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>To founders, the behavior of investors is often opaque — partly because their motivations are obscure, but partly because they deliberately mislead you. YC it

>To founders, the behavior of investors is often opaque — partly because their motivations are obscure, but partly because they deliberately mislead you. YC itself is opaque. All their rejection emails are a simple "sorry, we can't tell you". I don't know if they are afraid of legal liabilities or the reasons are much more mundane : "It's been 2 years and your revenue is only $2k", "AI is overhyped", "Too small a market", "You look dodgy" etc. >Don't raise money unless you want it and it wants you. I wish I knew this before I went on a wild goose chase for angels. The only two startup articles I read are either PG or indiehackers and I am impressed with how clear and lucid this dude is with his words.

pmiri 8y ago
> I am impressed with how clear and lucid this dude is with his words. Just about my favorite thing about good business writers is that, just like in a good sale or pitch, they communicate clearly, concisely, and with a serious economy of words. Conversely, never trust a business person who can't write a simple article.
yeukhon 8y ago
> Don't raise money unless you want it and it wants you. But this is pretty much the whole point and most startups DO need money because without it nobody can hire anyone.
- sergiosgc 8y ago
  You can make money the old fashioned way, by selling stuff someone wants, and then use it to hire staff.
  - arsalanb 8y ago
    Yeah, but initially you make very little money. To make more money (at least enough to hire somebody), you need to improve your product or sell it to way more people, for which you need money. Often times you even need money to build your product in the first place.
    - goatherders 8y ago
      The VAST majority of companies- including those in tech- dont raise money. They earn it through sales and use that to hire people.
      - yeukhon 8y ago
        Dropbox would not be possible without raising money. Airbnb would not be possible without raising money first. Uber would not have been possible without raising money. Some of them can make revenue from the get-go, some can't. But the truth is most of them would not have survived this long without first round of seed money.
        goatherders 8y ago
        You listed 3 multi billion dollar businesses. Those are the exception in the business-owner community.
        yeukhon 8y ago
        Not really. They were just another startup at the beginning.
      - jacques_chester 8y ago
        Pretty much every "start your own business" class sponsored by governments and schools talks in great detail about how to get a bank loan.
  - rytill 8y ago
    You don’t see the catch-22? Or do you believe that no startups require a staff of more than a few cofounders to build their product?
somehuman 8y ago
That wasn't my experience with YC. We were rejected after an onsite meeting and got a personal email from a partner with clear reasons about their concerns. If you're referring to the pre-onsite stage though, it's not too surprising since they have a huge number of applicants to filter through. The resources needed to give everyone an individual, delicately worded response would be enormous.
baxtr 8y ago
Am I the only one who thinks that the second quote is just content-free and super-generic? (Haven’t read the whole thing, so maybe he goes into explaining it)
- iamwil 8y ago
  >Don't raise money unless you want it and it wants you. The context is that when you're in Silicon Valley, the upside is you have lots of people that understand what you're trying to do, and a support network that helps you do what you're afraid to admit to yourself that you're capable of. The downside is it's easy to do what all your friends are doing. If you see your friends raising, you might feel compelled to raise as well. Some people jump in without really thinking it through. Reality is, money comes with strings and expectations. Too many people raise without understanding what that is, and suffer the consequences when they put their sweat and tears into their company.
tptacek 8y ago
No, this isn't a valid comparison. YC gives an actual answer. If you don't get in to a YC batch, you know you're not in. What's more, pretty much everyone finds out at the same time, on a well-defined schedule. That's not at all what raising from VC firms is like. VCs rarely tell companies "no"; in fact, they say the opposite: "we'd love to fund you, let's keep moving down the path to us funding you, here are some next steps". They will do this indefinitely, and continue long after the decision not to fund you has been made. That's what Paul Graham is talking about.
- jacques_chester 8y ago
  I see fundraising as having the same dynamics as dating or job hunting. If someone wants to date you or hire you, they will make an effort. They will respond quickly. They make genuine counter-offers ("How about Monday instead?"). If they are lukewarm, they will string you along and eventually fade. They will never make counter-offers, just reject your offers and let you make the next one ("I can't on Tuesday"). If they are not interested, they won't reply in the first place. When someone wants you it's obvious. And when they don't, it's obvious by omission. It's sad that it took me so much time and heartache to work this out.
  - danenania 8y ago
    Yep, this is why people who are really good at this advise a breadth-first search that very quickly narrows in on the people who show real enthusiasm. Though it can be hard to accept when you're in the thick of fundraising, anything less than obvious enthusiasm is a no 99.9% of the time. Think about it from the other side: if you were seriously considering making a company one of the few per year that you give millions of dollars, would you ignore their emails or cancel meetings at the last minute or sound bored on the phone? Investors get just as excited about a company they like as founders do about an interested investor or potential big customer.
  - joering2 8y ago
    You realize some or many people are disgenuine - why you being sad? Isn’t it great that now you know and you can recognize this quickly and take advantage of what you know and quickly move forward?

pmiri 8y ago

> I am impressed with how clear and lucid this dude is with his words. Just about my favorite thing about good business writers is that, just like in a good sale or pitch, they communicate clearly, concisely, and with a serious economy of words. Conversely, never trust a business person who can't write a simple article.

yeukhon 8y ago

> Don't raise money unless you want it and it wants you. But this is pretty much the whole point and most startups DO need money because without it nobody can hire anyone.

sergiosgc 8y ago
You can make money the old fashioned way, by selling stuff someone wants, and then use it to hire staff.
- arsalanb 8y ago
  Yeah, but initially you make very little money. To make more money (at least enough to hire somebody), you need to improve your product or sell it to way more people, for which you need money. Often times you even need money to build your product in the first place.
  - goatherders 8y ago
    The VAST majority of companies- including those in tech- dont raise money. They earn it through sales and use that to hire people.
    - yeukhon 8y ago
      Dropbox would not be possible without raising money. Airbnb would not be possible without raising money first. Uber would not have been possible without raising money. Some of them can make revenue from the get-go, some can't. But the truth is most of them would not have survived this long without first round of seed money.
      - goatherders 8y ago
        You listed 3 multi billion dollar businesses. Those are the exception in the business-owner community.
        yeukhon 8y ago
        Not really. They were just another startup at the beginning.
    - jacques_chester 8y ago
      Pretty much every "start your own business" class sponsored by governments and schools talks in great detail about how to get a bank loan.
- rytill 8y ago
  You don’t see the catch-22? Or do you believe that no startups require a staff of more than a few cofounders to build their product?

somehuman 8y ago

That wasn't my experience with YC. We were rejected after an onsite meeting and got a personal email from a partner with clear reasons about their concerns. If you're referring to the pre-onsite stage though, it's not too surprising since they have a huge number of applicants to filter through. The resources needed to give everyone an individual, delicately worded response would be enormous.

baxtr 8y ago

Am I the only one who thinks that the second quote is just content-free and super-generic? (Haven’t read the whole thing, so maybe he goes into explaining it)

iamwil 8y ago
>Don't raise money unless you want it and it wants you. The context is that when you're in Silicon Valley, the upside is you have lots of people that understand what you're trying to do, and a support network that helps you do what you're afraid to admit to yourself that you're capable of. The downside is it's easy to do what all your friends are doing. If you see your friends raising, you might feel compelled to raise as well. Some people jump in without really thinking it through. Reality is, money comes with strings and expectations. Too many people raise without understanding what that is, and suffer the consequences when they put their sweat and tears into their company.

tptacek 8y ago

No, this isn't a valid comparison. YC gives an actual answer. If you don't get in to a YC batch, you know you're not in. What's more, pretty much everyone finds out at the same time, on a well-defined schedule. That's not at all what raising from VC firms is like. VCs rarely tell companies "no"; in fact, they say the opposite: "we'd love to fund you, let's keep moving down the path to us funding you, here are some next steps". They will do this indefinitely, and continue long after the decision not to fund you has been made. That's what Paul Graham is talking about.

jacques_chester 8y ago
I see fundraising as having the same dynamics as dating or job hunting. If someone wants to date you or hire you, they will make an effort. They will respond quickly. They make genuine counter-offers ("How about Monday instead?"). If they are lukewarm, they will string you along and eventually fade. They will never make counter-offers, just reject your offers and let you make the next one ("I can't on Tuesday"). If they are not interested, they won't reply in the first place. When someone wants you it's obvious. And when they don't, it's obvious by omission. It's sad that it took me so much time and heartache to work this out.
- danenania 8y ago
  Yep, this is why people who are really good at this advise a breadth-first search that very quickly narrows in on the people who show real enthusiasm. Though it can be hard to accept when you're in the thick of fundraising, anything less than obvious enthusiasm is a no 99.9% of the time. Think about it from the other side: if you were seriously considering making a company one of the few per year that you give millions of dollars, would you ignore their emails or cancel meetings at the last minute or sound bored on the phone? Investors get just as excited about a company they like as founders do about an interested investor or potential big customer.
- joering2 8y ago
  You realize some or many people are disgenuine - why you being sad? Isn’t it great that now you know and you can recognize this quickly and take advantage of what you know and quickly move forward?