Items tagged startups, funding
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What are the key points accelerators such as Y-Combinator drill into their startups?
They also teach the importance of launching something and getting real feedback. The entire three month YC process is based around the need to launch and demonstrate traction in order to raise money from investors.
[... 89 words]Do accelerators (which do not take up equity) accept not-for-profit ventures into their programs? If yes, which are some of the best ones?
Y Combinator recently started funding non-profits: http://ycombinator.com/np.html
[... 37 words]How much equity does YCombinator get on average?
They almost always take 7%—they get diluted down in further rounds.
[... 27 words]What are some examples of startups funded simply for the strength and uniqueness of its founders rather than for any particular idea?
A good portion of YC companies fit this definition—it’s common for YC to fund the team and then work with them to help them either fix their initial idea or find a better one.
[... 64 words]Is it fair for someone who calls themselves a “seed” investor to require traction?
It’s completely fair. If you’re building a web-based startup these days, you should be able to demonstrate initial traction on an idea with very little up-front investment—a couple of months of your time and a few hundred dollars in hosting costs, perhaps. Being able to do that is an excellent indicator that you’re a good bet for a seed investor. If you are unable to do that, you’re a much higher risk for investment.
[... 129 words]Which Y Combinator companies focus on finance?
TrustEgg (YCW11) help people open trust funds for their kids: TrustEgg Allows Anyone To Set Up A Trust For Their Kids | TechCrunch
[... 38 words]How does one actually find Angel investors, when our business/startup is taking off and we need to grow fast?
The best way to approach angels is via introductions. To get introductions, you need connections to people who are known and trusted by angels.
[... 281 words]Do all incubators / accelerators welcome their startups getting funding?
Yes. The goal of incubators and accelerators is to obtain a small amount of low-cost equity in promising companies and then help them grow and reach their potential.
[... 122 words]In which case have you seen a non-tech sole founder rise to build a sustainable great company without a tech co-founder? How can this work? What are the steps/advice you would give to the non-tech founder?
Here’s a great write-up of his experience: From Selling Scoops Of Ice Cream To Founding ZeroCater | TechCrunch
[... 110 words]I’m a developer, I’ve an idea, how to look for funding?
If you only need $10,000-$15,000 you should be looking at funding it yourself—professional investors very rarely get involved for that size of raise, and you probably wouldn’t want them to—giving up equity in exchange for so little money is usually a bad idea.
[... 90 words]Can top VCs hire almost any employee they want for their portfolio companies?
There’s little a VC can do to convince someone to go and work for one of their portfolio companies that the company couldn’t do itself. They might hear about good candidates through their networks, but that candidate will still have plenty of other opportunities to chose from.
[... 117 words]Is it worth it to give up equity in a seed stage company for something other than money? E.g. access to multiple consultants/mentors, as well as regional angel and vc groups?
Yes, but not very much equity. It’s reasonably common to give small (less than 1%) stock grants to members of your advisory board for example.
[... 75 words]What should the CEO’s salary be in a startup seeking seed capital? Is there an average number?
If you haven’t yet raised any capital, how can you pay a CEO salary at all?
[... 133 words]What prevents founders from taking blown up salaries?
When the money runs out, the startup dies. If a founder takes a high salary they are reducing the runway of the company, and dramatically increasing its chance of failure. Good founders will take the lowest salary they can make work for them.
[... 168 words]I have an offer from an angel, but just landed a 5 minute meeting with a big time VC. Do I try use the offer from the angel to my advantage, if so, how?
An offer is worth a lot more than a five minute meeting—and VCs are much more likely to take you seriously if you’ve already convinced someone else to invest.
[... 98 words]If one were to bring the concept of Twitter to a VC today, would it be invested in, or turned away?
If someone brought just the concept without any form of actual implementation (of something that is pretty easy to prototype) I don’t think they would get very far.
[... 55 words]What are some creative ways to pitch a new initiative to my team without slides?
Use a whiteboard.
[... 24 words]What systems/software are absolutely worth purchasing for a solidly funded e-commerce startup?
I’d use a small fraction of that budget for relevant SaaS subscriptions—things like www.kissmetrics.com or www.mixpanel.com for user analytics, www.moz.com or www.ginzametrics.com for SEO reporting, or www.geckoboard.com for building a custom dashboard.
[... 93 words]What’s an idea worth?
I like Derek Siver’s model proposed here: http://sivers.org/multiply
[... 77 words]At seed funding stage, how can a Startup protect itself from losing the majority?
Firstly, don’t sell a majority stake in your company. Secondly, hire competent legal advice to make sure you fully understand the terms of your investment and don’t get caught out through misunderstanding board voting rights, preferred vs common stock, liquidation preferences etc.
[... 62 words]How do you impress a venture capitalist so much that he invites you from another country for a meetup?
Don’t make a big deal about the fact that you are travelling from another country. Try to get a few of them interested enough to want a meeting, then make a bigger trip out of it.
[... 61 words]Is there software that can help me keep track of contacts and referrals while I am building my seed round?
We used Highrise from 37signals for this when we raised our seed round and it worked perfectly. You can forward or BCC it emails, use it for tasks and reminders, tag contacts in it and use the mobile app for when you are at fundraising networking events (we used that to great effect at Y Combinator demo day).
[... 84 words]What is the inital costs for a tech startup? Do you have any checklist or spreadsheet?
Initial costs can be incredibly low—a few bucks for a domain name, $40/month or so for VPS hosting. Things only start to get expensive when either you need to scale up to multiple servers (which means you’re doing well) or when you start to pay salaries.
[... 70 words]Is it viable to say to an investor that you will quit your job and work full-time on a startup, if you get the funding?
This will reflect badly on you. Why should an investor risk their money on your company if you aren’t even willing to take the risk of quitting your job for it?
[... 62 words]Is it worth accepting an investment from YCombinator if you have an established network in the valley?
Yes. Plenty of the companies in our batch at YC already had well established networks, and they still benefited enormously from the advice and introductions YC could offer.
[... 295 words]Is it even possible to think of a new idea? Anything that I think of has either been done, or someone is doing it. How do you keep yourself motivated enough to pursue it?
A lot of the time it’s not just about the idea, it’s also about timing. There are plenty of ideas which have failed in the past but could succeed if tried again today. A few things to consider:
[... 180 words]Does Y Combinator ever fund British startups?
Yes. Our startup http://lanyrd.com/ went through Y Combinator Winter 2011 (Jan to March this year) and we’re a pair of UK co-founders. We’re back in London now.
[... 41 words]What are the most recent Y Combinator startup companies as of 2011?
We (Lanyrd) are a YC startup! We’ve just announced our participation: http://techcrunch.com/2011/01/31...
[... 31 words]What is the best way to find about the upcoming startup events in India?
There are quite a few events of interest to entrepreneurs showing up on Lanyrd: http://lanyrd.com/places/india/—you can also subscribe to our Atom feed for that page to hear about future events.
[... 53 words]What are some ways I can get the word out about my startup/entrepreneur focused conference?
Add it to lanyrd.com and make sure you list all of the speakers. Then anyone who signs in to Lanyrd and is following at least one of your speakers on Twitter will be told about your event.
[... 59 words]