5 ms·

What do you do after an investor says yes?

90 points by ashrust 12y ago

mrmch 12y ago
One of the best parts of this, illustrated by the use of red squares, is that "sit and do nothing" isn't part of fundraising. Common YC advice for fundraising is "optimize for speed" (with valuation, amount, brand names, etc, coming second). Don't get trapped in long diligence cycles, waiting for a lead, or other road blocks.
- ashrust 12y ago
  Yes. I've convinced myself so many times that fixing a bug or shipping a new feature was more important than closing the round.
- davros 12y ago
  Outside YC, chasing a 'yes' actively to turn it into a completed investment is even more important. Optimize for speed is closely related to optimize for outcome. One minor addition to the chart - if investor asks for a longer timeframe, respect that - and chase other investors!
  - ashrust 12y ago
    But a longer a timeframe where? I think waiting on signing docs after agreeing to them is far from ideal, same goes for waiting on wiring the money, unless agreed in advance.
codingdave 12y ago
In my mind until you can answer 'Yes" to the question of "Have they signed?", then they haven't said yes.
- jacquesm 12y ago
  They haven't said 'yes' until they've wired the money.
  - ashrust 12y ago
    The gap between 'yes' and money in the bank, is why so many people have trouble with this, imo.
nroach 12y ago
Interesting that there's no step in the flowchart for an investor to exit the flow after a verbal yes. A 100% close rate may be normal for a YC company but in my experience it's not typical. You want to get a "No" as fast as possible, which I've seen happen at every stage of the pipeline, including after signed docs (although rarely).
- ashrust 12y ago
  I agree, we've never closed 100% of yeses. However, dragging it out with one of those investors, assuming they refuse to say no is worse for them imo as it creates a clear paper trail of bad behavior which hurts their reputation.
  - mattschmulen 12y ago
    This is true, investor and for that matter 'executive' lock-in is significantly more substantial than an individual contributor, and so (rightly so) is the investment to return. It's an interesting paradox. Reputation matters.
jgh 12y ago
take their money and buy a ferrari
patio11 12y ago
Relatedly: write one of these for your sales process (certainly for enterprise sales, but very useful for low-touch/medium-touch as well). It will save your sanity.
- ashrust 12y ago
  Good call, adding to the list.
- robodale 12y ago
  I second that - you always know what to do next...
nitrogen 12y ago
A note to anybody having problems loading the flowchart image: some combination of HTTPS Everywhere and other privacy-related extensions causes the image to fail to load with an Amazon S3 or CloudFront-like error from Edgecast CDN. The broken image URL: https://gs1.wac.edgecastcdn.net/8019B6/data.tumblr.com/d92e89be88474faafb5122dc60a6e450/tumblr_nlowhamlb31r7m6x8o1_r1_1280.png https://gs1.wac.edgecastcdn.net/8019B6/data.tumblr.com/d92e8... The correct image URL: http://40.media.tumblr.com/d92e89be88474faafb5122dc60a6e450/tumblr_nlowhamlb31r7m6x8o1_r1_1280.png http://40.media.tumblr.com/d92e89be88474faafb5122dc60a6e450/... (https also works)
nolite 12y ago
how'd they make this flowchart? Its great

90 points by ashrust 12y ago

mrmch 12y ago

One of the best parts of this, illustrated by the use of red squares, is that "sit and do nothing" isn't part of fundraising. Common YC advice for fundraising is "optimize for speed" (with valuation, amount, brand names, etc, coming second). Don't get trapped in long diligence cycles, waiting for a lead, or other road blocks.

ashrust 12y ago
Yes. I've convinced myself so many times that fixing a bug or shipping a new feature was more important than closing the round.
davros 12y ago
Outside YC, chasing a 'yes' actively to turn it into a completed investment is even more important. Optimize for speed is closely related to optimize for outcome. One minor addition to the chart - if investor asks for a longer timeframe, respect that - and chase other investors!
- ashrust 12y ago
  But a longer a timeframe where? I think waiting on signing docs after agreeing to them is far from ideal, same goes for waiting on wiring the money, unless agreed in advance.

codingdave 12y ago

In my mind until you can answer 'Yes" to the question of "Have they signed?", then they haven't said yes.

jacquesm 12y ago
They haven't said 'yes' until they've wired the money.
- ashrust 12y ago
  The gap between 'yes' and money in the bank, is why so many people have trouble with this, imo.

nroach 12y ago

Interesting that there's no step in the flowchart for an investor to exit the flow after a verbal yes. A 100% close rate may be normal for a YC company but in my experience it's not typical. You want to get a "No" as fast as possible, which I've seen happen at every stage of the pipeline, including after signed docs (although rarely).

ashrust 12y ago
I agree, we've never closed 100% of yeses. However, dragging it out with one of those investors, assuming they refuse to say no is worse for them imo as it creates a clear paper trail of bad behavior which hurts their reputation.
- mattschmulen 12y ago
  This is true, investor and for that matter 'executive' lock-in is significantly more substantial than an individual contributor, and so (rightly so) is the investment to return. It's an interesting paradox. Reputation matters.

jgh 12y ago

take their money and buy a ferrari

patio11 12y ago

Relatedly: write one of these for your sales process (certainly for enterprise sales, but very useful for low-touch/medium-touch as well). It will save your sanity.

ashrust 12y ago
Good call, adding to the list.
robodale 12y ago
I second that - you always know what to do next...

nitrogen 12y ago

A note to anybody having problems loading the flowchart image: some combination of HTTPS Everywhere and other privacy-related extensions causes the image to fail to load with an Amazon S3 or CloudFront-like error from Edgecast CDN. The broken image URL: https://gs1.wac.edgecastcdn.net/8019B6/data.tumblr.com/d92e89be88474faafb5122dc60a6e450/tumblr_nlowhamlb31r7m6x8o1_r1_1280.png https://gs1.wac.edgecastcdn.net/8019B6/data.tumblr.com/d92e8... The correct image URL: http://40.media.tumblr.com/d92e89be88474faafb5122dc60a6e450/tumblr_nlowhamlb31r7m6x8o1_r1_1280.png http://40.media.tumblr.com/d92e89be88474faafb5122dc60a6e450/... (https also works)

nolite 12y ago

how'd they make this flowchart? Its great