What’s the best way to raise money?

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

Over the past several years, the investment community has evolved from a strategy of anointing a small number of winners early and then supporting them for years to a strategy of spraying money at early stage startups and then ruthlessly culling them at the next stage. This is probably the optimal strategy for investors.

What’s the best way to raise the right amount of money?

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

Underestimate how much you want. Though you can focus on different plans when talking to different types of investors, you should on the whole err on the side of underestimating the amount you hope to raise. For example, if you’d like to raise $500k, it’s better to say initially that you’re trying to raise $250k. Then when you reach $150k you’re more than half done. That sends two useful signals to investors: that you’re doing well, and that they… (read more)

What’s the best way to raise money?

Paul Graham (Co-Founder & Partner at Y Combinator)
How to Raise Money

Most companies in a position to grow rapidly find that (a) taking outside money helps them grow faster, and (b) their growth potential makes it easy to attract such money. It’s so common for both (a) and (b) to be true of a successful startup that practically all do raise outside money. But there may be cases where a startup either wouldn’t want to grow faster, or outside money wouldn’t help them to, and if you’re one of them, don’t raise money.

What’s the best way to raise money?

Paul Graham (Co-Founder & Partner at Y Combinator)
Before the Startup

There are tricks in startups, as there are in any domain, but they are an order of magnitude less important than solving the real problem. A founder who knows nothing about fundraising but has made something users love will have an easier time raising money than one who knows every trick in the book but has a flat usage graph. And more importantly, the founder who has made something users love is the one who will go on to succeed after raising th… (read more)

What’s the best way to raise money?

Paul Graham (Co-Founder & Partner at Y Combinator)
The Hacker’s Guide to Investors

This is how most venture investors operate. They don’t try to look at something and predict whether it will take off. They win by noticing that something is taking off a little sooner than everyone else. That generates almost as good returns as actually being able to pick winners. They may have to pay a little more than they would if they got in at the very beginning, but only a little.

What’s the best way to raise money?

Paul Graham (Co-Founder & Partner at Y Combinator)
Before the Startup

The best way to convince investors [to invest] is to make a startup that’s actually doing well, meaning growing fast, and then simply tell investors so. [Founders] want to know what the tricks are for growing fast. And we have to tell them the best way to do that is simply to make something people want