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> The only thing required to raise a seed round is to convince people who have money to give you money One of the huge issues I see is experienced (at least a

> The only thing required to raise a seed round is to convince people who have money to give you money One of the huge issues I see is experienced (at least a subset "prestige") investors have the terms best suited to startups succeeding. I've seen less experienced investors have draconian (almost nonsense) terms -- crazy terms that probably hurt their investments considerably. However, these investors are less accustomed to managing risk in a technology startup. This is much, much less common in the SFBA ecosystem. However, if you look globally the startup investor maturity can be really poor.

paulsutter 8y ago
If you’re not willing to walk away, you’re going to pay retail. Good terms happen when you have multiple interested investors, bad terms happen when you don’t. That said, investment is difficult if you’re in a place that has few exits (anywhere but Silicon Valley or Beijing/Shanghai). Investors are motivated by the percent chance of an exit, and that chance is higher in the Bay Area than in most places. The chance for exit drops off a pretty steep curve as you go down the “top cities” list (I live in Seattle so apologies to the local scene).
- jwilliams 8y ago
  > The chance for exit drops off a pretty steep curve as you go down the “top cities” list. Exactly. Which either means you're either: going to get a bad/mixed bag on terms -or- you need to raise in one of those cities as an outsider.
  - deleted 8y ago
    [deleted]
  - paulsutter 8y ago
    Raising as an outsider works just fine if you have traction. As if you don’t, why would you be trying to raise money?
DoreenMichele 8y ago
Getting a seed round is a form of negotiating. If you know very little about negotiating, it would be a good idea to read up before you do anything so high stakes. Two good books that are research based: Getting to Yes The mind and heart of the negotiator The first is a quick and easy read. The second is much meatier. They were both required texts for a college class I had on the subject.
- rpeden 8y ago
  I've found Never Split the Difference to be a good complement to the two books you mentioned. It offers some additional approaches that might work well when negotiating startup financing.

paulsutter 8y ago

If you’re not willing to walk away, you’re going to pay retail. Good terms happen when you have multiple interested investors, bad terms happen when you don’t. That said, investment is difficult if you’re in a place that has few exits (anywhere but Silicon Valley or Beijing/Shanghai). Investors are motivated by the percent chance of an exit, and that chance is higher in the Bay Area than in most places. The chance for exit drops off a pretty steep curve as you go down the “top cities” list (I live in Seattle so apologies to the local scene).

jwilliams 8y ago
> The chance for exit drops off a pretty steep curve as you go down the “top cities” list. Exactly. Which either means you're either: going to get a bad/mixed bag on terms -or- you need to raise in one of those cities as an outsider.
- deleted 8y ago
  [deleted]
- paulsutter 8y ago
  Raising as an outsider works just fine if you have traction. As if you don’t, why would you be trying to raise money?

DoreenMichele 8y ago

Getting a seed round is a form of negotiating. If you know very little about negotiating, it would be a good idea to read up before you do anything so high stakes. Two good books that are research based: Getting to Yes The mind and heart of the negotiator The first is a quick and easy read. The second is much meatier. They were both required texts for a college class I had on the subject.

rpeden 8y ago
I've found Never Split the Difference to be a good complement to the two books you mentioned. It offers some additional approaches that might work well when negotiating startup financing.