Prioritize product work and customer feedback before fundraising, pitch to multiple investors at once, choose investors carefully, and prioritize relationships over money for long-term success in startups.

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  00:00

  Focus on product work and talking to customers before fundraising, keep emails short and informative, show progress relative to time spent, make a clear and concrete ask when reaching out to investors.

  • Demo day is a helpful artificial forcing function for founders to focus on product work until it's good enough to have customers, and then switch over to fundraising, as fundraising takes all of their time and energy and effort.
  • Investors want to see evidence that you will do what you say you will do, so spending time working on your product and talking to customers before pitching to investors is crucial.
  • When emailing a seed stage investor, it's important to keep the email short and informative by doing research on the person you're emailing and figuring out if they're interested in the space.
  • Investors are more interested in seeing progress made relative to the time spent working on something, whether it's traction with customers or building something interesting in a short period of time.
  • When emailing investors, make a clear and concrete ask instead of immediately asking for a half an hour of their time.
  • Be direct when reaching out to potential investors, avoid sending big attachment decks unless asked for, and respect the investor's process unless you have significant leverage.
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  08:35

  Pitch to multiple investors at the same time to create positive buzz and avoid negative feedback when fundraising.

  • To effectively fundraise, it's important to understand your leverage and have a parallelized process in place.
  • When fundraising, talking to one investor at a time is a mistake because information about your company spreads faster than you can move.
  • Pitch to multiple investors at the same time to avoid negative feedback and create positive buzz.
  • When it comes to investor meetings, it's important to tell a compelling story that gets the investors excited and talking about the company.
  • Investors want to hear a story about how your company will rewrite the future and capture a major market, while customers only care about you solving their problem.
  • Start small and focus on the current market before jumping to grand visions, and avoid overcapitalization as it can lead to wrong decisions.
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  14:30

  Startups should prioritize time over money, have a credible plan with clear milestones, and choose investors carefully to succeed at the business.

  • The most precious resource for a startup is time, not money, and using money as an excuse to not move quickly is just signaling and not necessary.
  • Investors expect more progress from companies that have raised more money, and they want the money to be spent to grow faster.
  • Have a credible plan with clear milestones and think big while maintaining a continuous line from one thing to another.
  • People often make the mistake of telling a discontinuous story, similar to the Underpants Gnomes from South Park, where they jump from one point to another without proper context or explanation.
  • Have a rational reason for why things work, make it ambitious but believable, and progress is the best way to argue that what you're saying is believable when evaluating seed and angel investors.
  • Get the money you need to build the business without losing control, as the only thing that matters is succeeding at the business, and if you have the luxury of choosing investors, think carefully about who they are and their incentives.
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  19:58

  More people are investing in startups, but founders should be cautious of undisclosed funding sources and build relationships with select series A investors to create intrigue and uncertainty.

  • Angels, who were once seen as eccentric people with money who liked to invest in businesses, have now evolved into various forms such as angel syndicates and special-purpose vehicles, but none of these are inherently bad.
  • More people are investing in startups, but many angels are not disclosing the source of their money, which can lead to uncertainty about their incentives.
  • Be suspicious of venture capital firms that represent themselves as a single name but are actually full VC firms with institutional lp's behind them, as this indicates dishonesty and something may be off.
  • Fundraising for a Series A company is similar to seed funding, but with a different cast of characters and a longer time frame, with a traditional Series A lead investor buying around 20% of the company and taking a seat on the board.
  • Build relationships with a select group of series A investors by meeting them casually every other month or so to focus on building rapport rather than giving a full breakdown of your business.
  • Investors need to be able to decide whether to invest or not after any meeting with a founder, so founders should create a situation where they remain uncertain but intriguing.
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  25:20

  Share limited metrics with investors to build relationships and focus on a strong business for fundraising success.

  • When fundraising, share a limited set of metrics to build a relationship with investors and focus on having a good underlying business.
  • To set up loose relationships with investors for Series A funding, use angel investors to introduce you to well-networked investors or research and email investors with relevant and interesting pitches, and persistently update them on your progress.
  • Pay attention and do your job, the beasts are good and can't ignore you.
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  28:14

  Remember that YC is just the beginning, success requires sacrifice and balance in your personal and professional life.

  • Good investors will be open to opportunities wherever they come from and will find you, and post demo day psychology is important to consider.
  • The most important thing after YC is to remember that the vast majority of the life of your company is ahead of you, and to not trick yourself into believing that you can relax or that you're screwed based on fundraising or YC outcomes.
  • Succeeding with a startup at the highest level requires a lot of sacrifice in other parts of your life and you have to be okay with that or not and you have to strike the balance that makes sense for you.
  • Balancing personal and professional life is a great sacrifice and it varies for different people, so don't compare yourself to others on social media.
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  32:35

  Be realistic about your goals and prioritize relationships over money for long-term happiness, while recognizing the potential impact of startups on history.

  • Find the right balance for yourself by talking to others who have gone through similar experiences, but don't lie to yourself about being able to have it all.
  • Be realistic about what you can achieve and what you want to achieve, as what makes others happy may not make you happy.
  • Money doesn't bring happiness, having a healthy family life and friends is the key to long-term happiness, and people who have achieved what they genuinely wanted to do are equally happy regardless of their accomplishments.
  • Startups have the potential to fundamentally shift the course of human history, as demonstrated by the impact of companies like Google, Apple, Microsoft, Cisco, Boeing, and Standard Oil.
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  37:00

  Start a startup if you want to, but it will cost a lot.