Venture Hacks

Bill Burnham, hedge fund manager and former VC:
“Angel investors are becoming the dominant force in Consumer Internet Venture capital. The vacuum created by the withdrawal of VCs from traditional Seed and Series A opportunities in the Consumer Internet space has been filled by a motley collection of angel investors. It is angel investors, not [...]

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Naval and I recently put together a talk for AngelConf, a conference for new angel investors. The conference was organized by Y Combinator and included an great group of notable angels like Ron Conway. According to the AngelConf website,
“Investing in startups seems mysterious and difficult. How much are you supposed to invest? What [...]

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A reader asks:
“I’m an entrepreneur looking for seed investment. All I have right now is an idea and a pitch. I’m presently pitching friends and family and it has been very positive. Do you know any other idea investors I should approach?”
Larry and Sergey had a product and traction before they got their first check [...]

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Todd Vernon, the CEO of Lijit, has written a great article on raising money from angels. I especially like his taxonomy of angels:
“The Family Investor: The Family Investor is likely not really a classic Angel Investor at all but rather a supportive family member that “knows you”. Their motivation is likely out of support (sometimes [...]

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Summary: Here are 3 microhacks for finding a lead investor: (1) If followers have good reasons to not lead, ask them for introductions to potential leads. (2) If you’re early stage, find seed investors who invest in people and high risk startups. (3) If every prospective investor says “we don’t know the market,” find investors [...]

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“Those kind of ‘sit on the sideline’ investors are worthless to you if you want to get a financing done… if you are raising a financing of any kind, spend all of your time looking for a lead investor.”
— Fred Wilson, Union Square Ventures
Summary: Financings happen when you find a lead investor, negotiate a term [...]

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Q: Should I raise money from VCs or angels, all things being equal?
There is no prototypical VC or angel. Instead of pitting VCs versus angels, consider their perceived pros and cons and choose the best available investor.
Angels are perceived to have less money, invest for fun, make their investment decisions quickly, and not ask for [...]

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Summary: Angels make more introductions than VCs because angels need co-investors. You can’t clear the market in series–you can only clear it in parallel. Tranches are dumb–they have zero upside and catastrophic downside. Two investors aren’t always better than one. Finally, a ‘very special’ message to graduating Y Combinator founders: don’t do deals on D-Day [...]

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“You cannot clear the market in series.”
– Office Hours
“Investors move in herds that are steered by scarcity and social proof.”
– Office Hours
Summary: This article includes audio and notes from our first office hours. Topics include selling 51% of the company, dead equity, and setting good terms with angels.
Yesterday, we held our first office hours via [...]

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