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How to Convince Investors

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Re: How to Convince Investors

#101

Post by hef19898 »

GFischer wrote: post #65
theorique wrote: post #52

Earlier quoted context omitted.

I feel like this may be a tech-centric phenomenon, unfortunately. In a lot of industries, omitting the right keyword from your CV will exclude you from interviews. Thing is, past the first N years of your career, your CV / resume doesn't (or shouldn't) matter much. Ideally, you are connected to important people in your industry, who know what your work (or portfolio) is, and what you are best suited to do. In such a…

"Ideally, you are connected to important people in your industry" That's why being suckered into backend positions with little or no contact with customers or other parts of a company is often not a good idea, even if the pay is good and the tech interesting. Doing postgraduate studies, participating in events, speaking, all of those are very important, yet, at least in my case, I only learned about those relatively…

Completely second this.And office politics are a nasty thing. One day you are the king pin at it, the next day some restructuring a new boss or a only a little slip in a project and you can be dead in the water. And yes, big companies tend to be more prone to be like that.

EDIT: And after that happened you may just realize that all you can show is some experience in office politics. By trying to sell that in the next interview you just turn into the next CV optimizer. Kind of a vicious cycle.

Re: How to Convince Investors

#102

Post by lmm »

larrys wrote: post #48
salimmadjd wrote: post #47

That's the secret. Convince yourself that your startup is worth investing in, and then when you explain this to investors they'll believe you. This is one of the best advice for both fund-raising or anything else in life and it's basically the same strategy Arnold Schwarzenegger used to become the "number one star" in hollywood [1] as explained by Steve Chandler: * ...Then I asked just how he planned to become Hollyw…

Similar also to "the method" in acting: http://en.wikipedia.org/wiki/Method_acting I use this in negotiation as well. You convince yourself that you are playing a role and do what is consistent with the role you are playing. You are an actor. Takes quite a bit of practice.

Isn't that backwards? The whole point of the method is that you break down the distinction between you and the role, and become the character - you're explicitly not thinking about being an actor.

Re: How to Convince Investors

#103

Post by cynusx »

kyro wrote: post #73
wellboy wrote: post #17

The only thing you need is traction. Anything else doesn't matter. It seems insane, but investors are blinded by traction. If you are a startup that has low scalability, but you have traction, you will get funding If you are insanely scalable, a great idea, but you don't have traction, you just won't get funding. It doesn't matter how awesome your team is. Investors just can't see good ideas through the traction curt…

Is the traction you're referring to here the type limited to web startups or (if anyone else knows) does this hold true for virtually any startup in any industry? I imagine there are a handful of industries where achieving 'traction' may take several years, eg biomed.

Traction is the most important for web startups because technology is not the limiting factor. There are a lot of teams out there that can build whatever. The problem is mostly reduced to market-risk. Traction is a big signal that market risks are mitigated even when that may not entirely be true.

Biomed startups have mostly technology risks, the problems are well-known and there is a very defined (and heavily regulated) goto market process. As the comment above mentions, the thing that gets investors excited in biomed startups is mitigation of the technology risk.

Re: How to Convince Investors

#104

Post by dredmorbius »

jacques_chester wrote: post #91

> When people hurt themselves lifting heavy things, it's usually because they try to lift with their back. It's got more to do with a weak back, actually. Folk with strong backs can lift very heavy weights safely. In terms of the analogy, I dunno what I'm saying. Just fulfilling my HN nitpick quota.

That and rounding the spine rather than maintaining an arch.

Though the back musculature is sufficiently complex that a mis-firing can make for a bad week even if you're just picking up a bar of soap.

Yeah, I cringe when I see obvious-but-sadly-erronious out-of-scope analogies being made. Particularly if I happen to have some idea of the subject area in which the analogy is being drawn. Sort of detracts from the whole message.

Re: How to Convince Investors

#105

Post by jacques_chester »

dredmorbius wrote: post #104
jacques_chester wrote: post #91

> When people hurt themselves lifting heavy things, it's usually because they try to lift with their back. It's got more to do with a weak back, actually. Folk with strong backs can lift very heavy weights safely. In terms of the analogy, I dunno what I'm saying. Just fulfilling my HN nitpick quota.

That and rounding the spine rather than maintaining an arch. Though the back musculature is sufficiently complex that a mis-firing can make for a bad week even if you're just picking up a bar of soap. Yeah, I cringe when I see obvious-but-sadly-erronious out-of-scope analogies being made. Particularly if I happen to have some idea of the subject area in which the analogy is being drawn. Sort of detracts from the whol…

These days I just let it slide. It's like being annoyed by inaccuracies in movies. Everyone's annoyed by something.

Re: How to Convince Investors

#106

Post by csomar »

keiferski wrote: post #30
michael_nielsen wrote: post #22

"Inexperienced founders... try to convince with their pitch. Most would be better off if they let their startup do the work—if they started by understanding why their startup is worth investing in, then simply explained this well to investors." This advice applies to many things in life -- getting a job, proposing marriage, networking in general. For instance, I've occasionally met people who obsess about crafting th…

I feel like this may be a tech-centric phenomenon, unfortunately. In a lot of industries, omitting the right keyword from your CV will exclude you from interviews.

I think you are talking about the average Joe. The Parent Poster is talking about industry elites. Not everyone does awesome work that get word-of-mouth. This applies to any field (tech-centric, medical, accounting or what-ever).

Re: How to Convince Investors

#107

Post by vog »

As a side note, I think the website "paulgraham.com" demonstrates an anti-pattern: It is available with and without "www." prefix, thus splitting the HN comments into two parts:

https://news.ycombinator.com/item?id=6175417 (paulgraham.com, i.e. this one)

https://news.ycombinator.com/item?id=6178042 (www.paulgraham.com)

The solution is simple: Establish an HTTP redirect from "www.paulgraham.com" to "paulgraham.com" or vice versa.

Re: How to Convince Investors

#108

Post by emhart »

michael_nielsen wrote: post #40

"But while Microsoft did really well and there is thus a temptation to think they would have seemed a great bet a few months in, they probably didn't. Good, but not great. No company, however successful, ever looks more than a pretty good bet a few months in." As an example, Bessemer Venture Partners passed on investing in Apple, Google, Intel, eBay, FedEx, and many other big companies. Their "anti-portfolio" makes a…

What a phenomenal bit of copy from a VC company as well. This paragraph in particular:

Our reasons for passing on these investments varied. In some cases, we were making a conscious act of generosity to another, younger venture firm, down on their luck, who we felt could really use a billion dollars in gains. In other cases, our partners had already run out of spaces on the year's Schedule D and feared that another entry would require them to attach a separate sheet.

had me laughing aloud as it completely took me by surprise. Thanks for the link!

Re: How to Convince Investors

#109

Post by EGreg »

I have found the binary thing to be true with west coast investors (especially in San Fran). Here in NYC, many angel investors think in terms of "when will I start getting returns on my money", and not "will this be the next big hit"? Catering to both types is often impossible, you have to pick one to go after.

Re: How to Convince Investors

#110

Post by rustynails »

RogerL wrote: post #69
salimmadjd wrote: post #47

That's the secret. Convince yourself that your startup is worth investing in, and then when you explain this to investors they'll believe you. This is one of the best advice for both fund-raising or anything else in life and it's basically the same strategy Arnold Schwarzenegger used to become the "number one star" in hollywood [1] as explained by Steve Chandler: * ...Then I asked just how he planned to become Hollyw…

I don't quite buy it. We may just be seeing selection bias How many thousands do that and fail miserably? We never hear about it. How many luck into things? We hear about them, but don't then discount Arnold's story by some Bayesian amount of doubt. And how many get completely burned by trying to live as if they are something they are not, and get ostracized as a result? Hollywood is filled with people trying to act…

The way I'd look at it is that focus and confidence is a pre-requisite, not a guarantee. Arnie was right.
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