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If you're opening a sandwich shop, that's totally reasonable, but it's an unnecessary limitation for technology companies -- there are so many more unknowns. Co

by paul 19y ago

If you're opening a sandwich shop, that's totally reasonable, but it's an unnecessary limitation for technology companies -- there are so many more unknowns. Companies like Google and PayPal certainly didn't start off with a viable plan for profit. Perhaps that is why these angel networks have failed to fund any truly significant technology company. They're probably great for funding sandwich shops though...

edw519 19y ago
True, but not consistent with the theme of "risk aversion" cited in the source. For each Google or Paypal, how many startups without a "viable plan for profit" failed? Hundreds? Thousands? More? Just because a high tech startup has taken the time to pound the pavement and get a little traction BEFORE seeking funding doesn't put them in the same class as sandwich shops.
- vlad 19y ago
  I don't think Paul is introducing a new argument such that if a high tech startup starts making money before seeking investment that they are in same class as sandwich shops are. It looks like he's just pointing out examples that disagree with your post (that every company needs to have that strategy.) He then suggests that maybe such Angel networks are behind the times and have unrealistic expectations, if they expect companies with customers, income, and a proven business plan to go to them for $200-300K when those may be ready to contact Silicon Valley VC's for millions. I can see why Paul believes this isn't a very realistic strategy, long-term. With such a low volume of investments, the investors would be busy working on other things, some maybe unrelated to technology. On the other hand,Silicon Valley VC's would be researching technology and figuring out what is hot and how to help their companies full-time. (I'm just extrapolating here.)
  - edw519 19y ago
    Actually, this thread brings up an interesting point. How many people here are trying to hit a home run right out of the box? And how many are trying to hit a single, understanding that the odds are higher, but want to leave the door open to hitting the home run later?
    - rms 19y ago
      I'd love to go for the home run out of the box, but I would need to raise at least one million. That's not going to happen anytime soon.
    - jsjenkins168 19y ago
      Thats another thing the seed investors at this talk harped on. Don't try to hit a home run right out of the box. Start out small and try to self fund early on. Once you are starting to prove yourself, and can back up your claims with customer references and numbers, then you should seek funding. Doing it this way will make investors more confident that your venture can succeed, increasing your chances of being funded and improving the terms of the investment. At least this is how they explained it.
      - edw519 19y ago
        They suggest this to minimize their risk. I suggest it to minimize their equity.

by paul 19y ago

edw519 19y ago

True, but not consistent with the theme of "risk aversion" cited in the source. For each Google or Paypal, how many startups without a "viable plan for profit" failed? Hundreds? Thousands? More? Just because a high tech startup has taken the time to pound the pavement and get a little traction BEFORE seeking funding doesn't put them in the same class as sandwich shops.

vlad 19y ago
I don't think Paul is introducing a new argument such that if a high tech startup starts making money before seeking investment that they are in same class as sandwich shops are. It looks like he's just pointing out examples that disagree with your post (that every company needs to have that strategy.) He then suggests that maybe such Angel networks are behind the times and have unrealistic expectations, if they expect companies with customers, income, and a proven business plan to go to them for $200-300K when those may be ready to contact Silicon Valley VC's for millions. I can see why Paul believes this isn't a very realistic strategy, long-term. With such a low volume of investments, the investors would be busy working on other things, some maybe unrelated to technology. On the other hand,Silicon Valley VC's would be researching technology and figuring out what is hot and how to help their companies full-time. (I'm just extrapolating here.)
- edw519 19y ago
  Actually, this thread brings up an interesting point. How many people here are trying to hit a home run right out of the box? And how many are trying to hit a single, understanding that the odds are higher, but want to leave the door open to hitting the home run later?
  - rms 19y ago
    I'd love to go for the home run out of the box, but I would need to raise at least one million. That's not going to happen anytime soon.
  - jsjenkins168 19y ago
    Thats another thing the seed investors at this talk harped on. Don't try to hit a home run right out of the box. Start out small and try to self fund early on. Once you are starting to prove yourself, and can back up your claims with customer references and numbers, then you should seek funding. Doing it this way will make investors more confident that your venture can succeed, increasing your chances of being funded and improving the terms of the investment. At least this is how they explained it.
    - edw519 19y ago
      They suggest this to minimize their risk. I suggest it to minimize their equity.