How to Convince Investors
paulgraham.com
How to Convince Investors
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Re: How to Convince Investors
#2I wrote something similar today, only I called it "When the Sh-t Hits the Fan with Your Startup": http://www.erica.biz/2013/startup/
In the post, I wrote: I firmly believe no outside problem (running out of money; struggling to pay bills) can’t be fixed by looking inside yourself and becoming a better, stronger person.
That may sound sort of cheesy and "self-help-y", but for me it was transformative. I had to have internal confidence before I could project confidence externally. In order to have that internal confidence, for me, it involved rethinking absolutely everything about our startup, from our name to our customer demographic to our value proposition. (I go into detail on what happened and how we re-thought our startup in my blog post.)
Once I rethought everything, I found a deep well of internal confidence, and we went from "teetering on the brink" to raising another $175,000 from outside seed investors quickly (some of whom had been sitting on the fence for months), and then applying to and getting into Techstars' first Austin class as well.
External problems like lack of money or investors saying "no" are often reflections of your own internal doubts or lack of confidence. As PG said, it's not fixed by bravado, but by going deep inside yourself and rethinking your assumptions. Why are you doing this? Of all the things you could be doing, is this the #1 thing that drives you every single day of your life?
Once you fix your internal issues, the external issues resolve themselves. However, this lesson may be something you have to experience to believe (as I did.)
Re: How to Convince Investors
#3One of the biggest changes in my style as an entrepreneur from when I started WePay (4 years ago) to now is that I used to focus so much on "the sell" - but now I focus on the substance. It makes the selling far easier, and it makes it easier for your team to sell it as well.
Re: How to Convince Investors
#4I wrote something similar today, only I called it "When the Sh-t Hits the Fan with Your Startup": http://www.erica.biz/2013/startup/ In the post, I wrote: I firmly believe no outside problem (running out of money; struggling to pay bills) can’t be fixed by looking inside yourself and becoming a better, stronger person. That may sound sort of cheesy and "self-help-y", but for me it was transformative. I had to have in…
Please correct me if I am wrong but you're saying that I should try to identify low hanging fruits, right?
Re: How to Convince Investors
#5I <3 this essay. "Fake it 'til you make it" seems to be the m.o. in a lot of entrepreneurial circles. I've honestly never known if this is actually a good strategy or not. It seems the answer is no.
Re: How to Convince Investors
#6I <3 this essay. "Fake it 'til you make it" seems to be the m.o. in a lot of entrepreneurial circles. I've honestly never known if this is actually a good strategy or not. It seems the answer is no.
IMHO "fake it til you make it" is sometimes necessary and sometimes it produces quick wins - but if you let it distract you from building authentic value then it is a net negative in the long term.
Re: How to Convince Investors
#7> There are a handful of angels who'd be interested in a company with a high probability of being moderately successful.
Is YC in this camp or do you guys and gals try to stay in the huge success side of speculation?
Re: How to Convince Investors
#8I <3 this essay. "Fake it 'til you make it" seems to be the m.o. in a lot of entrepreneurial circles. I've honestly never known if this is actually a good strategy or not. It seems the answer is no.
IMHO "fake it til you make it" is sometimes necessary and sometimes it produces quick wins - but if you let it distract you from building authentic value then it is a net negative in the long term.
"Fake it 'till you make it" embeds the assumption that you are going to make it, which is a thing you need to constantly and actively work on doing.
Otherwise, it's just faking it.
Re: How to Convince Investors
#9> There are a handful of angels who'd be interested in a company with a high probability of being moderately successful. Is YC in this camp or do you guys and gals try to stay in the huge success side of speculation?
From the "Philosophy" section of ycombinator.com/about (the whole section is relevant really):
One concrete consequence is that Y Combinator funding lets you sell early, if you want to. It can sometimes make sense to sell yourself when you're small for a few million, rather than take more funding and roll the dice again. Google likes to do early-stage acquisitions, and we expect them to become increasingly common as other companies learn what Google has.
If you take a large amount of money from an investor, you usually give up this option. But we realize (having been there) that an early offer from an acquirer can be very tempting for a group of young hackers. So if you want to sell early, that's ok. We'd make more if you went for an IPO, but we're not going to force anyone to do anything they don't want to.
I think YC prefers big successes but doesn't try to pressure everyone to be the next Dropbox or AirBnB
Re: How to Convince Investors
#10I loved the wings metaphor but i found it still frustrating - pg is clearly an intelligent, observant person, at the heart of some of the best and brightest entrpreneurs globally. And yet we still cannot tell what makes a child grow into a twenty something whose wings can unfurl and a twenty something with raggedy stumps.
I hope that no one comes out of the "tube" of school and college without wings - but if that's true why do so few seem to fly?
What is it about those who fly that they learnt that others did not? Formidable-ness seems to simply be a tell for a good investor - not an explanation.
Please keep pushing them off cliffs - maybe we can work it out soon.