The video provides advice on how to successfully raise funds for a startup, including understanding investors, choosing the right VC fund, preparing for meetings, and avoiding uncomfortable or violating behavior.

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  00:00

  Consider raising funds only if it leads to significant growth, understand investors and avoid diluting equity.

  • To have a successful investor meeting, it's important to know who the investors are, what motivates them, and to determine if raising money is necessary for your business.
  • Raising money for your business should only be considered if you have a clear understanding of how it will be spent and if it will lead to significant growth, as hiring employees can be costly and should be avoided if possible.
  • Think carefully about whether hiring is the blocker to your business growth, rather than spending money on user acquisition which may not be profitable.
  • Acquire users for free and rely on their word-of-mouth to avoid raising money, but consider raising funds for customer service when it becomes a limiting factor.
  • Don't rush into fundraising before you have something to show investors, as every dollar raised dilutes your equity, and it's important to understand the different types of investors and how to approach them.
  • Be careful when considering accelerators as most advisors have no experience and can actually hurt your company, and friends and family are the most common source of funding for early-stage startups.
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  09:06

  Be cautious when accepting money from friends and family for your startup, treat them like real investors, and consider reaching out to seed funds for investment opportunities.

  • Friends and family can provide financial support for startups, but it's important to only accept money from those who can afford to lose it.
  • Be thoughtful about taking money from friends and family, don't make the terms onerous, and treat them like real investors with an actual pitch and understanding of what you're doing.
  • Angels invest in new companies for various reasons, including the desire to see new technologies exist and paying it forward.
  • Angels are easy to get in front of, but be careful of angel groups who may not invest and just want to show off their success.
  • Seed funds are professional investors who invest on behalf of angels and are aggressive about finding good deals, so founders should reach out to them for investment opportunities.
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  14:15

  Choose the right VC fund for your stage of capital to meet the expectations of limited partners and ensure a good return on investment.

  • VC funds come in different sizes and have multiple limited partners who expect a certain return on investment, so it's important to choose the right one for your stage of capital.
  • Investors are looking for VC partners who can return more at a better risk than anything else and can invest in every single investment that will return their entire fund.
  • Crowdfunding websites are a good way to raise money without meeting investors, but not ideal for raising large amounts of money due to having many individual investors on your cap table.
  • Sending a good cold email to investors requires research and personalization, as professional investors value their time and are only receptive to meetings with those who matter most.
  • Research and customize your introduction to investors by finding relevant information about them and your project to get in front of them.
  • Aaron invites Dora to discuss their potential investment opportunity, highlighting their solution to unit economics and reliability, offering to do so over email or a 15-minute phone call.
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  21:20

  Solve critical issues and increase response rates by sending relevant emails to investors, while also being mindful of spamming.

  • Solve critical issues and send relevant emails to investors, avoiding spamming, to increase response rates.
  • Find the unknown, amazing company with no connections and invest in it before anyone else does to make a lot of money.
  • Different types of meetings with investors include intro meetings, follow-up meetings, decision meetings, and diligence meetings, each with their own purpose and attendees.
  • Investors may use fancy dinners to sell you on an offer and show you how great they are, but it's important to make sure the people you're taking money from aren't jerks and that you want to be associated with them for the life of your company.
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  24:53

  Keep your pitch deck concise and focus on key metrics to show your understanding of the product during decision meetings.

  • For an intro meeting, it's crucial to have a clear and concise explanation of your idea as people make decisions about what they want to do in an interview within the first 30 seconds.
  • When meeting with investors, having a demo of your product and presenting yourself professionally is crucial to show progress and potential for growth.
  • To understand your business metrics, you need to have a framework for understanding the importance of monthly, weekly, daily, or hourly actives and explain your progress in terms of how long you've been working on it and how far you've gotten.
  • Keep your pitch deck concise and focus on key metrics to show your understanding of the product during decision meetings.
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  29:08

  Prepare for investor meetings by projecting future potential, having legal documents and financials in order, and avoiding time-wasting or disrespectful investors.

  • In a decision meeting with professional investors, projecting the future potential of the company is crucial and can make the difference between being just another company or something with a huge vision that they believe can be achieved.
  • Prepare for diligence meetings by having legal documents and financials in order, and a metrics dashboard to present, as the ultimate goal is securing funding rather than impressing investors with fancy dinners.
  • Meetings with investors are not necessary if you can get the money you need without them, and only start meeting with investors when you know you need money for fundraising.
  • Investors who say "no" quickly are often the best because they understand what they're looking for and can make decisions quickly.
  • Watch out for investors who waste your time or are jerks, including those who try to impress you with their money or connections.
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  34:35

  Don't let investors talk down to you or make you feel stupid, check if they're invested in competitors, and don't tolerate any uncomfortable or violating behavior during meetings.

  • Don't let investors talk down to you or make you feel stupid, and if someone is being a jerk, leave the meeting and give honest feedback if necessary.
  • Investors may invest in competitors and it's important to check if they are already invested and talk to them about it ahead of time.
  • Trust and confidentiality are highly valued in the industry, but sexual harassment and other forms of bigotry are unfortunately prevalent, and YC founders should not tolerate any behavior that makes them feel uncomfortable or violated during investor meetings.
  • Learn how to approach investor meetings effectively by understanding when, how, and with whom to do them, and consider approaching investors who have invested in competitors depending on the case.
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  38:37

  Investors in emerging markets rely on confirmatory data from other smart investors due to lack of data on early-stage startups, leading to FOMO.

  • When deciding on seed funds, consider the specific situation and what type of funding is needed, with smaller funds and angels typically providing smaller checks and larger funds providing beyond that, and to determine the credibility of angels, ask for references and look at their portfolios.
  • Investors in emerging markets want to invest in the largest companies possible and rely on confirmatory data from other smart investors due to the lack of data on early-stage startups, leading to the fear of missing out (FOMO).
  • The best investors are those who make their own decisions quickly and have fast diligence processes, while founders should avoid pitching their vision as either too big or too small.
  • When pitching to family and friends, it's important to consider the relationship and practice with an elevator pitch or deck.
  • Only fundraise if necessary and be prepared to take six months to a year, but don't let it distract you from working on your product.
  • Female founders should take advantage of investors who specifically fund women, but fundraising should not be the sole focus of the CEO and bringing the entire team to meetings can put them at a disadvantage.