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How to Convince Investors

paulgraham.com

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Re: How to Convince Investors

#111

Post by chollida1 »

theorique wrote: post #52
keiferski wrote: post #30

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.

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…

> Thing is, past the first N years of your career, your CV / resume doesn't (or shouldn't) matter much.

I completely agree with this.

I remember one of the most shocking things one of my professors said was "If you're sending out a resume past the age of 30, you've done something wrong."

This might seem a bit arrogant but I think his point that at some point your achievements and network should be sufficient to stand alone.

Re: How to Convince Investors

#112

Post by RogerL »

rustynails wrote: post #110
RogerL wrote: post #69

Earlier quoted context omitted.

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.

I would like evidence for that statement. Because I have heard many Hollywood stars just exude insecurities. Heck, we talk about it all the time, and it even has a name "imposters syndrome". If you can achieve great things while feeling like an imposter, I would say that is an unanswerable rebuttal to the claim that confidence is a a pre-requisite.

Re: How to Convince Investors

#113

Post by Geekette »

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…

@RogerL "Hollywood is filled with people trying to act like they are a great star. Almost none of them are, nor will they ever be one."

You're skipping over important nuance: Assuming star = bundle of confident, recognized talent that brings values to any endeavour he/she is involved in, radiates this (vs "shouting") in person.

In contrast, Hollywood is filled with many people not acting like they're great stars, but projecting the peripheral benefits of being a great star (ie high visibility, rich lifestyle, entourages, etc) but they do not feel/act like stars at their cores.

Re: How to Convince Investors

#114

Post by wtvanhest »

jasonkolb wrote: post #85
tptacek wrote: post #72

Earlier quoted context omitted.

One way to take a stab at this is to try thinking about how much money you'll make for anyone else; your TAM will probably be some fraction of that number.

This seems like great advice if your customers are paying you directly. Do you think the same dynamics apply with advertising models or businesses that create a market in something? For example if I can cause someone to spend $50 and a product distributor makes $40 on that, can I justifiably charge say $20, or is the cap set by whatever Google charges for related keywords?

Hopefully you will see this. I went and looked at your site: http://www.applieddatalabs.com/ and tried to understand what you do.

It looks like you have a bunch of stuff going on all at once which is hard for investors to analyze and understand. It is important to break each invention/IP/idea in to separate concepts and analyze the market size of a niche market of each.

For your "cognitive data visualization and comprehension" IP you are working on, the key would be understanding a business type it could be sold to, then figuring out how much you would get.

Lets say you looked at the xBox One and Connect along with the PS4. Is there a way to license your technology to those two companies or maybe even game developers? If so, what do you think the licensing would get you per Xbox, PS4 or game?

You need to estimate two numbers: (# of units) and ($ per unit). Where the unit could be consoles or titles etc.

Anyway, hope that helps a little. Feel free to email me, same name at gmail.

Re: How to Convince Investors

#115

Post by wtvanhest »

hclose wrote: post #92

Neophyte question: Why do investors have to ask founders who else is investing? Is it not possible for them to check this themselves, via public records? [There are some sites that even pre-package the SEC filings for consumption by journalists, etc.] It makes perfect sense to me why investors would want to know who else is investing, for a number of reasons. For one, standing on the sidelines knowing that most start…

The way VC and angel rounds work, is in rounds...

Each round has investors commit and before they close, some investors may ask who else is investing. Most closed rounds on really early stage companies are hard/impossible to find, but all pre-closed rounds are impossible to find since there is no record of something that hasn't happened yet.

Re: How to Convince Investors

#116

Post by beat »

patrickk wrote: post #54
wellboy wrote: post #42

Earlier quoted context omitted.

It's insane, because if you invest in a startup with decent traction you don't have your 100x big hit anymore, because you invest in a valuation at say $4M. Instead, if you had spotted the startup's potential pre-traction, maybe just 1 or 2 months before it gained traction, you could have invested half the amount at a $2M val. And this ability,ladies and gentlemen, to spot a startup 1-2 months pre-traction, makes the…

Nice explanation. It might be worth it for the VC to wait and see, then overpay, because 1 or 2 months could be a significant percentage of a young companies' total life. They are overpaying for the extra data points and insight, in effect.

Which leads to a problem pg has pointed out elsewhere... VCs dragging their feet on potential investments, waiting for more data. This steals bandwidth from the founders that could be used to build the company.

Re: How to Convince Investors

#118

Post by hclose »

wtvanhest wrote: post #115
hclose wrote: post #92

Neophyte question: Why do investors have to ask founders who else is investing? Is it not possible for them to check this themselves, via public records? [There are some sites that even pre-package the SEC filings for consumption by journalists, etc.] It makes perfect sense to me why investors would want to know who else is investing, for a number of reasons. For one, standing on the sidelines knowing that most start…

The way VC and angel rounds work, is in rounds... Each round has investors commit and before they close, some investors may ask who else is investing. Most closed rounds on really early stage companies are hard/impossible to find, but all pre-closed rounds are impossible to find since there is no record of something that hasn't happened yet.

Here's one website I was thinking of: http://formds.com

Is the information disclosed in Form D's severely limited or useless for determining who is being funded and who is funding them? If yes, then what is the purpose of this website?

Re: How to Convince Investors

#119

Post by dredmorbius »

jacques_chester wrote: post #105
dredmorbius wrote: post #104

Earlier quoted context omitted.

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.

It's a sign of sloppiness, lack of attention to detail, and a fundamental lack of interest in facts.

If the issue is sufficiently allegorical, I'm reasonably OK with letting it slide, but increasingly this is a sign that there are much deeper flaws in a piece, and it's time to shift my limited attention elsewhere.

E.g., "weight loss" stories in the popular press (in my case most often on NPR or The New York Times) which fail to distinguish adipose tissue from skeletal muscle, or address the role of strength training in both body recomposition and fitness. Both Gina Kolada and Gretchen Reynolds have particularly caught my attention in this regard.

Or this stunning display of cavalier disregard for facts from The Economist: http://www.economist.com/news/leaders/21582516-worlds-thirst...

Notice in particular: dismissal of the opposing argument is limited to unnamed "several theorists, who have since gone strangely quiet". ORLY?

Not that The Economist hasn't (editorially at least) been notoriously and conspicuously cornucopian.

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