Venture Hacks

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?”
Investors want to see products and preferably traction unless you already have a significant [...]

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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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Here are more frequently asked questions about advisors. See Part 1 for the rest. If you have more questions, email us at ask@venturehacks.com.
Frequently Asked Questions
General (from Part 1)

What do advisors do?
Should I put together a board of advisors?
How do I get good advice?
How do I apply advice?
How do I find advisors?
How can I tell if [...]

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Summary: Here are 2 more microhacks for finding a lead investor: (4) Incent followers to lead by telling them the truth: there probably won’t be room in the round for followers. (5) The best way to find a lead is to build something that attracts a lead: keep building your company and reducing risk.
In parts [...]

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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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