31–40 of 74 posts
Earlier quoted context omitted.
One small problem: co-founders make you stronger. You are your own single point of failure. For many customers that makes you a no-go zone.
Cofounders with good relationship > sole founder >> cofounders with poor relationship or other issues.
I totally misread the graphs. Sorry Danielle!
Except: "Bear in mind that the total dollar amount of money flowing into seed deals barely declined". That is a questionable definition of "popping" a bubble. The article does go on to admit that it's just selectively illustrating the number of deals, not the amount invested in seed deals, which is actually still the same in aggregate, and then wishy-washily says it's up to you to interpret this yourself etc. But sin…
We definitely found this out the hard way. We tried to raise $750K for a seed round and were repeatedly told that our tech/team were great but that we didn't have enough traction. It's kinda hard watching people go on about the "bubble" when you're just out there trying to scrap it out and find something that works.
YC offers 20k+ for a few percent. Startup Chile is 40k with a co-investment of around 10k. That money is supposed to support the founders for a few months while they get the prototype out the door and build traction. In comparison, 750k is a metric ton of cash, and should be enough to support a founding team for several years. Not judging, but if you're positioning it as a seed round instead of Series A that may be p…
Until you start hiring. Then you can burn through that kind of money surprisingly fast. Talent is (rightly!) expensive. So unless your co-founders and you have all the skills you need to see your product out the door you could very well need multiple 100 Ks to get going. If you're doing anything hardware related or that needs certification or a hundred other things that you could spend your money on then you might find this is not as much as it seemed at first.
Not all start-ups are making simple web apps or mobile apps.
Doing a seed round for $300K is not much easier than $750K and will give you only half the return on your time invested.
At least at 750K you'll still be looking at a relatively abbreviated process rather than a full blown DD (which would burn up too large a chunk of the investment to make sense).
So bootstrappers are on the rise now?
This talk by DHH explains why I prefer to bootstrap a company: https://www.youtube.com/watch?feature=player_embedded&v=0CDX... The main point being, that if you start off by selling a product (rather than getting people to sign up for a free product and then monetizing later) and can get a fraction of the people to sign up then you are in profit. Further, if you own 100% of the company, you are profitable much faster…
Can you explain how 100% ownership translates into earlier profitability?
I totally misread the graphs. Sorry Danielle!
Did I see the same chart you did? I went back and looked, all I saw was "Q1" and "Q3" labels while the data showed all four quarters, but only half were labelled. It /was/ missing a Q4 though at the end.
All the quarters from Q1 2005 through Q4 2014 were plotted. The axis labels do not show all of them due to space constraints. Apologies that this was confusing, I will make sure to add all the tick marks and labels in the future.
Interesting graph. The "bubble" goes parabolic right in 2009, as the financial system is awash in QE money, searching for yield. Almost textbook.
QE has nothing to do with VC
Fed demand for Investment Bonds increases the price of Investment Bonds. When the price of Investment Bonds increases, the demand for other investments increases.
Textbook Econ 101, as the parent comment noted.
Most professional investors are sheep. The number and scale of opportunities in technology is growing incredibly and they're not all doubling down. It's been almost 10 years and no one has launched a credible competitor to YC. That's proof of how incredibly weak the industry is. Where investors are afraid, consumers aren't the least bit deterred. They don't talk of bubbles. They want cool new stuff that makes their l…
Both crowdfunding and VCs fund a tiny portion of the total small businesses started.
Did you see those charts? The scale is in hundreds.
In the US alone there are millions of small businesses started each year. Sure, most of those aren't trying to change the world (haven't seen statistics on that)... but even if it's 0.5% and you exclude all the solo founders, it would still far out number crowdfunding and VCs by a large margin.
Earlier quoted context omitted.
One small problem: co-founders make you stronger. You are your own single point of failure. For many customers that makes you a no-go zone.
As a solo-founder, I've never run into a customer that cared how many people were involved in my company. Once you get to the point that things look professional, most just assume you aren't running the company out of your apartment. Maybe this matters more for sales-intensive B2B startups though.