4 ms·

in a settting like 37s is talking about, funding probably means seed/angel funding. How much control/influence do you think these types of investors have? The

in a settting like 37s is talking about, funding probably means seed/angel funding. How much control/influence do you think these types of investors have? They have a minority stake, rarely have a board seat, etc. It's easy/popular to blame bad products on investors, but usually that's pretty unfair. I think (at the seed stage) it's usually due to the founders. I think better advice might be "don't take so much money that you have to give up early control." It seems to me that a well-run angel funded startup will get to market quicker and have a slightly bigger (and potentially quicker) exit if the founders play their cards right. So you trade a small minority stake for getting "there" (wherever there is) months or years sooner as well as having a slightly better shot at a win due to investor influence. This all assumes a goal of eventual liquidity, of course.

fallentimes 18y ago
Did Rescuetime take angel funding?
- tptacek 18y ago
  YC.
  - fallentimes 18y ago
    I know; I mean in addition to YC.
- webwright 18y ago
  Yes, we're wrapping up a small round right now. We have some pretty awesome guys involved-- we're very excited.
tptacek 18y ago
You know, people talk about "angel" and mean a bunch of different things. Maybe you're right, but maybe not. There are "angel rounds" like YC that just get things started. I'm not worried that Paul Graham is going to exert undue influence over your company. Once the 20k is spent, what's he going to do? Write a nasty essay? But there are also a lot of "angel rounds" that provide runway. They're much smaller than "A Rounds" --- mid-low hundred thousands --- but it's just like an A-round, for 2-4 people. Those investors control the agenda. And in both cases, the real issue isn't what happens after you get funded. It's what they make you do prior to funding you.
- webwright 18y ago
  Yaw, I wouldn't ever call YC an angel round. Whether you call it an angel round or a seed round, I don't quite understand how the investors control the agenda. My experience (which at this point is fairly intimate) with sub-$1m rounds is that you generally give up 20-30% of your company and no board seats. In the rare event that an investor takes a board seat, you can generally argue for the board should reflect the cap table and there will be 2 co-founders on the board and 1 investor. Of course, all things are different and some investors can be predatory. Now, when you get into big Series A/B country, I think things change. Board seats start flying around and the founders can lose control. But in the first round of mid-low hundred thousands? Not that I've usually seen. Prior to funding (an interesting point) I haven't seen any influence whatsoever. We've marched to the beat of our own drum, clearly explained the vision we have for the company, and taken advice/feedback when we agreed with it. I HAVE heard of investors saying stuff like, "I'll invest IF you go in the direction that I want".

fallentimes 18y ago

Did Rescuetime take angel funding?

tptacek 18y ago
YC.
- fallentimes 18y ago
  I know; I mean in addition to YC.
webwright 18y ago
Yes, we're wrapping up a small round right now. We have some pretty awesome guys involved-- we're very excited.

tptacek 18y ago

You know, people talk about "angel" and mean a bunch of different things. Maybe you're right, but maybe not. There are "angel rounds" like YC that just get things started. I'm not worried that Paul Graham is going to exert undue influence over your company. Once the 20k is spent, what's he going to do? Write a nasty essay? But there are also a lot of "angel rounds" that provide runway. They're much smaller than "A Rounds" --- mid-low hundred thousands --- but it's just like an A-round, for 2-4 people. Those investors control the agenda. And in both cases, the real issue isn't what happens after you get funded. It's what they make you do prior to funding you.

webwright 18y ago
Yaw, I wouldn't ever call YC an angel round. Whether you call it an angel round or a seed round, I don't quite understand how the investors control the agenda. My experience (which at this point is fairly intimate) with sub-$1m rounds is that you generally give up 20-30% of your company and no board seats. In the rare event that an investor takes a board seat, you can generally argue for the board should reflect the cap table and there will be 2 co-founders on the board and 1 investor. Of course, all things are different and some investors can be predatory. Now, when you get into big Series A/B country, I think things change. Board seats start flying around and the founders can lose control. But in the first round of mid-low hundred thousands? Not that I've usually seen. Prior to funding (an interesting point) I haven't seen any influence whatsoever. We've marched to the beat of our own drum, clearly explained the vision we have for the company, and taken advice/feedback when we agreed with it. I HAVE heard of investors saying stuff like, "I'll invest IF you go in the direction that I want".