The largest component of you, in the opinion of most investors, is the opinion of other investors. Which is certainly a recipe for rapid growth? An investor wants to invest in you, that makes others want too much, and other investors want to make.
Sometimes inexperienced founders mistakenly conclude that manipulating these forces are the essence of fundraising. They panic stories about successful investments in startups to hear, and that, therefore, it is to be the mark of a successful startup. But the two that are not highly correlated. startups that cause panic flaming out at the end (in extreme cases, partly as a result of a stampede) lots and lots of very successful startups money they raised for the first time quite popular with investors Were.
The point of this essay, how to make a stampede, but only to explain the forces that produced them is not convincing. Fundraising these forces are always at work to some degree, and they can lead to surprising situations. If you understand them, you at least can avoid being surprised.
Investors a reason to like you more when you have other investors like you is actually a better investment. Reduces the risk of failure to raise money. Indeed, investors hate it, because you later investors to increase their market capitalization are to justify. When you had no money to investors who were taking more risks and are entitled to higher investment returns. Also, a company that has raised money is really valuable. After you raise the first million dollars, the company because it is the same company as before, at least a million more valuable, moreover it is a million dollars in the bank.
Beware, though, because later investors raised the price on them that they are opposed to the logic of self-hate. Only one investor at a price you are comfortable with losing some anger will refuse to increase.
Another reason investors like you more when you have had some success in fundraising is that it makes you more confidence, and one of the investors' opinion is the basis of your opinion of your company. Founders often are surprised to know quickly when investors begin to be able to raise the money they seem. Methods for such information and to spread among investors are lots fact, the main vector is probably the founders themselves. Although they are often not aware of the technology, most investors are very good at reading people. When the fundraising is going well, investors increased their faith are quick to sense it. (This is a case where the average profit for its founder's inability to remain poker-faced works.)
But the most important reason investors like you more clearly when you started to raise money that they are bad at judging startups. Given that even the best investors are hard to startups. Mediocre ones as well are flipping coins. So when investors see that mediocrity you want to invest in a lot of other people, they should not be a reason to assume. The 'Hot Deal, "where you can handle more interest from investors as the valley that leads to a phenomenon known.
The best investors are not influenced by the opinions of other investors. It is simply to average together with others their own judgment will weaken. But the practical sense that they indirectly impose a time limit on the interest of other investors affected. The fourth way in which it produces proposals. Yet with a firm offer to you with the track to get a start, it sometimes other companies, even the good ones make up your mind to provoke, lest they deal will lose.
Unless you are a wizard in the conversation (and if you're not sure, you're not), the exaggeration of a good investor to decide to push to be very careful about. The founders of this kind of thing all the time, try, and investors are very sensitive to it. If something extreme. But so long as you are telling the truth are protected. Investor B, getting along with you yet, but you also want to raise money from investors, an investor can tell you that it is happening. That is no manipulation. You're really in a bind because you really are rather than raise money, but it is still uncertain what will set you safely can not reject an offer from B.
Not, however, able to tell which one is B. VCs will ask other VCs sometimes you are talking to, but you should never tell them. Angels sometimes, other angels because angels tell about can cooperate with each other more. But VCs ask, just say that you want to talk about other companies are not telling, and talk to you for any firm is obliged to do the same. If they push you, that you always have a secure card for which fundraising is-playing-on are inexperienced and you point out, you have to be extra cautious.
Some startups tend to experience a holiday of interest, at least initially, almost all the event, where the herd away the remains clumped together will experience the other side. The fact that investors are influenced by the opinions of other investors so means that you will always start in a few holes. So how hard is to get the commitment of the difficulty comes from the strength of the outside do not be discouraged. The second will be easier.
notes
An accountant can say that a company that has raised a million dollars if the convertible loan, but in practice the money raised as a convertible loan into equity round is slightly different from the money raised is no richer.
The founders are often surprised by this, but investors can be very emotional. Or rather angry; The main feeling is that I saw, But investors to the point where it sometimes to act against their own interests for the causes are very common. I have an investor who invests in a startup to a $ 15 million valuation cap is detected. Before he got a chance to invest in a $ 5 million cap, but he refused because a friend who invested in a $ 3 million cap had been able to invest.
No comments:
Post a Comment