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How to Raise Money
11–20 of 125 posts
Re: How to Raise Money
#12Incidentally, this is the actual advice we give startups about fundraising at YC. This batch I finally wrote it all down, and the s2013 startups used it when raising money.
The thanks to Moriarty is a nice touch pg.
It's a real person. We actually had a Professor Moriarty in the last batch: http://techcrunch.com/2013/08/05/y-combinator-startup-7-cups...
Re: How to Raise Money
#13This is interesting and contradicts a bit of "disrupt" meme: "You can't trust your intuitions. I'm going to give you a set of rules here that will get you through this process if anything will. At certain moments you'll be tempted to ignore them. So rule number zero is: these rules exist for a reason. You wouldn't need a rule to keep you going in one direction if there weren't powerful forces pushing you in another."…
Your intuitions != what older more experience people say pg and YC has more qualified investing experience than probably any other "experienced person" you could talk to. When you are doing a startup, it's generally a good idea to focus on innovating in your core area of expertise - which would be some combination of product/market/technology - and take the best practices of all the other areas, like financing.
Re-read what I said.
I'm not talking about what PG or YC recommends with regards to investing.
I'm talking about the general idea that if anyone else said something like this and asked for blanket trust:
"you can't trust your intuition....rule number zero is: these rules exist for a reason"
Well those other people of course can't be trusted like PG and what they say doesn't matter as much. So if a person with 30 years in the taxi industry said to you "trust me these things are for a reason" and you saw he was as accomplished in what he did as PG would you just "trust him" or would you dig a little deeper?
Interesting but expected that I would get downvoted for stating an opinion on something I said "what this seems to be saying". In a classroom would a teacher takes points off for stating a thought like that?
Quite frankly I don't know why it's so necessary to walk on eggshells when stating a thought that seems to question what PG may say.
Much of "disrupt" goes against a pattern of previously accepted behavior that others have questioned.
Re: How to Raise Money
#14Great article.
"might me" => "might be"
Re: How to Raise Money
#15Incidentally, this is the actual advice we give startups about fundraising at YC. This batch I finally wrote it all down, and the s2013 startups used it when raising money.
"I don't know of a single VC investment that began with an associate cold-emailing a startup."
I can vouch from personal knowledge that this has happened a number of times at a number of different European VCs, and at least once with a major US VC in the last year.
I'm guessing it's far less common for YC startups because YC startups have demo day which essentially initiates the process. They also have a strong network because of YC so it's much easier for a VC to get a warm intro to any YC startup.
It may just be a Europe vs US thing but I'd be surprised if it didn't happen frequently in the US as well especially at less well connected startups.
Certainly referrals have significant value but most major VCs will be able to use their network to get references on pretty much any startup in any case.
Re: How to Raise Money
#16You'll notice a common theme in this (excellent) piece: it's for startups that have some reason to believe they can actually raise a bunch of money. Startups who have either sufficient demonstrable talent behind them, are growing in some interesting way, or some other form of validation.
If you can't find some confidence that you're in that group, find a way to delay fundraising: keep your job, do consulting, work on alternate revenue streams, whatever, because fundraising when you're no in the group the bulk of this article applies to - trying to fundraise is hell. Not just hell like "it's really, really hard and frustrating" but hell like you could actually lose yourself in it, like you could actually get destroyed by it.
Re: How to Raise Money
#17Paul Graham on dating:
s/investors/women/ && s/investor/woman/
(works the other way too)
When you talk to women your m.o. should be breadth-first search, weighted by expected value. You should always talk to women in parallel rather than serially. You can't afford the time it takes to talk to women serially, plus if you only talk to one woman at a time, they don't have the pressure of other women to make them act. But you shouldn't pay the same attention to every woman, because some are more promising prospects than others. The optimal solution is to talk to all potential women in parallel, but give higher priority to the more promising ones.
Re: How to Raise Money
#18For years I've been toying with making a start-up board game. This essay could easily serve as the basis for that. Slight disagree with the line: "For example, if a reputable investor is willing to invest on a convertible note, using standard paperwork, that is either uncapped or capped at a good valuation, you can take that without having to think." A good valuation means you're going to have to think anyway and if…
Just to add a common misunderstanding - a convertible note is debt and raising capital is equity. Debt means you owe something (in this cause equity at a later time), and equity means you own something. I know this is probably "Fundraising 101" but often its the basics that people get wrong.
Re: How to Raise Money
#19Paul Graham on dating: s/investors/women/ && s/investor/woman/ (works the other way too) When you talk to women your m.o. should be breadth-first search, weighted by expected value. You should always talk to women in parallel rather than serially. You can't afford the time it takes to talk to women serially, plus if you only talk to one woman at a time, they don't have the pressure of other women to make them act. Bu…
I posted this on my fb.. Let hell break loose, thx. :P
Re: How to Raise Money
#20Paul Graham on dating: s/investors/women/ && s/investor/woman/ (works the other way too) When you talk to women your m.o. should be breadth-first search, weighted by expected value. You should always talk to women in parallel rather than serially. You can't afford the time it takes to talk to women serially, plus if you only talk to one woman at a time, they don't have the pressure of other women to make them act. Bu…
The analogy to dating is problematic. Such a strategy is indeed effective for dating, but feels mercenary or even sociopathic to most people. Making the analogy raises moral issues that aren't relevant to fundraising.