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Many seed-stage investors don't require introductions. For instance, most companies that YC funds were not introduced or previously known, they just submitted a

by tlb 10y ago

Many seed-stage investors don't require introductions. For instance, most companies that YC funds were not introduced or previously known, they just submitted a compelling application. By the time a company is ready for series-A (where Andreessen invests), companies normally have a connection to someone (investors, customers, lawyers) who can make an intro. See http://www.paulgraham.com/fr.html http://www.paulgraham.com/fr.html under "Get introductions to investors" for some tactics. Angel investors have a huge incentive to find companies with good businesses but no VC connections, invest personally, and then introduce them to their VC contacts for further investment. (That huge incentive is a 10 - 1000x return on their investment). So there are quite a few people scouting for these opportunities. But I'd be curious to hear about examples where this doesn't work.

timanglade 10y ago
It’s worth noting that a16z does invest at the seed stage — a lot actually http://a16z.com/portfolio/seed/ http://a16z.com/portfolio/seed/ although you certainly don’t have to get to them at that stage.
sage76 10y ago
Someone correct me if I am wrong, but weren't some stats released a while back that said that 50% of the startups accepted by YC had been referred to them by the YC alumni network?
- deleted 10y ago
  [deleted]
- tlb 10y ago
  54.7% of accepted companies in the last batch did not have a recommendation. http://themacro.com/articles/2016/09/common-misconceptions-about-applying-to-yc/ http://themacro.com/articles/2016/09/common-misconceptions-a...
- antaviana 10y ago
  It was not 50% but 45.3%
cocktailpeanuts 10y ago
I don't know where you came up with the "Many seed-stage investors don't require introductions" theory, but you're mistaken. First, the example you use--YC--is not even seed stage. It's an incubator, and is one of the extremely few opportunities where "just submit a compelling application" works. Also, this is not even about angel investing. All business deals involve human beings and people tend to trust people who came through an intro. It's the law of nature. It's naive to think that angel investors are just clamoring to fund any random startup just because they have no connection to VCs. From my experience it's very rare to find investors who don't have herd mentality--nothing wrong with that, they're just being human.
- argonaut 10y ago
  YC is seed stage - they invest 120k. That's what seed stages have traditionally been. We just see so many $1-4 million "seed stage" investments nowadays that we're all used to it.
  - cocktailpeanuts 10y ago
    Not in the context of this thread. The main point of what OP said was YC doesn't require intro because you can get money by "just submitting a compelling application". I don't know of any serious seed investor who operate this way. This model works because YC is an incubator. That's their shtick and it works for them. But most angel investors can't do that. That's why they rely on humans
    - argonaut 10y ago
      "Not in the context of this thread" isn't a good excuse. They are the exception to the context of this thread. 120k is very much an angel-like investment.
      - deleted 10y ago
        [deleted]
- 11thEarlOfMar 10y ago

by tlb 10y ago

timanglade 10y ago

It’s worth noting that a16z does invest at the seed stage — a lot actually http://a16z.com/portfolio/seed/ http://a16z.com/portfolio/seed/ although you certainly don’t have to get to them at that stage.

sage76 10y ago

Someone correct me if I am wrong, but weren't some stats released a while back that said that 50% of the startups accepted by YC had been referred to them by the YC alumni network?

deleted 10y ago
[deleted]
tlb 10y ago
54.7% of accepted companies in the last batch did not have a recommendation. http://themacro.com/articles/2016/09/common-misconceptions-about-applying-to-yc/ http://themacro.com/articles/2016/09/common-misconceptions-a...
antaviana 10y ago
It was not 50% but 45.3%

cocktailpeanuts 10y ago

I don't know where you came up with the "Many seed-stage investors don't require introductions" theory, but you're mistaken. First, the example you use--YC--is not even seed stage. It's an incubator, and is one of the extremely few opportunities where "just submit a compelling application" works. Also, this is not even about angel investing. All business deals involve human beings and people tend to trust people who came through an intro. It's the law of nature. It's naive to think that angel investors are just clamoring to fund any random startup just because they have no connection to VCs. From my experience it's very rare to find investors who don't have herd mentality--nothing wrong with that, they're just being human.

argonaut 10y ago
YC is seed stage - they invest 120k. That's what seed stages have traditionally been. We just see so many $1-4 million "seed stage" investments nowadays that we're all used to it.
- cocktailpeanuts 10y ago
  Not in the context of this thread. The main point of what OP said was YC doesn't require intro because you can get money by "just submitting a compelling application". I don't know of any serious seed investor who operate this way. This model works because YC is an incubator. That's their shtick and it works for them. But most angel investors can't do that. That's why they rely on humans
  - argonaut 10y ago
    "Not in the context of this thread" isn't a good excuse. They are the exception to the context of this thread. 120k is very much an angel-like investment.
    - deleted 10y ago
      [deleted]
11thEarlOfMar 10y ago