Paul Graham: How finance (a)
Paul Graham is the godfather of American Internet community, he founded the Y Combinator startup incubator, one stroke rewritten the old order of Silicon Valley entrepreneurs and investors, and create a new paradigm founded technology Nike Air Max 1 Hyperfuse companies. From its inception in 2005, Y Combinator startups have supported hundreds of huge, there have been many Dropbox, Airbnb, Heroku, Reddit, Justin.tv etc. Star company. When this article he an investor perspective to attempt to direct financing stage start-ups, particularly in the A round of financing in order to expand business scale, should the matter be noted. (We will take the form of serial publication, please pay attention) Most of the financing startups often more than once. The typical way of financing is almost like this: (1) Starting with Y Combinator or individual angel investors hundreds of thousands of dollars; (2) after the financing to expand the company several million; and (3) Once the company began to clear mode, and then plus one or more rounds of financing to accelerate development. But the fact is some mess. For example, many companies in the Phase 2 financing twice, some skipped directly into Stage 1 Stage 2. Y Combinator more and more startups have had to come directly financing, financing the three stages of the route began to change slowly, imperceptibly. This article is mainly focused on the financing of Phase 2, which is what we in the Y Combinator Demo Day wants to help start-up team to achieve the objectives, the following are some suggestions that we provide. Financing appears to be a driving force for manual labor, but also a living brain, sometimes rare like weightlifting, sometimes like solving a puzzle. Rare like weightlifting because it is sometimes difficult to convince venture capitalists to invest, this problem can not be avoided, the difficulty is normal. But that aspect of mental difficulty is avoided, as the reason why the financing puzzle is because for most of the founder, this is a never touched the field, Classic Nike Air Force 1 High Womens All Purple Shoes so I want to provide for them through this area map. For the founders, the investor’s behavior is often difficult to predict, in part because their motives difficult to guess, and partly because they deliberately mislead you, and this is misleading facing inexperienced founder The wishful thinking. In YC founder from time to time we will warn about the dangers of this, although investors tend to YC startups to be more careful, but we will still witness a chemical reaction often resulting relationship between these two. If you are an inexperienced founder, the only way of living is to use external power to restrain yourself, do not trust your instincts! I will give you a list of some of the rules can lead you to keep going, sometimes you will be tempted to want to ignore that these rules, so that the rules 0: The existence of these rules are there for a reason, they are important because there are other The forces will pull you to the opposite direction. Eventually this will exert a driving force not only in your body, but also applied to the investors. They suffer from two concerns: fears losing investments and successful startups will miss the team’s concerns. But this is the charm of the VC industry, waiting for the most desirable, if they wait until the start-up team to think about the success of the investment when it is too late, to a high rate of return, they must make their own judgments and decisions in the early stages This will make them feel nervous, afraid to invest failure, but in fact they are so frequently. So investors can drag, they will definitely drag, when a start-up company began a few months time, each week of its growth and development as an investment that people will be reference data, but the waiting time, accidentally, Other investors may be forestalled. Such a driving force for all investors are equal, when someone seems to take action, we will have to take some action. Do not rush to financing, unless you want it and it is also suitable for high finance your start-up companies than the column seemed to think outside financing is one of the salient features of startups. But not so. Start-up companies are characterized by rapid development, the majority of the company developed rapidly mainly because: (a) external funding has been obtained funding; (b) their development to make them more readily available funding. These two points for those who rely on outside financing successful start-up company, is beyond reproach. But there are a lot of startups, itself does not want to overly rapid growth and expansion, or outside funding does not help them to good development, which if you are a member, then do not rush financing. In addition, do not always think of financing when you are not able to convince investors, not only a waste of time, but also ruin your reputation. ‘Financing state’, or inside, or do not even going to think it might be the founder of the most unexpected is how much funding it distracting. When you start financing, other things have stopped. The problem is not that the financing is very 2015 Latest Nike Shoes time-consuming, but this time is often the founder of the brain, financing is always first. Start-up team could not bear that kind of long-term distractions, a lot of companies, when early development entirely on start-up members, every day when they want to finance the company’s development will suddenly slow down. Because the financing is so distracting, startups should either serve to complete the financing, or do not even gonna think about it. When you decide to financing, you need to focus on it quickly and get back to my own things to do. Attention financing takes is twofold: to convince investors, and they negotiate. So when you are not ‘financial state’, as long as people do not need to be persuaded to invest and willing to accept your proposed financing conditions, then you can accept such financing, if the valuation is appropriate, (but here there will be some problems, Below I talk, eager investors make valuations may be too high, which could then finance will be raised too high threshold). You do not need to be persuaded to mean: No time is spent in meetings with investors or prepare any material for them. If an investor expressed their readiness to invest you, but you need to go to meet other partners, and when you are not in a ‘state financing’, it only needs to say no, because when they need one more meeting time stating that they are considering, and that requires you to convince them that this is the funding process, and then you are not in that state, you will be distracted. Then they should respond politely tell them you are focused on the current state of development of the company, after financing when you need to look for them naturally. The truth is that many times investors will lure you into ‘financing state’, although you are not in that state. This is a lot of advantages for them, because they can understand you in contact with other people before you, they’ll send Email to tell you what they want to see a face to learn more about you. If you received a ‘propaganda formula (cold-email)’ financing Email, even if you were in the ‘financing state’ should not reply or go to meet him, because financing was not doing so. But even if you are in ‘financial state’ should also try will face delays, they will tell you just want to Jordan Son of Mars see a face chat, but they not only want to see a face from the chat only if they meet you are interested in how do? If they start talking about how do you invest? You have the ability Nike Air Max 95 to refuse to continue to talk about this aspect of things? Unless you are really very experienced financing, and investment in people just see a face chat when kept just chat, or the most appropriate response is: I am very interested in financing future, but now we have to focus on the company The growth and expansion. Prepare self-introduction information for investors in any investment before you chat with someone, you need to be introduced to them. If you appear in the Demo Day, then you will be also introduced to many investors, but even so, you should also prepare information on self-introduction. In Phase 2 of the financing in the end or you need to introduce myself? The answer is required. Some investors will let you put a business plan Email to them, because they do not like direct contact with startups. Self-introduction is very particular. Now the most effective way is to be recommended, such as being a well-known just invested your investors recommendation, or it may be another start-up company’s founder, more class or business in the community of lawyers reporters. Now there are sites like’ll startups AngelList, FundersClub and WeFunder like to recommend to investors, but I recommend these resources as auxiliary like. Financing or rely on your own resources, say when you get a successful investor financing, to rely on those sites after the refinancing would be much easier. Ambiguous ‘Yes’ I mentioned above, said investors prefer to drag as much as possible, while the founder is particularly dangerous to delay their way. They have always been holding your nose, when they seemed to promise to invest your time they said a ‘No’, at least they said a ‘No’. Many even ‘No’ do not say, they just no longer respond to your Email, they hope that this will take the initiative in the distribution of equity. If they decide to invest after you, usually because they heard that you are very popular, when before they would pretend they distracted too much, and now resumed contact you, as if nothing had happened. But this is not the worst case, some investors will use some sound ambiguous statements to mislead Some entrepreneurs want to get a little more. Fortunately, we have some other ways to neutralize such a situation, but you have to see the effectiveness of those sounds like there is ‘Yes’ in the ‘No’ fool you. Founders were misled often happens, I designed a mechanism more insurance: If you think investors are in what promises to you, so that they confirm on paper, no matter what you and they have proposed discrimination, regardless of conflict is derived from their superficial or your wishful thinking, papery agreement can allow these risks go to hell. But until that happens, they say both as the ‘No’ it. The expected value of their own standards before weigh on investor breadth-first search, when you began to contact with the investor, it is best for them BFS (breadth-first search, a graph search algorithm to try to find the most good solution), and it is expected to weigh their own standards. Do not just linked with a single investor, but should be carried out in parallel, as if each one only contact with investors, they will not feel the pressure of other competitors. But you can not spend as much time and effort invested in each person, because there are always some do not fly. The most effective solution is to simultaneously contact with a number of investors, and to spend time on those Latest Nike Air Force 1 Mens White Black Shoes investors who want to work more. Expected = probability of an investor agreed to invest * If yes buff. For example, a well-known investor usually invests a lot of projects, it is very difficult to convince him, but for the investor’s expectations, with a little investment and is easy to be convinced of angel investors expected In fact, the value is almost the same. Some obscure angel Popular Nike Air Force 1 Mens Blue Green Shoes investment funds who invest relatively small number of requests and he will be meeting a lot of start-up companies expected value of such investment side will be relatively small, we should put them in the final before going to meet. For investors breadth-first search will help you save time and effort, especially for those who never explicitly say No but dragged and dragged investors. If some investors do not respond to your Email, or require too many times to meet and see do not come to the wishes of your investment, you can automatically block them. But you have to have some discipline when estimating the possibility can not let your desire to invest affected you weigh the results against them. Unless noted, articles are original or compiled site, please indicate: articles from 36 Krypton