What’s the best way to raise money?

Rob Go (Co-Founder and Partner at NextView Ventures)
Using Capital as a Weapon – ROBGO.ORG

As seed stage investors, we find that we tend to prefer modest sized rounds early on to focus a team and establish discipline around being excellent at one thing and proving things out efficiently. But beyond the seed stage, capital is primarily about winning and winning big. We look to invest in [high potential] companies with capital efficient beginnings, and usually, those types of companies do take in a fair bit of capital and use that capita… (read more)

What’s the best way to pitch your company to investors?

Rob Go (Co-Founder and Partner at NextView Ventures)
Why The Series B is the “Sucker Round” – ROBGO.ORG

In the seed and Series A, you are selling promise and some execution. In growth rounds, you are selling something that already “works”. You are selling a marketing machine, and the ability to “put in 1 dollar and get out 2″. In between, you are selling a hybrid of both, and that isn’t easy.

What’s the best way to get more customers for your product?

Rob Go (Co-Founder and Partner at NextView Ventures)
Very Basic Startup Marketing – ROBGO.ORG

The best marketing is customer success. That’s why I think it’s incredibly important that the functions of product and marketing not be thought of as two silos. The job is not done when you’ve gotten someone to pay. It is done when you have delighted a customer to the point that they can’t help but tell others about you.

What’s the best way to get more customers for your product?

Rob Go (Co-Founder and Partner at NextView Ventures)
Ain’t Nothing Like The Real Thing – ROBGO.ORG

I’ve been on a bit of a quiet campaign to meet a bunch of really strong user-acquisition folks at different startups in Boston and New York. One thing that is surprising is that many of these people have limited marketing experience. What they do have is a highly analytical background and a mentality around experimentation. On the flip side, more experienced marketers often enter a startup setting wanting to employ an older playbook to stick to t… (read more)

What’s the best way to create your product strategy?

Rob Go (Co-Founder and Partner at NextView Ventures)
Very Basic Startup Marketing – ROBGO.ORG

“Swiss army knife” products rarely work. You hopefully create a raving fan by being an amazing scalpel for a particular problem. Then, that person will tell everyone else who needs a scalpel that you are a great solution. Then, the person who hears the same recommendation 3-5 times, will finally give you a try. That’s much harder to do if you are trying to be all things for all people.

What’s the best way to raise money?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Role Of Personal Chemistry In Investment Selection – AVC

There are four phases to this process. The first impression, Subsequent meetings, Reference checking, The negotiation

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

Investors always say what they really care about is the team. Actually what they care most about is your traffic, then what other investors think, then the team. If you don’t yet have any traffic, they fall back on number 2, what other investors think.

Paul Graham (Co-Founder & Partner at Y Combinator)
Default Alive or Default Dead?

If you have steep revenue growth, say over 6x a year, you can start to count on investors being interested even if you’re not profitable

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
College and Entrepreneurship – AVC

I believe 21 founders out of a total of 72 that we have backed in the history of USV did not graduate from college. That’s about 30%.
However, I believe 17 founders have advanced degrees, including a few PhDs. So roughly a quarter of the founders we’ve backed have invested heavily in their higher education.
There are no specific credentials required to get funded by USV or most other VC firms. You need to be credible as an entrepreneur. That me… (read more)

Bruce Gibney (Former Partner @ Founders Fund)
Peter Thiel’s CS183: Startup – Class 8 Notes Essay

There’s a romantic notion that the only thing that matters is product and that you can devote yourself to that entirely. That is false. In fact, fully half of your job is selling the company because the CEO is the only one who can actually pitch effectively (no VC wants to be pitched by the VP of Sales).

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Seed Financing Is For – AVC

The first step you need to climb is building a product, getting it into the market, and finding product market fit. I think that’s what seed financing should be used for. The second step you need to climb is to hire a small team that can help you operate and grow the business you have now birthed by virtue of finding product market fit. That is what Series A money is for.
The third step you need to climb is to scale that team and ramp revenues a… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
In Between: The Tough Place To Be – AVC

Entrepreneurs need to understand this. There are a ton of options out there for early stage funding. And if you get to the stage where you need a growth round from a big fund, there are plenty of options for that too. But if you are looking for a Series B round to help you grow from early revenue status to true growth status, you are going to find that challenging.
To put it another way, there are plenty of us who fund hopes and dreams. And plen… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Revenue Based Financing – AVC

A revenue-based finance (RBF) investment provides capital to a business by “selling” an ongoing percentage of a company’s future revenues to the investor. For simplicity, you can think of it as a revenue share type of arrangement. Investor gives capital to company in exchange for a small percentage of gross revenues. RBF lives as a hybrid of bank debt and venture capital. This kind of financing has been around for a while in non-tech industries … (read more)

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

If you have multiple founders, pick one to handle fundraising so the other(s) can keep working on the company. And since the danger of fundraising is not the time taken up by the actual meetings but that it becomes the top idea in your mind, the founder who handles fundraising should make a conscious effort to insulate the other founder(s) from the details of the process. The founder who handles fundraising should be the CEO, who should in turn b… (read more)

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.

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

Because fundraising is so distracting, a startup should either be in fundraising mode or not. And when you do decide to raise money, you should focus your whole attention on it so you can get it done quickly and get back to work.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Other Benefit Of Fundraising – AVC

Treat your fundraising process as two things. First and foremost, it is about getting the capital you need to operate and grow your business. But it is also a fact finding mission about the things you need to address to make your business better. Don’t forget to do the second thing because it is a fantastic opportunity to improve your business for the long haul.

Henry Ward (Founder & CEO at eShares)
eShares Series A — Medium

And below is five lessons learned (especially for fin-tech startups). Fundraising is a filtering exercise, not a popularity contest. If you are a fintech startup, go East! Ask for feedback other than “the market size isn’t big enough.” Avoid VCs who ask for unit economics. Success is harder than failure.

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)

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.

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

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Investors see a lot of pitches. In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches; decides to look more closely at 600 to 800 of them; and ends up doing between 0 and 2 deals. The goal of an entrepreneur is to be one of those deals.

Boris Wertz (Founder of version one ventures)
Nine common things that start-up founders tend to underestimate or overestimate – Version One

No amount of money in the world is going to get you to product-market fit. And raising too much money before you find product-market fit will usually kill your start-up.

Sam Altman (President at Y Combinator)
Startup Playbook

The secret to successfully raising money is to have a good company. Always explain why you could be a huge success. It is a bad idea to try to raise money when your company isn’t in good enough shape to attract capital. You will burn reputation and waste time.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Getting The Deal Done – AVC

Sometimes you just need to get the deal done. When you are burning through cash and need to finance your company, the terms might suck, but the cash doesn’t. So you do the deal and live to fight another day. Marc and Ben did the right thing at LoudCloud and Jack Dorsey did the right thing at Square. If you believe in your business and yourself, take the money and get back to work. A financing is not an exit. The price matters less than the cash m… (read more)

Amir Elaguizy (CEO Cratejoy, YC Alumni)
58 things I learned at YC – Giftshop Scientist

Angels are a LOT easier to get checks from than VCs

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

The number one thing you want from [early] fundraising is to get the money you need, so you can get back to focusing on the real test, the success of your company. Number two is good investors. Valuation is at best third.

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.

Paul Graham (Co-Founder & Partner at Y Combinator)
Startup Investing Trends

There’s a rule of thumb in the VC business that there are about 15 companies a year that will be really successful. Although a lot of investors unconsciously treat this number as if it were some sort of cosmological constant, I’m certain it isn’t.

Paul Graham (Co-Founder & Partner at Y Combinator)
The Future of Startup Funding

A startup will probably get more attention from investors in a Series A round than an angel round. So if a startup is choosing between an angel round and an A round from a good VC fund, I usually advise them to take the A round.

Rob Go (Co-Founder and Partner at NextView Ventures)
Using Capital as a Weapon – ROBGO.ORG

As seed stage investors, we find that we tend to prefer modest sized rounds early on to focus a team and establish discipline around being excellent at one thing and proving things out efficiently. But beyond the seed stage, capital is primarily about winning and winning big. We look to invest in [high potential] companies with capital efficient beginnings, and usually, those types of companies do take in a fair bit of capital and use that capita… (read more)

Sam Altman (President at Y Combinator)
Fundraising Advice for YC Companies – Y Combinator Posthaven

You should care more about good investors than good valuations. Talk to the founders of the companies that investor has funded (especially in cases when the companies haven’t worked out). You should insist on clean terms (in practice, offering messy terms is a sign of being a bad investor).

Sam Altman (President at Y Combinator)
Fundraising Advice for YC Companies – Y Combinator Posthaven

The best investors know that the most important thing to figure out at [the early] stage is how much your users love you. Great engagement and word of mouth growth are magic for fundraising. Growth is obviously still really helpful.

Sam Altman (President at Y Combinator)
Fundraising Advice for YC Companies – Y Combinator Posthaven

It’s important to articulate why the company will eventually be in a strategically valuable position (i. e. a monopoly). It’s important to articulate your mission. Don’t be arrogant–this is a tactic that somehow does manage to work for fundraising some of the time for some founders, but most of the time it doesn’t.

Sam Altman (President at Y Combinator)
Party rounds – Sam Altman

I think the rising popularity of party rounds is bad for companies. Having at least one investor very focused on your company is valuable. A closely involved investor will help coordinate your next round…

Sam Altman (President at Y Combinator)
Fundraising Mistakes Founders Make – Sam Altman

The process is simple: Get intro’s to investors you want to talk to and reach out to them, in parallel [to set up a competitive environment]. Explain to them why your company is likely to make them a lot of money.

Sean Ellis (CEO at GrowthHackers)
Figuring Out Your Way to Startup Success

It is obvious that the effort required to raise VC funds can be a major distraction from executing the business, but few realize that the repetitive discussions about financial outcomes can also shut down your ability to figure stuff out.

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

Don’t fall in love with the fundraising process. Get it done and move on.

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

The earlier the round, the less capital you need and the more reasonable your valuation the less time that is needed generally to raise capital. In other words, raising $2 million at a $6 million pre-money valuation has always been easier & quicker than raising $20 million at any valuation.

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

When you raise larger rounds there is more “due diligence,” which includes: calling customers, looking at financial metrics, doing cohort analysis (looking for trends like changes in churn rates), evaluating competitor positioning and understanding more of the competency of your executive team.

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

My advice: be cautious, start early, get to know investors before you need capital, do your research on who is a likely good fit and understand that fund-raising is always part of your job – not something you do in “fund-raising season” for 2-3 months every other year

Mark Suster (Managing Partner at Upfront Ventures)
So What is The Right Level of Burn Rate for a Startup These Days? | Bothsides of the Table

People who think of fund raising as a “distraction away from the core business” fundamentally don’t understand that running a business comprises of: Shipping products, selling to & servicing customers, marketing, HR, recruiting, financial reporting AND making sure you have enough money to support operations.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Angels vs. Venture Capitalists – Ben’s Blog

If you are a small team building a product with the hope of “seeing if it takes” (with the implication being that you’ll try something else if it doesn’t), then you don’t need a board or a lot of money and an angel round is likely the best option. On the other hand, if you’ve developed a strong belief in your product or your product idea and you are in a race against time to take the market, then a venture round is more appropriate.

What’s the best way to pitch your company to investors?

Aaron Levie (CEO of Box)
Aaron Levie (@levie) | Twitter

Sizing the market for a disruptor based on an incumbent’s market is like sizing the car industry off how many horses there were in 1910.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Startup financing is not a popularity contest; everyone saying yes is irrelevant to you. It’s more important to have the right person say yes than it is to have everyone say yes.

Tim Jackson (‎General Partner at Lean Investments)
Investment Swarm with Tim Jackson at Hive53.com – YouTube

Team: how good? Traction: how fast? Market: how big? Barriers: how high? and then… Why did this deal come to me? How can I help?

Rob Go (Co-Founder and Partner at NextView Ventures)
Why The Series B is the “Sucker Round” – ROBGO.ORG

In the seed and Series A, you are selling promise and some execution. In growth rounds, you are selling something that already “works”. You are selling a marketing machine, and the ability to “put in 1 dollar and get out 2″. In between, you are selling a hybrid of both, and that isn’t easy.

Sam Altman (President at Y Combinator)
What happened to innovation? – Sam Altman

A two-by-two matrix of progress in innovation (and ease of attracting investment) with software/physical on one axis and short-term/long-term on the other axis looks like this. Green is good, yellow is ok, and red is bad. https://phaven-prod.s3.amazonaws.com/files/image_part/asset/948806/gd5P6SxQ7LcBL_LP4XtEtlK9Jx4/medium_matrix.png

Bruce Gibney (Former Partner @ Founders Fund)
Peter Thiel’s CS183: Startup – Class 8 Notes Essay

Just make an affirmative statement about what you do and why it’s important. SpaceX has a great elevator pitch: “Launch costs haven’t come down in decades. We slash them by 90%. The market is $XXbn.” (Contrast this with: “We’re NASA meets Toyota!”)

Anthony Lee ( Managing Director of Altos Ventures, Marketing @ Evolve Software (acquired), McKinsey)
Why Big, Why Now, Why You? – Altos Ventures

Specifically, there are “3 Whys” that I want to see in every pitch: WHY BIG? WHY NOW? WHY YOU? On Why Now? — this is one that entrepreneurs almost always miss and so it is one that I have come to feel is the most critical. So much of startup success is dictated by good timing

Kris Duggan (CEO and Founder at BetterWorks)
The Second-Timers: Kris Duggan of Betterworks: “This Time, I Generated Leads Before We Even Launched” | SaaStr

If you ask for money, you get advice. If you ask for advice, you get money. I spend 10x more of my time on customers than investors. For example, we don’t have an investor deck here at BetterWorks. If a potential investor wants to talk, I show them our sales deck so they know how we talk with prospects. Thinking that way makes me remember to stop ‘pitching’ and keep listening.

Richard Price (Founder, CEO at Academia.edu)
Guerrilla tips for raising venture capital | VentureBeat | Entrepreneur | by Christina Farr

When pitching a VC, you need to have at your command the macro stats for the industry, because that is how they compare your problem with another idea that someone else is pitching. Intuitions are not enough to make the comparison, and for the partner to pitch his/her colleagues – there needs to be some market data about the size of the market etc.

Ben Yoskovitz (VP Product at VarageSale, VP Product at GoInstant (acquired by Salesforce), Author of Lean Analytics)
“No Marketing” Isn’t as Impressive as You Think

Marketing is learning. If you’re not learning, you’re not making progress. Don’t tell investors that your traction is “without any marketing” because that just means it’s not repeatable and scalable.

David Cancel (CEO, Co-Founder at Drift)
My Golden Rule for Pitching Your Startup or Product

There’s a simple rule I use when pitching a product or even a company to someone. I call it No “and”s. You have to be able to describe your idea in a single sentence without using the word “and. ” The problem with using “and”s is that they often confuse ideas instead of clarifying them.

Alfred Lin (Partner at Sequoia Capital, Former CFO/COO Zappos)
How to Convince Investors

It’s doubly important for the explanation of a startup to be clear and concise, because it has to convince at one remove: it has to work not just on the partner you talk to, but when that partner re-tells it to colleagues.

David Beisel (Co-Founder & Partner at NextView Ventures)
Never Raising Capital Ever Again – GenuineVC

Capital fundraising is to facilitate growth ahead of cash flows generated by the business. If there is truly a huge venture-scale opportunity ahead of a startup, there should be an appropriate cost of capital for future financings to expand which make sense for the company. … perhaps in many cases the desire for the Seed round to be the final round of financing is a tacit signal that it doesn’t have the potential to be “venture scale” after all.

David Cancel (CEO, Co-Founder at Drift)
3 Startup Lessons I Learned the Hard Way

You can only raise money by pitching the “Dream” or by selling “Traction”. So either bootstrap your startup, or raise money in the early “dream” (no code, no plan, just a dream) phase or in the “traction” (the model is working) phase of your business.

David Jackson (Founder, Seeking Alpha)
Pitching to investors: What truly excites you? | A Founder’s Notebook

A pitch to investors doesn’t need to be an exhaustive overview of your business. You need to get investors excited, and you can then follow up with details. And what gets investors excited is probably what gets you excited.

Hunter Walk (Founder & Partner at Homebrew)
Five Mistakes New VCs Make (& How I Tried to Avoid Them) | Hunter Walk

New VCs are vulnerable to fashionable verticals. What are some motivations to chase the market? Groupthink certainly; high volume of new companies in these spaces; perceived appetite for these companies from downstream investors mean you can get some quick markups over next 12 months.

Oren Jacob (Founder & CEO at ToyTalk)
Take Your Fundraising Pitch from Mediocre to Memorable with These Storytelling Tips | First Round Review

You should be able to tell your whole story, in a compelling and detailed fashion, in just 20 minutes. This will almost always expand to fill the hour… At the same time, you want to have hours and hours of nerdy details squirreled away in your head.

Paul Graham (Co-Founder & Partner at Y Combinator)
Black Swan Farming

The two most important things to understand about startup investing, as a business, are (1) that effectively all the returns are concentrated in a few big winners, and (2) that the best ideas look initially like bad ideas.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

The general rule is one business model drives the business. It’s tempting to list multiple revenue streams because you’re trying to prove that you will be big. Yet when consumer internet companies do this, investors generally see a red flag.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Your investment thesis is either concept-driven or data-driven. Which kind you are pitching? In a data pitch, you lead with the data because you are emphasizing how good the data already is. If it’s a concept pitch, on the other hand, there may be data, but the data supports a yet undeveloped concept.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Pitch by analogy. Show, don’t tell. Again, your pitching goals are to increase investors’ confidence in your investment thesis and lead them to a shared view of your company’s problems. To accomplish this, you should show rather than tell whenever possible.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Understand where analogies apply and where they do not. Pitch by analogy but don’t necessarily reason by analogy. When I’m the investor listening to a pitch, one detail I consider is whether the entrepreneur is being too deluded by their analogies and not thinking hard enough about exception cases. It’s better to have no analogy than a bad one.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

When pitching by analogy, anchor your business to other valuable businesses to signal that your business will be valuable, too

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Avoid debating the validity of your analogies. If someone pushes back and tries to challenge elements of an analogy, don’t let yourself get drawn into a back and forth. Analogies are a conceptual framework, so they’re not going to be 100% accurate.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Express your competitive advantage. Why are you going to break out of the pack? What is your advantage? An understanding of product-market fit? Is it a technology advantage? What’s your differential business strategy? Your differential growth strategy? Your differential product?

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Show some maneuverability. Don’t just say that you have five different options. Instead, say that you’re doing one, but you also have some fall-back or maneuvering options.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Ultimately, you’re selling the partnership, so give the individual partner the talking points to be successful. What will that partner tell their partners? Put yourself in their shoes.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

When in doubt, lead with what will make the most sense to investors.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Underpromise and overdeliver. Internally, our team expected that paid members would potentially get access to the whole network, but we had to make sure that the network would be comfortable with this. So we showed four degrees [of seperation] to our investors, to be sure.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Be wary of adjectives and especially adverbs. Anytime you use qualifiers like “very”, you’re overstating your point, which shows that you’re nervous about it. When I’m being pitched as an investor and I see such qualifiers, I make sure to ask questions about those areas because I know the entrepreneur is most nervous about them. It’s okay to be hyperbolic, to be aggressive, to be visionary [but] avoid adverbs and adjectives when possible.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

Explain to them why you are unique (if you are in a larger market). In essence, why did everyone else pass on you?

Bruce Gibney (Former Partner @ Founders Fund)
Peter Thiel’s CS183: Startup – Class 8 Notes Essay

Tell a story – and try to do it first without relying on your deck. People like stories. Our brains are wired to respond them. We recall facts better when they are embedded in narrative. Why did you start your company? What do you want to achieve? Then drape the facts around that skeleton.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
This For That – AVC

We’ve made a few of these investments and some of them have worked out pretty well.Edmodo is Facebook for classrooms. SoundCloud is YouTube for audio.
If you are going to do a “this for that” investment, the first thing you need to make sure is the iconic company (this) is not going to go after this other market (that) themselves. Then you need to make sure the other market (that) is very large. And finally, you need to make sure that the founde… (read more)

Roy Bahat (Head at Bloomberg Beta)
Early startup pitches are like movie pitches, not business pitches — Medium

An early startup pitch might be more like a movie pitch than a business pitch. Early startup investors might be more like Hollywood movie producers or A&R people in music — listening to the tape! — than they are like Actual Businesspeople. The best ones just know what a few bars of good jazz sound like when they hear it.

Bruce Gibney (Former Partner @ Founders Fund)
Peter Thiel’s CS183: Startup – Class 8 Notes Essay

One of the most important things to understand is that, like all people, VCs are different people at different times of day. It helps to pitch as early as possible in the day. This is not a throwaway point. Disregard it at your peril

Bruce Gibney (Former Partner @ Founders Fund)
Peter Thiel’s CS183: Startup – Class 8 Notes Essay

The standard format is stringing together a few well-known products and services that you sort of resemble: “We are Instagram meets TaskRabbit meets Craigslist.” You should reject the standard format.

Amir Elaguizy (CEO Cratejoy, YC Alumni)
58 things I learned at YC – Giftshop Scientist

Don’t pitch from the defensive & don’t start by apologizing

Amir Elaguizy (CEO Cratejoy, YC Alumni)
58 things I learned at YC – Giftshop Scientist

Framing matters a LOT (seed round vs seed extension)

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
What I Wish I Knew Before Pitching LinkedIn to VCs | Greylock Partners

Your investment thesis is either concept-driven or data-driven. Which kind you are pitching? In a data pitch, you lead with the data because you are emphasizing how good the data already is. If it’s a concept pitch, on the other hand, there may be data, but the data supports a yet undeveloped concept.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Talk to your network to evaluate your ideas and evaluate your pitch. The questions you should always ask are: What’s wrong? What’s broken? Why won’t it work? What do you think the risks are? People by default will want to give you good feedback rather than bad, so you have to ask negative questions.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Take competition against your potential revenue streams seriously. Being detailed about your competition, especially listing the specific companies, helps increase investor confidence.

Reid Hoffman (Partner & Co-Founder at Greylock Partners)
LinkedIn’s Series B Pitch to Greylock: Pitch Advice for Entrepreneurs

Be decisive and ship. Including specific dates, for example, shows decisiveness. Being decisive doesn’t mean that you have to stick with your decisions. Good investors expect you to iterate often as you figure out what product will grow your market.

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

VC’s don’t fund mobile app companies anymore. The reason is it’s impossible to get distribution through the iPhone app store or Google Play.

Richard Price (Founder, CEO at Academia.edu)
Guerrilla tips for raising venture capital | VentureBeat | Entrepreneur | by Christina Farr

VCs are looking for the ten-year level of discourse, rather than the six month level of discourse. Being in an investor meeting is actually the one environment where you can let you imagination rip

What’s the best way to get more customers for your product?

David Jackson (Founder, Seeking Alpha)
The three steps to building a great company, and why most startups fail on the first step | A Founder’s Notebook

Why do we move prematurely from “build a product people love” to growth? (i) It’s easier to measure user or revenue growth than it is to measure how much users love your product. (ii) Since sustainable growth is impossible without a successful product, growth metrics assume product success; so we think we can measure product success by measuring growth. (iii) Growth is the true measure of startup success, and entrepreneurs (and particularly VCs) … (read more)

David Jackson (Founder, Seeking Alpha)
If you have low retention, don’t scale and keep your costs low | A Founder’s Notebook

If you have low 90 day retention, then you don’t have product-market fit. But 90 day retention might not be sufficient on its own to demonstrate product-market fit. Consider also user engagement, your net promoter score, whether your product is liked or loved, and the ease of closing sales.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Growth vs Retention – AVC

It’s hard to grow if you are churning your users. You might think you have product market fit and so you scale up your hiring, your marketing, your sales, and your capital raising and spending. But if you can’t retain a healthy percentage of your users past ninety days, you don’t have product market fit yet and all the investment you make in your business is just money down the drain. So focus first on retention, then scale.

Jason Lemkin (Managing Director at Storm Ventures, SaaStr.com)
Jason Lemkin: The Right Metrics For Your SaaS Startup | InsightSquared

Overinvest in customer success – that’s my #1 growth hack. That doesn’t get you to your first 10 or 20 or 100 customers, but that’s the best way to turn those 100 customers into 1,000.

Josh Elman (Partner at Greylock Partners)
Building your growth model and Ladder of Engagement — Medium

Purpose: What is the core purpose of the product? Users: Who will care about that core purpose? Inception: How can I get people to hear about this product for this purpose? Adoption: What does someone need to do to get the product to fulfill this purpose for them? Habit: How frequently should the person use the product, and how can we get them to adopt the habit?

David Jackson (Founder, Seeking Alpha)
Sustainable growth vs. growth hacking | A Founder’s Notebook

Most people think about growth in terms of Acquisition and Activation: “How many signups and activations have we had?” “How can we get more signups and activations?” But they should focus on Retention and Referral: “How can I retain an insanely high percentage of my users?” (= product-market fit); “How can I get them to refer their contacts to my product?” (= virality)

Paul Graham (Co-Founder & Partner at Y Combinator)
Default Alive or Default Dead?

In practice there is surprisingly little connection between how much a startup spends and how fast it grows. When a startup grows fast it’s usually because the product hits a nerve, in the sense of hitting some big need straight on.

David Cancel (CEO, Co-Founder at Drift)
3 Warning Signs That Your Product Sucks

If you repeatedly hear any of the following comments, chances are you are not solving a critical problem [for your customer]: “If you made your app easier to use I would start using it. ” “I’m really busy right now but I’ll start using your app soon. ” “If your app was cheaper I would start using it. “

David Jackson (Founder, Seeking Alpha)
Sustainable growth vs. growth hacking | A Founder’s Notebook

If your growth is all based on hacks, then your growth is a function of how much effort you can keep putting into these hacks. If your growth, which is a derivative of customer base, is itself a function of your customer base, you will grow exponentially. And that growth curve comes without you having to spend money.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Word of mouse

…at the heart of real growth is a simple idea: People decide to tell other people.

Andy Johns (Current VP of Growth at Wealthfront. Formerly growth at Facebook, Twitter, Quora. Ex-EIR Greylock)
Real Engines Of Growth Have Nothing To Do With Growth Hacking | TechCrunch

Understand where your success is coming from today and double down on what is already working. If these channels are working for you without any real effort on your part, then there are huge opportunities to expand on them.

Andy Johns (Current VP of Growth at Wealthfront. Formerly growth at Facebook, Twitter, Quora. Ex-EIR Greylock)
Real Engines Of Growth Have Nothing To Do With Growth Hacking | TechCrunch

Real growth is about finding and removing friction. The opportunities to eliminate friction are usually huge… they can take years to fully uncover.

David Jackson (Founder, Seeking Alpha)
Andy Johns on how to build a winning product | A Founder’s Notebook

Be clear about your target user. Force yourself to articulate your value proposition. Double down on what’s working by removing frictions.

David Jackson (Founder, Seeking Alpha)
The three steps to building a great company, and why most startups fail on the first step | A Founder’s Notebook

In my experience, the most common fatal error made by entrepreneurs (often encouraged by their VCs) is to focus insufficiently on building a product users love. We move from core product development to growth — prematurely. This is a mistake we’ve made numerous times in Seeking Alpha.

David Sacks (CEO at Zenefits)
New Sales Models – David Sacks, Founder and CEO of Yammer – YouTube

You have to innovate on distribution, not just product. Do you have a viral strategy? Do you have a platform strategy? Do you have an embed strategy? At PayPal, we had a viral strategy for acquisition through email. We bootstrapped off the eBay platform, and we embedded PayPal logos on eBay auctions.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Winback Campaigns vs New Customer Acquisition – AVC

As mobile becomes a more difficult environment to grow in (maturing market, more competition, growing dominance of the leaders), we see companies spending more and more money on new customer acquisition. While that is necessary, it is not likely the most capital efficient way to grow. Winning back churned out users can be a lot more cost effective if done right.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Retention – AVC

You can email or spam in some other way your inactive users and that might work. But what you do once they come back is way more important. You have to figure out how to make the experience better than it was when they used it previously. Some of that will likely be that the product is much better because your and your team have improved it a lot. But some of that should be an engaging experience that somehow they did not get before.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Fallacy Of Zero Sum Game Thinking – AVC

The cool thing about these marketplaces is that the sellers (or project creators in Kickstarter’s case) are the primary marketing engine. Sellers bring the first time buyers. And then many of them stick around and transact again and again, often with sellers other than the one that brought them in the first place. It is a commons where everyone (or most everyone) benefits from the expansion of the marketplace.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Search Vs Social – AVC

At some point, I became convinced that websites would eventually see more acquisition traffic coming from social than they were seeing from search, which was the king dog of Internet traffic at the time. It was a hotly debated issue but, again maybe because of how long we were on Twitter, I was convinced social would be king some day. It’s kind of funny to think that we wondered and debated about such things back in 2008 and 2009. It’s not a deba… (read more)


Fred Wilson (Co-Founder and Partner at Union Square Ventures)
OccupyAppStore – AVC

“”We can’t figure out how to get on the leaderboards. The app stores aren’t working for us as a distribution channel.””
To which I replied “”All the app stores use a leaderboard model which makes the rich richer and everyone else poorer. We are in the 99%, wishing we were in the 1%.””

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: “Our biggest problem is awareness”

If your startup, your non-profit or your event is suffering because of a lack of awareness, the solution isn’t to figure out some way to get more hype, more publicity or more traffic. …the solution lies in re-organizing your systems, in re-creating your product or service so that it becomes worth talking about…you can dramatically impact the ‘more awareness’ problem by investing heavily in a funnel that doesn’t leak, in a story that’s worth s… (read more)

Sam Altman (President at Y Combinator)
Startup Playbook

Ask your [power user and really good] customers where you can find more people like them.

Rob Go (Co-Founder and Partner at NextView Ventures)
Very Basic Startup Marketing – ROBGO.ORG

The best marketing is customer success. That’s why I think it’s incredibly important that the functions of product and marketing not be thought of as two silos. The job is not done when you’ve gotten someone to pay. It is done when you have delighted a customer to the point that they can’t help but tell others about you.

Rob Go (Co-Founder and Partner at NextView Ventures)
Ain’t Nothing Like The Real Thing – ROBGO.ORG

I’ve been on a bit of a quiet campaign to meet a bunch of really strong user-acquisition folks at different startups in Boston and New York. One thing that is surprising is that many of these people have limited marketing experience. What they do have is a highly analytical background and a mentality around experimentation. On the flip side, more experienced marketers often enter a startup setting wanting to employ an older playbook to stick to t… (read more)

Sam Altman (President at Y Combinator)
Startup Playbook

Experiment with different user acquisition methods like SEO/SEM, ads, mailings, etc. , but try to repay your customer acquisition cost (CAC) in 3 months.

Avrom Gilbert (COO Seeking Alpha)
Israel’s Subscription Challenge

It’s likely that at some point you will reach a point with your customer acquisition cost where it will be hard to improve it significantly. However, if you keep improving your product then your lifetime user value can keep growing indefinitely, which keeps growing your net lifetime user value. This in turn means that you can choose to increase profit or, more likely, spend more to take more market share (even at the risk of increasing your custo… (read more)

Tomasz Tunguz (Partner at Redpoint Ventures)
How Customer Success Meaningfully Reduces Cost of Customer Acquisition

When discussing customer success for SaaS startups, the conversation focuses mostly on retaining customers and reducing churn. These are two fantastic benefits with meaningful return-on-investment. But great customer success organizations can meaningfully impact another critical part of the customer lifecycle, customer acquisition, by catalyzing evangelists to refer new customers.

Sam Altman (President at Y Combinator)
Premature optimization – Sam Altman

The most sustainable (and cheapest) kind of growth is word-of-mouth growth. It’s dangerous to spend all your mental energy on incremental improvements when what you really need is a step change.

Sam Altman (President at Y Combinator)
Startup Playbook

If you have a free product, don’t plan to grow by buying users. that’s really hard for ad-supported businesses. You need to make something people share with their friends.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Mobile Downturn (continued) – AVC

So if you want to launch a new consumer mobile app, what do you do? The best answer I have heard to that question came at breakfast yesterday with an entrepreneur. He said he plans to build mobile web experiences that can go viral and build adoption of his product and use that as a funnel to drive adoption, over time, to his native apps. I’ve seen that work.

Sachin Rekhi (Group Product Manager at LinkedIn)
How to Find Your Ideal Customer | Sachin Rekhi

Take an inward look at your existing customers, using available customer registration data, your analytics tool’s demographic segmentation capabilities, customer surveys, tools like FullContact, Clearbit, Pipl, ZoomInfo, and MaxMind’s IP Address database, and interviews with sales reps, account managers, and customer service reps.

Sachin Rekhi (Group Product Manager at LinkedIn)
How to Find Your Ideal Customer | Sachin Rekhi

Determine the most meaningful attributes by which you can segment and cluster your candidate customers. Some of the most common segmentation attributes include use case, role, demographics, firm characteristics, and psychographic

Sachin Rekhi (Group Product Manager at LinkedIn)
How to Find Your Ideal Customer | Sachin Rekhi

Evaluate the attractiveness of each of your determined customer segments based on attributes that you’ve developed. Typical evaluation criteria include segment size, resonance with value proposition, willingness to pay, strongest delivered value, acquisition strategy, and strategic fit.

David Jackson (Founder, Seeking Alpha)
Why mobile traction is getting harder, not easier | A Founder’s Notebook

It’s hard to acquire meaningful numbers of new app users from app stores and other marketing channels. In contrast, over 500,000 dedicated users of our website downloaded our app in 2013, and we expect that number to increase in 2014.

David Sacks (CEO at Zenefits)
New Sales Models – David Sacks, Founder and CEO of Yammer – YouTube

I believe in the law of successful distribution arbitrage. Successsful distribution techniques are copied until they are no longer unusally effective. That’s why this is such a tough problem. Overtime users get used to techniques and they become less effective. The same techniques that got LinkedIn or Facebook to millions of users would not work today.

Paul Graham (Co-Founder & Partner at Y Combinator)
Default Alive or Default Dead?

Founders tell themselves they need to hire in order to grow. In fact the large staffs of successful startups are probably more the effect of growth than the cause. And partly because when founders have slow growth they don’t want to face what is usually the real reason: the product is not appealing enough.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Bootstrap Your Network With A High Value Niche Use Case – AVC

So if you want to build a peer to peer network, you have to find the use case that is high enough value that some people will do things (like put content into your application) that most people won’t. If you nail that, and win the hearts and minds and activity of that small high value user base, then you will have to opportunity to go mainstream. If you aim for the mainstream users first, you are setting yourself up for failure.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Mobile Web Is Top Of Funnel, Mobile App Is Bottom Of Funnel – AVC

Mobile web unique visitor growth is faster than mobile app visitor growth and the lines are diverging. This is because your mobile website is the top of the funnel for your user acquisition on mobile. It is where people land when coming from search, email, social media, text links, etc, etc.
The mobile web scales much better. You can build a large audience on mobile web much more easily than via mobile apps.

What’s the best way to create your product strategy?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
A Roaming Network For Subscription Music Services – AVC

Roaming is a great solution to the problem when multiple businesses offer a proprietary commodity service. The customer is forced to choose one provider but in effect the service is identical from vendor to vendor.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Learning From Brian – AVC

Photos are the killer content type on mobile. Quick to consume like text, but easier to produce on a phone. Pay attention to what Apple does. It is more important than you think. Tech is fashion as much as you don’t want to admit it.
If you insist on using everything we invest in, we will miss important things (Tinder).

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Mobile Downturn (continued) – AVC

doing anything in the consumer mobile space these days is super hard. i can’t think of many consumer facing mobile apps that have gained massive traction and sustained it in the past three years. can you?

Rob Go (Co-Founder and Partner at NextView Ventures)
Very Basic Startup Marketing – ROBGO.ORG

“Swiss army knife” products rarely work. You hopefully create a raving fan by being an amazing scalpel for a particular problem. Then, that person will tell everyone else who needs a scalpel that you are a great solution. Then, the person who hears the same recommendation 3-5 times, will finally give you a try. That’s much harder to do if you are trying to be all things for all people.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Flipping The Model – AVC

I’ve written this before, but I think things like Bluetooth, Airplay, and Chromecast are the better model for getting content from the Internet onto TVs and into cars.
TVs and cars are expensive, you don’t replace them very often, and it takes time to get a new model designed, built, and into the market.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Special orders don’t upset us

You ask the waiter to bring you the mackerel, but without the teriyaki glaze. He says, “the menu says no substitutions, I’m sorry.” There’s absolutely nothing wrong with running an establishment around the idea that it is what it is, here it is, you can have it if you want to buy it. You ask the waiter to bring you the mackerel, but without the teriyaki glaze. He says, “Certainly. Is there anything else I can offer to make it even more to your … (read more)