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- Fundraising - Fundraising is brutal. - Customers don't care how hard you worked, only whether you solved their problems. - Investors evaluate startups the way customers evaluate products, not the way bosses evaluate employees. - Problem number 3: investors are very random. All investors, including us, are by ordinary standards incompetent. - Startup investors all know one another, and (though they hate to admit it) the biggest factor in their opinion of you is the opinion of other investors - **Bootstrapping sounds great in principle, but this apparently verdant territory is one from which few startups emerge alive. The mere fact that bootstrapped startups tend to be famous on that account should set off alarm bells. If it worked so well, it would be the norm.** - ==For a given total amount of pain, raising money is the better choice, because new technology is usually more valuable now than later.== - At YC one of our secondary mantras is "Deals fall through." No matter what deal you have going on, assume it will fall through. The predictive power of this simple rule is amazing. It's very flattering when eminent investors seem interested in funding you. It's easy to start to believe that raising money will be quick and straightforward. But it hardly ever is. - The best way to survive the distraction of meeting with investors is probably to partition the company: to pick one founder to deal with investors while the others keep the company going. - I advise approaching fundraising as if it were always going badly. What I tell most startups we fund is that if someone reputable offers you funding on reasonable terms, take it. - **There are two questions VCs ask that you shouldn't answer: "Who else are you talking to?" and "How much are you trying to raise?"** - ==but because you shouldn't *have* a fixed amount you need to raise.==. A couple hundred thousand would let them get office space and hire some smart people they know from school. A couple million would let them really blow this thing out. ==The message (and not just the message, but the fact) should be: we're going to succeed no matter what. Raising more money just lets us do it faster== - You may even want to do a "rolling close," where the round has no predetermined size, but instead you sell stock to investors one at a time as they say yes. That helps break deadlocks, because you can start as soon as the first one is ready to buy. - **Don't take rejection personally.** - This is less true with angels, but VCs reject practically everyone. The structure of their business means a partner does at most 2 new investments a year, no matter how many good startups approach him. - Raising $20,000 from a first-time angel investor can be as much work as raising $2 million from a VC fund. - So while you're talking to investors, constantly look for signs of where you stand. How likely are they to offer you a term sheet? What do they have to be convinced of first? - Investors tend to resist committing except to the extent you push them to. It's in their interest to collect the maximum amount of information while making the minimum number of decisions. The best way to force them to act is, of course, competing investors. But you can also apply some force by focusing the discussion: by asking what specific questions they need answered to make up their minds, and then answering them. If you get through several obstacles and they keep raising new ones, assume that ultimately they're going to flak #@Sven G - The biggest danger is surprise. It's that startups will underestimate the difficulty of raising money—that they'll cruise through all the initial steps, but when they turn to raising money they'll find it surprisingly hard, get demoralized, and give up. So I'm telling you in advance: raising money is hard - Pitch Deck - The key point to remember here is that founders should strive for clarity and concision. **This is not the right place to write a treatise on your market or world philosophy.** Focus on narrative. The rest is commentary. -