tell you anything about your startup, it does suggest your pitch could be improved. Figure out what's not working and change it. Don't just think "investors are stupid." Often they are, but figure out precisely where you lose them. \"
Regarding novice investors, sophisticated invesotors sometimes bring a lot more to the table than just money. Or at least they are not going to make life difficult later on. The caveate is they are not easy to get to. All the best E
Re: A Fundraising Survival Guide
#89As a lawyer, I laughed and laughed about the lawyer not being able to admit "he'd screwed up". It's such a common problem and start-up founders are well advised to carefully vet not only their own advisors but also the VC's or Angel's ones. The truth is that many, many advisors are inexperienced (no one knows all of the answers in a world where human knowledge doubles every few years) but it is the advisor's failure to admit a lack of experience or knowledge which is potentially fatal to YOU.
Congratulations on the great article, Graham. I've read tones of this sort of stuff over the years and I believe that your article is the closest to an honest, sensible guide to fundraising I've ever seen. It should be mandatory reading for all would-be startup founders.
Please, please keep up the good work!
Re: A Fundraising Survival Guide
#90[3] One VC who read this essay wrote: "We try to avoid companies that got bootstrapped with consulting. It creates very bad behaviors/instincts that are hard to erase from a company’s culture." What are those?
I found this comment pretty odd. We HAVE to bootstrap/do consulting just to GET STARTED already! Doing consulting gigs requires us to stay current and in the loop and helps us learn to deal with customers. Staying in the corporate world didn't grant the flexibility we needed. But, yes, client work can be very distracting and takes up a lot of time. But hey, we have to SURVIVE.