Venture Godfather advice to investors action quickly take less equity

Venture Godfather advice to investors action quickly take less equity

Y Combinator founder Paul · (Paul) (Graham)

in the highly competitive business environment in the future, investors have the opportunity to earn more money? Y Combinator founder Paul · (Paul Graham) answer: can. With the cost of entrepreneurship is getting lower and lower, excellent start-up companies will increase, suitable for investors to invest in the ideal start-up companies will increase.

at the Pre-Money conference held last week at the Silicon Valley business incubator 500 Startups, Graham to angel investors to make some suggestions. These suggestions can be summed up in one sentence: action quickly, do not want to get a certain amount of equity and over investment in start-up companies.

Graham led Y Combinator usually offer only $20 thousand or less to the entrepreneur seed fund". Social news site Reddit is one of the investment objects Y Combinator. So far, YC graduated from a total of more than and 200 start-up companies, has failed the company less than 20%, well below the industry average of 90%. YC has rewritten the old order between entrepreneurs and Silicon Valley investors, creating a new paradigm to create technology companies. In the rapid development of science and technology, the influx of capital in the background, it makes the start-up companies smaller, lower cost, faster action.

investor Competitiveness: move quickly

Graham believes that venture capital is currently the largest untapped opportunity to provide funding for entrepreneurs. The problem is that investors do not understand the huge cost pressures of start-ups in the financing process, especially when the company was founded only by founders. During the financing period, almost all startups will stagnate." Graham said at the meeting.

therefore, Graham suggested that angel investment, investors if the action is more rapid, and its competitiveness will have room for improvement. If there is a famous investment company to invest $100 thousand commitment in the market in 24 hours, it is likely to be the most promising startups under income.

Compared to

, it takes a long time to make the decision of investors is not easy to be accepted by startups. If the most promising startups can easily raise money, then the "last" usually means losing the opportunity forever.

: according to the need to reduce investment break the normal procedure of shares accounting for

in the financing stage, VCs tend to put too much capital. Usually in the A round of investment, investors will require at least 20% of the equity. However, this situation will be willing to invest in the A round of investment in accordance with the wishes of the founder of the purchase of equity risk

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