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How to Raise Investment

tomblomfield.com

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Re: How to Raise Investment

#31

Post by [deleted] »

dboreham wrote: post #23
asien wrote: post #13

To be very clear , this articles won’t help you much if you don’t fit the criteria’s the OP does. Having discussed with VC a long time ago , it was very HARD to raise money without a very strong traction. Very often VC were convinced with my pitch , and my product but would not invest either because they had stuff somewhat similar in their portfolio and often because I didn’t have a “track records” to proof my capabi…

Exactly. Remember also that VC are rich and powerful therefore much of what you read and think about investing and startups is written for their benefit. Avoid drinking the kool aid.

[deleted]

Re: How to Raise Investment

#32

Post by westoncb »

Can anyone comment on raising investment for software projects that might earn on the order of several million dollars but with no real potential to become 'unicorns'?

Where does someone look for smaller business ideas like this (which may have a higher probability of success, lower earning potential than typical startup targets, less initial capital required)?

Re: How to Raise Investment

#33

Post by baybal2 »

I want to ask, do people here understand a difference in between raising an investment, and soliciting voluntary participation in a pump, and dump scheme, which can sometimes, as a side effect, turn out a viable business?

Re: How to Raise Investment

#34

Post by sbierwagen »

smackeyacky wrote: post #28

This advice is interesting, but almost entirely useless for anybody outside the US / Silicon Valley bubble. Exactly how are you going to go for coffee with your "VC buddies" if you live 8,000km away? The idea is frankly ridiculous for anybody not in a tiny circle. edit: apparently London is the same. Only further away. This article really highlights how stupid frauds like Theranos get funded. The real answer is betwe…

VC funds give companies tens of millions of dollars. That's always going to be a high-touch in-person sales job.

A society where that can routinely be done remotely is certainly physically possible, but it would look very different from this world.

Re: How to Raise Investment

#35

Post by robocat »

tomblomfield wrote: post #4

Author here - happy to answer any questions

You said “It is considered bad form to share the contents of a termsheet with other investors” and “You do not want to be seen ‘shopping around’ your unsigned termsheet”.

The benefits to a founder of shopping around seem clear, so could you quantify the downside risks? Do the risks matter for a “hot deal”?

PS: Thank you so much for your awesome article: it is especially gratifying to see something that isn’t from the valley (I am in NZ).

Re: How to Raise Investment

#36

Post by satvikpendem »

0des wrote: post #18

On a sidenote, I'd be interested in reading an article exploring the inverse of this! How to -not- raise investment. Most people look at funding like "yeah well I mean that's just the thing you do" but it's not for all cases. Sometimes tossing gasoline on something is just enough to make it fizzle. I'm looking forward to the pendulum swinging back around to 2022, bring on the slow-biz startups, the organic growth, gi…

You might be interested in indie hacking or bootstrapping as phrases to google when looking for such articles.

www.indiehackers.com

www.bootstrappers.com

Re: How to Raise Investment

#37

Post by satvikpendem »

westoncb wrote: post #32

Can anyone comment on raising investment for software projects that might earn on the order of several million dollars but with no real potential to become 'unicorns'? Where does someone look for smaller business ideas like this (which may have a higher probability of success, lower earning potential than typical startup targets, less initial capital required)?

Check out micro VCs like Calm, TinySeed, etc. They operate on the model you describe, where they're not looking for 100x returns but merely several million dollars in revenue.

Re: How to Raise Investment

#38

Post by satvikpendem »

smackeyacky wrote: post #28

This advice is interesting, but almost entirely useless for anybody outside the US / Silicon Valley bubble. Exactly how are you going to go for coffee with your "VC buddies" if you live 8,000km away? The idea is frankly ridiculous for anybody not in a tiny circle. edit: apparently London is the same. Only further away. This article really highlights how stupid frauds like Theranos get funded. The real answer is betwe…

Well if you're the one seeking money, you need to go where the money is, no? You can't stay where you are with no connections and expect VCs to come to you.

It has always been the case that those who need money go to those who have money, not vice versa.

Re: How to Raise Investment

#39

Post by smackeyacky »

satvikpendem wrote: post #38
smackeyacky wrote: post #28

This advice is interesting, but almost entirely useless for anybody outside the US / Silicon Valley bubble. Exactly how are you going to go for coffee with your "VC buddies" if you live 8,000km away? The idea is frankly ridiculous for anybody not in a tiny circle. edit: apparently London is the same. Only further away. This article really highlights how stupid frauds like Theranos get funded. The real answer is betwe…

Well if you're the one seeking money, you need to go where the money is, no? You can't stay where you are with no connections and expect VCs to come to you. It has always been the case that those who need money go to those who have money, not vice versa.

In my experience it just isn't that simple. Early stage VC's like SOSV are happy to talk to anybody from anywhere. Later stage? Not so much. If you are doing something out of the general wheelhouse of the VC community (in my case AgTech) you're boned because the number of companies that invest in Ag are a much smaller set than all the VC firms, and explaining things like genetics to them is like trying to teach pigs how to write html.

In a lot of ways it is easier if you are doing something truly out there, like some kind of lab-based science that requires everybody to have a PhD, because it's easier to convince somebody that you know what you're doing if they are completely ignorant of the topic. In the middle ground of more practical applications of technology it isn't sexy enough and isn't esoteric enough to get anybodies attention regardless of the potential or the business model.

Re: How to Raise Investment

#40

Post by tomblomfield »

robocat wrote: post #35
tomblomfield wrote: post #4

Author here - happy to answer any questions

You said “It is considered bad form to share the contents of a termsheet with other investors” and “You do not want to be seen ‘shopping around’ your unsigned termsheet”. The benefits to a founder of shopping around seem clear, so could you quantify the downside risks? Do the risks matter for a “hot deal”? PS: Thank you so much for your awesome article: it is especially gratifying to see something that isn’t from the…

The downside in the extreme is that the original investor pulls the termsheet and you end up empty handed. I know of cases of this happening, but it's rare.

More commonly, you develop a bad reputation in the VC community, which is very close-knit. Next time you come to raise money, this can hurt.

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