Not really a criticism, but this read a bit like a slimy dating guide. "Remember, like everyone else they want to feel wanted for more than their money". "Keep them all interested until you've made up your mind". "Subtly let them know that you're wanted by others".
On an unrelated note: I don't know why I can never contribute constructively on this site, but here I am.
I wasn't really trying to imply it's bad advice or isn't ethical or anything. I get that the parallel I decided to draw does indeed somewhat imply that, but my intentions weren't as such. Just struck me as funny.
"Absolutely" is a lie in this situation. Lying, is, realistically, a better way to make any sale - but also realistically, an invitation to lawsuits and prosecution.
"She said, ‘Look, it’s not easy. It’s hard. A couple things have to come together, but I think if they do, we’ll be in a position to make the budget.’ That’s a very honest answer. But it’s not the answer to give in this situation.”
When you’re pitching, he says, the right answer is: “Absolutely. In fact, I actually think we’re going to do a little bit better, but I don’t like to over-promise. There are a couple things that are not in there that we think we can hit. We are absolutely going to make those numbers."
I stopped reading after that paragraph. I'd rather give honest answers than think that I have to lie to get funding. Also, my startups have raised tens of millions of dollars, so I'd rather not trust the author's advice.
> “When I plan to be raising in six months, I’m already out there, proactively connecting with VCs, having coffees, making as many of them aware of my company as possible,” says Ryan. “The conversation is safer when I’m not raising money.”
Yeah, because so many of us can pick up the phone and have VC's go have coffee with us for no reason at all. <rolls eyes>
Starting off an article on fundraising with "Have a lot of rich friends" doesn't actually add credibility to the rest of the article.
Does it strike me odd that CEOs and founders complain about fund raising? That's one of the most important parts of their job. And I don't see how having 20 VC pitch meetings lasting 30 minutes on average over the course of three months is exactly "hard" work. I'd expect nothing less, and perhaps even more. Or at least some kind of analytical approach to the process that is both reasoned and strategic as it is diligent. I'd assume after the first few presentations you'd pretty much have it down save for some specific research on the firm. If its a lot of e-mailing and paper/busy work, one can hire an assistant or PT contract staff to help.
This is the kind of work I'd relegate as a skill, but not a pure talent if that makes any sense. Some people are probably more natural than others but the skills required aren't worth staking your life on, and this is very much one of those things where all the value comes from experience and knowing the right people.
If people don't want to fundraise, the solution is simple: don't be a CEO or start a company.
> Does it strike me odd that CEOs and founders complain about fund raising? That's one of the most important parts of their job.
> If people don't want to fundraise, the solution is simple: don't be a CEO or start a company.
That has to be heavily qualified, as it applies to a very small subset of CEOs and founders. Your last statement is radically off-base vs the reality of who starts most new companies in the US. The extreme majority, 99%, of all CEOs and founders in the US do not actively fund raise as part of their jobs. They have actual operating businesses that require their attention and pay for themselves with sales, or otherwise are bootstrapping on variations of self-funding. Few start-ups in the US are backed by venture capitalists or involve VC fund raising.
~500,000 new businesses are started every month in the US. ~400k-500k new employer businesses are started each year. Less than 1% of all of those businesses are backed by venture capitalists.
I think a lot of people hope that they can start an company by bootstrapping it. They hope they can start a company without selling. At least without selling themselves to VCs. I have this hope. In reality this hope in unrealistic, because capitalism requires capital. Very few businesses can realistically be bootstrapped. I think you are correct in your assessment that most of the people who’ve commented on this thread about not wanting to raise funds like this are unfit for reality. I myself wonder if I am fit for reality, and try to be realistic about the fact that I will need to raise money or risk jeopardizing what I’ve spent a long time working on. If you think finance and raising money like this are somehow beneath you, you’re unfit for this scene. This scene is all about selling yourself in the basest most vulgar ways to get capital so that you can engage in capitalism. ABC. Bootstrappers are the real unicorns.
As others have mentioned, your final statement has the implication you need to fundraise from a VC to start a company. I'd reframe it to being "your job as a CEO is to ensure you're adequately funded".
If that entails going to VCs, that's your job, If it's meeting bank managers for a standard loan, that's your job. If it's building or bootstrapping to gen revenue, that's your job.
I agree with your initial point though, this process (making sure there's cash in the bank to execute on the vision) is essentially part of the CEO's role, but most articles on the topic see it as being something different.
If you bootstrap it isn't really part of the job at all. You can still start a company and be CEO. Not every startup needs $750M and many would be worse off to have it.
Frankly, this seems like a great article pointing out exactly why the VC and startup space is such a male dominated area. So many clear male biases here (exude confidence, fake it until you make it, etc)
I think they may be referencing a confidence gap[1]. 'Fake until you make it' seems like it's referring to imposters syndrome[2]. I haven't found any evidence that it's more prevalent in women than men. Anecdotally women's credentials & skills in tech are often more scrutinized than men which makes 'faking it' seem less possible.
There is definitely place for VC money, but only if market is untapped and late entry to market will cost billions of dollars(Facebook, Uber or that company who will create first self-driving car fleet etc).
This is a joke. "You basically start to believe your own bullshit after a while, and that’s a good thing." How can this be taken as serious advice?
I hate this guy, and what this guy represents. I am not a bullshitter, and I will never be one. I'd rather not raise money and fail, than bullshit my way to IPO.
Probably one of the best articles I have read about fund raising. It is much more tactical than the typical advice you see on this topic. First Round has a lot of fluff articles but this one is really worth reading.
On an unrelated note: I don't know why I can never contribute constructively on this site, but here I am.
Know any alternatives? Otherwise we could band together and try to form an HN 2.0. It probably won't work, but it's worth attempting.
"She said, ‘Look, it’s not easy. It’s hard. A couple things have to come together, but I think if they do, we’ll be in a position to make the budget.’ That’s a very honest answer. But it’s not the answer to give in this situation.”
When you’re pitching, he says, the right answer is: “Absolutely. In fact, I actually think we’re going to do a little bit better, but I don’t like to over-promise. There are a couple things that are not in there that we think we can hit. We are absolutely going to make those numbers."
Yeah, because so many of us can pick up the phone and have VC's go have coffee with us for no reason at all. <rolls eyes>
Starting off an article on fundraising with "Have a lot of rich friends" doesn't actually add credibility to the rest of the article.
This is the kind of work I'd relegate as a skill, but not a pure talent if that makes any sense. Some people are probably more natural than others but the skills required aren't worth staking your life on, and this is very much one of those things where all the value comes from experience and knowing the right people.
If people don't want to fundraise, the solution is simple: don't be a CEO or start a company.
> If people don't want to fundraise, the solution is simple: don't be a CEO or start a company.
That has to be heavily qualified, as it applies to a very small subset of CEOs and founders. Your last statement is radically off-base vs the reality of who starts most new companies in the US. The extreme majority, 99%, of all CEOs and founders in the US do not actively fund raise as part of their jobs. They have actual operating businesses that require their attention and pay for themselves with sales, or otherwise are bootstrapping on variations of self-funding. Few start-ups in the US are backed by venture capitalists or involve VC fund raising.
~500,000 new businesses are started every month in the US. ~400k-500k new employer businesses are started each year. Less than 1% of all of those businesses are backed by venture capitalists.
If that entails going to VCs, that's your job, If it's meeting bank managers for a standard loan, that's your job. If it's building or bootstrapping to gen revenue, that's your job.
I agree with your initial point though, this process (making sure there's cash in the bank to execute on the vision) is essentially part of the CEO's role, but most articles on the topic see it as being something different.
1.https://scholar.harvard.edu/files/sarsons/files/confidence_f...
2.http://www.paulineroseclance.com/pdf/ip_high_achieving_women...
Too many founders pour their life into a project and end up making less than their investors do from the sale of their own company.
That said, if you can raise a lot for very little equity in a short time, it can be worth it.
I hate this guy, and what this guy represents. I am not a bullshitter, and I will never be one. I'd rather not raise money and fail, than bullshit my way to IPO.
Edit: fine, no snarky comments