If you’re raising money for your startup, you want Paul Graham’s essay taped to your bathroom mirror.
Graham’s “How to Raise Money” is the best advice our startup had while raising funds, even though we tried to ignore it.
It’s all great advice:
Be in fundraising mode or not. Hear no until you hear yes. Get the first commitment.
Buuuut… when you’re a founder trying to raise money for your startup, it’s great advice that you WILL pretend doesn’t apply to you at some point during the process.
What I learned raising money for our company is that the sooner you commit Graham’s advice to memory, the faster you’ll close the round. Start here: http://www.paulgraham.com/fr.html
Here are the lessons I had to keep reminding myself:
- Be in fundraising mode or not. If you’re fundraising, it’s a LOT of your job. And to do that job, you’ll be giving up other important parts of your job like sales. So don’t be sorta raising money, a little bit kinda. (Also: investment vehicles with rolling deadlines like SAFE Notes will make this more difficult. Set your own deadline and be done with it.)
- Hear no until you hear yes. Most funders truly want to be helpful, kind, and encouraging. Because of this, they might make you feel like they’re going to say yes when they are in fact going to pass. Don’t mistake kindness for commitment.
- Get the first commitment. It doesn’t matter how awesome your pitch deck is. It will never be as good as another investor saying “listen, I’m not going to let this one pass me by. You should get in!” Get someone to say yes, then ask for their help.
Graham’s wisdom is backed up of course because he founded Y Combinator and watched hundreds of startup founders build and fund their companies. He cuts through, and tells you quickly what you need to KEEP remembering while you’re raising funds for your company.