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Ask HN: How to raise a seed round in a down market?
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Re: Ask HN: How to raise a seed round in a down market?
#12Unless your team is made up of serial entrepreneurs with one or more successful exits, then the only thing that really matters is customer metrics: usage, revenue, and rate of growth.
And as a corollary: if you have those, and the company is investable, it follows that what changes in a "down" market is the valuation.
The change is dramatic and fast though, and minds take a beat to catch up to the market.
Re: Ask HN: How to raise a seed round in a down market?
#13Be or have a co-founder with: - an affiliation with an ivy league school - a prior notable technology or business contribution, such as authoring a protocol (or more recently an open source project) - some unusual circumstance such as family relationships that causes VC partners to care more about them than a random person - be obviously independently wealthy already - have been a founder or high level employee invol…
the advice nobody wants to hear but is actually true. ofc you also need to be highly competent yourself, but that is table stakes
Re: Ask HN: How to raise a seed round in a down market?
#14Be or have a co-founder with: - an affiliation with an ivy league school - a prior notable technology or business contribution, such as authoring a protocol (or more recently an open source project) - some unusual circumstance such as family relationships that causes VC partners to care more about them than a random person - be obviously independently wealthy already - have been a founder or high level employee invol…
Long story short, nothing to do with your actual business or business model or innovative technology or hand-wavy "disruption" or large addressable market size or traction or any of the other things that VCs tell the plebs matter, when in reality they only matter if you don't have anything more valuable like the above. This is how companies raise ludicrous amounts of money without ever finding product-market fit, because of the Ivy league / family / prior possibly irrelevant past history matters more.
Re: Ask HN: How to raise a seed round in a down market?
#15Look up JOBS act (https://www.sec.gov/spotlight/jobs-act.shtml)
With a strong business plan, this could be a viable and great starting point.
Good luck!
Re: Ask HN: How to raise a seed round in a down market?
#16If you hurry up maybe you can manage to raise in a non-down market.
The best thing you can do is to speed up raising operations and also target new funds with lots of enthusiasm still. It's the same phenomenon everywhere, only the very elite people and entities can afford to sit out and not play, if you are a new VC fund you have to play even in a bear market, matter of fact it's an opportunity because the bear is reducing competition downstream as the bigger and elite funds sit this one out because their priority is survival not swinging at the fences.
Re: Ask HN: How to raise a seed round in a down market?
#17Either you have a product that customers clearly love and are willing to spend money on, or you yourself (and your team) are very impressive people in some way. The investor is ideally betting on both an impressive company && an impressive team, but at the very least one of those needs to be true to have a shot.
Re: Ask HN: How to raise a seed round in a down market?
#18Another answer which you might not like: instead of focusing on raising, build a strong product offering or major feature enhancement that fills a hole for another established company looking to jump a few spots on Gartner's Magic Quadrant and get acquired or sell the IP for a quick win and save yourself some major headaches.
Even in down economies the appetite for M&A is still strong.
Re: Ask HN: How to raise a seed round in a down market?
#19Not sure I understand, now is the best time to buy. If you're going to find a cheap hidden gem, it's now. Not when you're having to fight with hundreds of other investors all bidding on the next Facebook.
Re: Ask HN: How to raise a seed round in a down market?
#20Do the work.
Do consultancy. Become excellent. Build a team. Bootstrap your entire development phase. Sell enough to demonstrate the market