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At that stage, if your business plan or balance sheet is solid, you don't need funding, or you aren't a tech/growth startup.
So basically it's all fluff as he mentioned it in a later tweet.
I have never read a business plan or balance sheet
151–160 of 346 posts
Re: I have never read a business plan or balance sheet
#152He later goes on to claim he's "never read a pitch deck". https://twitter.com/paulg/status/1492696791434731529?s=20&t=... What an eye roll.
Maybe he’s read one for Viaweb or to help someone pitch? But I believe it in the context of PG as an investor, similar to how Warren Buffett could say he’s “never read” an investment banker’s report.
Re: I have never read a business plan or balance sheet
#153Earlier quoted context omitted.
Ummm...in order to know what the company looks like after the investment, you need to know what the company looks like before the investment.
Please don’t start comments in that patronizing way. This field is highly counterintuitive. It’s easy to feel smart by parroting the obvious-seeming positions whilst being utterly wrong. To your point: when YC interviews companies, they are mostly very early stage and pre-revenue. What YC cares about is how much money they could make if everything goes right, and whether the team is capable of making everything go (c…
> What YC cares about is how much money they could make is everything goes right, and whether the team is capable of making everything go (close enough to) right over the long term.
Isn't that what a business plan is? In some sense, it's a description of what your cash flow looks like in a couple of years.
Re: I have never read a business plan or balance sheet
#154It's like this guy is out to prove to everyone that he's an idiot. Which is honestly pretty convenient since it means a lot more coming from him.
Re: I have never read a business plan or balance sheet
#155Earlier quoted context omitted.
"Literally everyone knows that those things don't matter for super early stage startups." If literally everyone knows that then I don't need to be commenting, as my replies in this subthread are to someone insisting that balance sheets matter even before a company has a working product. Clearly they don't. It seems the people "reacting" are imagining some deeper intention or elaborate plot or some complicated charact…
Yes, the "character weakness" is a penchant for midwit /r/iamverysmart takes that are well below people's usual expectations. Surely we can agree the reaction is overblown, but as someone said, this is definitely eyeroll material.
I think perhaps the thing with PG is that people think the advice/wisdom he shares should be far more profound and complicated than it is.
As someone who has frequently made the mistake of overcomplicating things, I don't see anything wrong with repeatedly telling early stage founders, in all kinds of different ways, to just focus on building a product that people want.
Re: I have never read a business plan or balance sheet
#156Earlier quoted context omitted.
I founded a company without a business plan. Raised money without a business plan. Ran the business profitably for a long time and then sold the majority of it without a business plan. I don’t see the value in a formal business plan at all and so I would almost agree with your made up quote there. I mean obviously you need to have a plan for your business. But writing it down in some formal way seems like a waste of…
I found the process of writing a business plan to be a useful one. It’s really just a list of questions to ask yourself - who are the customers? What is the product? How will you sell it? etc. The plan itself was short enough that I could share it with a fee people for advice but I never showed it to any of my investors, other than perhaps as a way to give a pre-canned snippet of information on a specific thing. The…
Plans are not for reading but for writing. When you write stuff down you think about it = you plan. For others it should be enough that they know you made a plan. Unless they think they can deduce if it's a good one by reading it.
Re: I have never read a business plan or balance sheet
#157Re: I have never read a business plan or balance sheet
#158Earlier quoted context omitted.
Do you mind giving more details?
Not something I’m going to dig into, sorry. People have every right to block others, without giving any explanation and I support that side of it completely. It stood out from my pov because there’s very very few times I’ve noticed I’m blocked and I don’t generally mean to cause any offence. The most I would’ve been intending to cause was a little introspection.
Then why did you bring this up?
Re: I have never read a business plan or balance sheet
#159Seems like a lot of people are missing the point of this one.
PG/YC invest at the earliest stages. The information they need is pretty much:
1. What are you doing?
2. Do people like it?
3. How big is the market?
4. What are you/team like?
Could you cover all of those in a formal business plan? Sure, but you can also do so in a short-form application that's 1/20 the length or in a 10-minute back-and-forth conversation.
You don't have to ever view formal documents or financials to do that.
That is PG's broader point, and isn't really that controversial IMO.
Re: I have never read a business plan or balance sheet
#160Earlier quoted context omitted.
Ok, you don’t need a business plan. But no balance sheet? You can’t file your taxes without a balance sheet. How can you run anything larger than a mom-and-pop business without ever seeing a balance sheet?
pg saying he doesn't need to see your balance sheet isn't the same as saying no one needs to see your balance sheet.
But this is not what he said. If he said that, it would have been reasonable. Instead he claims to have never read a balance sheet, which doesn't seem likely, and even if it was true, it would not be very smart. Why avoid them until you read them and formed your own opinion?
Saying "I don't read those documents anymore" would have made sense too.