Posted on September 19, 2013 @ 08:44:00 AM by Paul Meagher
Paul Graham is one of the cofounders and the leading voice for Y Combinator.
Since 2005, Y Combinator has funded over 450 startups, including Dropbox, Airbnb, Stripe, and Reddit.
Paul's latest blog posting, How to
Raise Money, offers excellent and authoritative advice for anyone trying to raise money for their startup. Below is a listing of his main points. To obtain more details on each point you should
read the full blog>:
- Don't raise money unless you want it and it wants you.
- Be in fundraising mode or not.
- Get introductions to investors.
- Hear no till you hear yes.
- Do breadth-first search weighted by expected value.
- Know where you stand.
- Get the first commitment.
- Close committed money.
- Avoid investors who don't "lead."
- Have multiple plans.
- Underestimate how much you want.
- Be profitable if you can.
- Don't optimize for valuation.
- Yes/no before valuation.
- Beware "valuation sensitive" investors.
- Accept offers greedily.
- Don't sell more than 25% in phase 2.
- Have one person handle fundraising.
- You'll need an executive summary and (maybe) a deck.
- Stop fundraising when it stops working.
- Don't get addicted to fundraising.
- Don't raise too much.
- Be nice.
- The bar will be higher next time.
- Don't make things complicated.
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