A hacker investor guide
Eric you Xu (this article: Google Docs)
(It is recommended that you access the original text in English. If you reprint the original text, you must provide the original text link and the link to this Article)
Technicians are unfamiliar with the world of investors. On the one hand, investors are very different from technicians, and on the other hand, investors are basically operating in a dark box. I have been working in this industry for many years as a founder and investor, but I still cannot fully understand it.
I will list some surprising things I learned from investors, some of which I learned last year.
Teaching technicians how to get along with investors is perhaps the second important thing we have done at Y Combinator. The most important thing for startups is to do the right thing, but obviously everyone knows the importance of this. The danger for investors is that they do not recognize how little they know about the investor world.
1. Investors are factors that bring startups together
About a year ago, I tried to find out what was needed to build another Silicon Valley. I think it is important for rich people and people with top technologies, that is, investors and entrepreneurs. These people are the core of technology production, and others will follow.
To be specific, I think investors are bottlenecks. Not only do they invest a lot in startup companies, but the simpler reason is that they are reluctant to move. They are very rich. They will not be able to run because abkuki (the famous therapeutic site) has a small group of hackers who can invest in it. In any case, hackers must go to the San Francisco Bay area to find investors.
2. Angel Investment is the most important
There are many investors, mainly angel investors and VC investors. VC invests in other people's money, angel investors invest in their own money. although angel investors seem unknown, they may be the most important factor in Silicon Valley. If angel investment was not initially involved, most companies would not be able to make VC investment. VC claims that half to 3/4 of companies have absorbed some external investment before the first round of fundraising . series A round is the first round of financing after angel investment)
Angel Investors prefer to invest more in risky projects than VC, because some angel investors are also innovative and sometimes give valuable suggestions than VC.
Google's story shows the key role of angel investment. many people know that Google has raised funds from Sequoia and Perkins, but they do not know that it is something that will happen later. this was the second round of financing, and Google was about $75 million before that. therefore, Google is already a successful company. in fact, Google is invested by Angel.
Although traditional Silicon Valley companies are developed by angel investment, it is not surprising. risks are always proportional to the Return. Therefore, the most successful startup companies seem to be extremely risky gambling at the beginning, and this is exactly the type that VC will not touch.
Where did Angel Invest? They also started their business from startups. Therefore, under the market effect, Silicon Valley has become a gathering place for Entrepreneurs: to start a business there, because someone has already started a business (SUCCESS.
3. angel investment does not like making public
If Angel Investment is so important, why do we hear more about VC? Because VC is open. They need to sell for themselves because the customers they want to attract are, on the one hand, those large donations and pension fund organizations and rich families. VC helps them invest; on the other hand, they are the founders of companies, they asked VC for money.
But angel investors do not need to sell themselves because they invest their own money. They also don't advertise to entrepreneurs, because they don't want people to chase him with their business plans (VC doesn't like it either ). in fact, Angel and VC both reach a deal through the introduction of people .
The reason why VC creates a brand is not because it wants to receive a bunch of business plans, but to defeat other VC. angel has no direct competition. On the one hand, because they have less transactions, on the other hand, they are willing to share their investment, and there are more sources of investment than VC. the reason is that the number of companies that started out is definitely more than the number of companies that insisted on meeting VC)
4. Many investors, especially VC, do not like entrepreneurs.
Many angel investors are, or have been technicians. But VC is another type of person. They are businessmen.
If you are a technician, you can take a quiz to help you understand why there is no tech-crazy VC: if you don't want to do anything in the sky, you just need to listen to people all day to talk about some very bad project plans. Do you decide whether to invest or participate in the work of the board of directors? This is boring for many technical staff! Tech geeks like doing something, and VC sounds like doing administrative work.
Because most investors and entrepreneurs are not the same type of people, it is hard for them to understand what you are talking about. If you are a technician, you may have been dealing with these people before you went to middle school. Maybe when you go to college, you rush to the lab and pass through their fraternity. But don't underestimate them. In their world, they are also experts like you in your world. They are good at looking at people and doing business in their favor. Think about it before you want to beat them.
5. Most investors are momentum investors.[Note: it can be understood as follow the trend or immediately step on when you see the difference; buy high and sell low]
Because most investors are businessmen rather than technicians, they generally don't know what you are doing. when I was an entrepreneur, I knew that most VC didn't understand technology, but I also knew that some of them made a lot of money. these two cases have never happened to me until one day, I combined them to think: Why can those VC who do not know the technology invest and make money?
The answer is: they are momentum investors. in fact, you can make a lot of money from the stock market. when the stock market rises, you buy and sell when the stock market drops suddenly. in fact, you are making an internal transaction-you may not know anything, but you know that someone knows the story and drives market changes.
This is also a way for many investors to make money. they don't look for or predict the fluctuations of an industry. The trick they win is that they noticed things change earlier than others, and the result is almost the same as the right investment. maybe they have to pay a little more when they enter, but it's just a little bit.
Investors say they are very concerned about the team. In fact, they are most concerned about your traffic, followed by the ideas of other investors and your team again. if you do not have access traffic, they will look at the second indicator: What other investors think. as you can imagine, this will bring up and down the stock price of a startup company. in the week when everyone asked you for funding, they asked you for financing. But it may not take a long time. A major investor began to leave you cold, and no one will call you back next week. we have seen too many stock prices from cold to hot or from hot to cold in a few days, even though this startup company has never had any essential changes in these days.
There are two solutions to this phenomenon. if you are confident, leave him alone. you can get a small amount of money from a relatively cool VC, then generate a profit, and then find the famous VC to get a large amount of money, then gradually increase the hype, and finally sell at the highest point. this risk is very high, even if it succeeds, it takes years and months. I won't try it myself. my advice is to take a safer approach: if an investment opportunity looks suitable, start your company with it. the success or failure of a startup company actually depends on the product quality rather than the brand or investment quality of VC.
6. Most investors are looking for the next Google
Venture capitalists want the company to go public at the end so that they can get the most out of the box. They know that the chances of listing a startup company are small, but they still want to invest in companies that have the opportunity to go public.
The current method seems to be to invest in a group of companies, most of which have failed and become Google. then the minority success makes up for the failure of the majority. therefore, most VC will vote for you only when you are a potential Google. they don't care about investing in a company that can grow steadily to a market value of US dollars and then be acquired. They want to invest in a super large company.
Angel is different. they are willing to invest in companies that can be acquired by more than 10 million yuan at a low cost. but apparently they also want the company to go public, so a long-term ambitious development plan will make everyone happy.
If you take the VC money, you must use the money method, because the VC investment structure prevents early acquisitions. if you get VC money, they won't let you sell the company very early.
7. VC wants to make a big sale
The fact that VC operates investment funds makes them want to invest a lot of money. A typical VC may have hundreds of millions of dollars. If 10 partners need to drop 0.4 billion, each of them must invest 40 million. VC generally works on the board of directors of the invested company. if the average transaction size is 1 million, they will have 40 seats on the board, but this is boring. so they like to invest in large transactions, and they can invest a lot of money at once.
If you don't need a lot of money, VC won't treat you as cheap goods ). this even makes you less attractive, because it means that their investment has not set a barrier for other investors. NOTE: If VC cannot share a certain amount of investment, then investors can subscribe to additional investment to dilute them, which is not desired by VC)
Angel invests in his own money, so he is willing to invest a small amount of money. For example, if it looks like the prospects are good, it would be better to look for angel if it is not too costly.
8. valuation is fictitious.
VC also admitted that the valuation is fabricated. They decide how much you want and how much they want to earn. Then they get the valuation of your company.
As investment increases, the valuation is also increasing. A company that is willing to invest 50 thousand in the final value of 1 million won't get 6 million yuan from VC. in this case, the company's founder accounts for less than 1/7 (the option pool also comes from this 1/7 ). why can't we hear that VC has invested 1 million yuan in news for a company worth 6 million yuan, because most VC won't do this.
If the valuation is determined based on the investment amount, it shows the gap between the valuation and the actual value of the company.
Although the valuation is fabricated, entrepreneurs should not be too concerned about this matter. this should not be the focus at all. in fact, a high valuation may be a bad thing. if you get an investment when the company's valuation is 10 million, you obviously won't sell it at 20 million. VC allows you to sell the company at a price above 50 million, in this way, they can get a return rate of 5 times, but in fact they are too few. most likely, they ask you to keep your company above 0.1 billion, but a high bid will obviously reduce the chances of being acquired. many companies may buy you at a price of 10 million, but 0.1 billion is useful. in addition, a start-up company is a process of success or failure for entrepreneurs. What you need to do is to increase the chance of winning, rather than the percentage of ownership of the company.
But why do entrepreneurs need to pursue a high valuation? They are actually misled by their own ambitions. they think a high valuation represents a greater gain. they often hear how much the company of other entrepreneurs is estimated, and then compare them with each other, "my company is better than yours ". however, in fact, the estimated amount of money is not really a contest. The real test lies in the final result, and a high valuation will reduce the possibility of obtaining good results.
The only benefit of a high valuation is that your equity is diluted to a relatively low level, but there is actually another way to achieve this goal: get less from VC.
9. Investors are looking for entrepreneurs who are just as successful as they are now.
Investors were looking for the next Bill Gates 10 years ago. in fact, they are wrong, because Microsoft has an unusual starting process. they started from software contracts, mainly because IBM gave up the PC market rashly at that time.
Now, all investors are looking for the next Larry and Sergey. This is a good trend because they are very close to the ideal entrepreneurs.
Previously, investors believed that the founders must be experts in business, so they were willing to invest in teams consisting of MBA engineers who would hire programmers to make products. it's like investing in Steve Ballmer (CEO of Microsoft now) and then Steve will hire Bill Gates again. This is the opposite method, just like what several leather companies do (as the events of the bubble showed ). now most VC knows that they should invest in technical personnel. this is remarkable in the top VC, and those second-stream VC continue to invest in MBA.
If you are a technician, the good news is that investors are looking for the next Google founder. The bad news is that the only investor who invested in Google knew them when the Google founder was a doctor, instead of making money after becoming the focus of the media. therefore, VC still has no clue about what a great entrepreneur looks like at the beginning.
10. The value of investors tends to be underestimated.
In addition to investing money, investors will also do a lot of things for the company. they are very helpful for business and market import, especially the smarter ones among them, which are angel investors. They can give very good suggestions for products.
In fact, I have said that the standard for distinguishing top-notch investors and second-tier investors is the quality of their suggestions. Almost all investors give suggestions, but excellent investors give good suggestions.
No matter how much help investors give, their contribution seems to be underestimated. it sounds like a good proposition to everyone to solve all the problems. the investor's role is to make the company more valuable, and the way to make the company more valuable is to make it look like all the good ideas of the company are the ideas of the company's internal founder.
This trend is combined with media's obsession with the company's founders. in a company where two people start up, 10% of their opinions may come from the company's first employee. basically, if this is not the case, they will not recruit people. however, this person is basically ignored by the media.
I am talking about this as an entrepreneur. the contribution of entrepreneurs is always overestimated. The danger is that new entrepreneurs will think after seeing existing entrepreneurs: Ah, they are Superman, and I cannot match them. in fact, there may be many different roles behind the scenes to support these people and make their views possible .
11. VC fear not to be optimistic
I used to be surprised to find out why VC is so timid. they are afraid that they will not be favored by their partners. Maybe they also include their limited partners. [Note: limited partner, also called passive investors, only investing in capital, but not participating in company management], because you invest with their money.
Through the risk that VC dares to bear, we can see how much of these concerns they have. you can tell whether they want to invest in other people's money or are willing to be angels. although it seems inaccurate that VC is unwilling to take risks, they are not willing to do the undesirable things. the two are not the same thing.
For example, most VC and their reluctance to invest in the establishment of two 18-Year-Old Mao tou companies, no matter how smart and technically versatile the two are, if they fail, their partners will come and say, what, you have given us millions of 18-year-olds? If VC invests in three companies in their 40 s who have worked as financial directors to prepare for outsourcing services (in my opinion, this risk is more serious than the former), and if it fails, will it be said by others? No, because his investment looks so cautious!
As one of my friends said: "Most VC will not do things that sound bad for retired fund managers who have no brains ". angel dared to bear the risk because Angel did not need to report to anyone.
12. It's not a big deal to be abandoned by VC.
Some entrepreneurs are frustrated after being abandoned by VC. in fact, they shouldn't worry too much about this. at the beginning, VC was often wrong. It is hard to imagine that a successful startup company has never been identified by VC. many VC have rejected Google, so obviously the VC response is basically meaningless.
Investors often have some superficial reasons. I know that a VC gets rid of a company. Just because the stock splitting of this company is fragmented, this transaction can be completed only by a large number of signatures.  VC is doing this because they have experienced too many businesses. Even if you get rid of some superficial problems, the next business may be quite good. imagine buying an apple in the grocery store. You caught an apple with a scratch on the surface, but you don't even need to check if it was scratched in the end, because too many unscratched apples have been selected for you.
Investors usually admit that they often make incorrect judgments at the beginning, so after you are rejected, don't think "We failed", but "have we failed ?" The question left to you is not an answer. (rejection is a question, not an answer !)
13 Investors are emotional
I was surprised how investors were so emotional. you expect them to be calm and computation-or at least be proficient in business. normally they are not. I don't know if their position and power make them so, or because they hold a large sum of money, but Investment Negotiation often turns into a personal feeling. If you offend investors, hum, they must shoot the table and leave.
Not long ago, a famous VC company wanted to raise the first round of funds for a company with our seed investment. They heard that their competitors were also very interested. as a result, they worried that the business was stolen due to the intervention of other companies, so they opened a time-limit clause. [Note: exploding termsheet is a clause that allows you to make decisions within a short period of time and does not allow other companies to intervene] I guess they only have 24 hours to make decisions. A time-limit clause is a theme with unknown prospects but not uncommon. what makes me think incredible is that when I look back and ask them if their competitor VC cannot talk about it, they say no. when they say this sentence, what is the rational composition? If this company is really worth investing, what is the impact of other VC ideas? Of course, they should be responsible to limited partners and put the money in the best place; other VC should be happy when they give up, because others ignore a good opportunity. but obviously they are not rational at all. If the competitor refuses, they cannot stick to their ideas.
In this case, the time limit clause is not just a trick to put pressure on start-ups. it's like a high school student's trick of breaking up: You get rid of someone before they get rid of you. in my previous article, I said that VC is the same as a high school girl. some VC joke with my summary, but none deny it.
14. Negotiation is ongoing until the transaction is finalized
There are roughly two steps for a large majority of investment or acquisition transactions: The first step is to discuss some important people issues. if this step succeeds, you will get a term contract (term sheet), which is called a term contract because it lists the key items in the transaction. term sheet is not a legal force. but this is a required step. it is used to represent a transaction that will take place, and it will only wait for the lawyers to solve the problem in detail. theoretically, these problems are all minor issues, because according to the definition of the termsheet clause, all important things should be covered.
The combination of lack of experience and idealism will enable entrepreneurs to think that once they have a contract, they will have the deal. they want this transaction. Everyone seems to be doing things to facilitate it, so this transaction will certainly be there. but after a few months, I still haven't waited. for a startup company, it may take several months for a company to go from day to place. in fact, investors and buyers often have the mentality of regret. so you have to keep pushing them, keep trying to sell your company to them, and do everything you can to achieve your goal. otherwise, the minor details that are not mentioned in the clause contract will be understood as your shortcomings. this small event may damage your transactions. if they want to do so, they usually stick to a technical issue or claim that you mislead them, rather than admit that they have changed their mind.
It is difficult to keep putting pressure on investors or buyers until the transaction is completed, because the most effective pressure on them is their competitors. Once you get a contract, these competitors usually leave. you should be as good friends as their competitors, but the most important thing is to maintain the momentum of the company's development. investors or acquirers choose you because you seem to be a leader. therefore, continue to do things that make you look very popular. continuing to release new features, winning new users, or often being talked about by the media and the blog circle, these are good methods that seem like they are competing.
15. Investors like to invest together
I was surprised by Investors' enthusiasm for sharing a business. you may think that if they find a good business, they may have to swallow it alone. however, they seem to like doing business together very much. for Angel, this is a good understanding: Angel invests a small amount and does not want to put his eggs in a basket. but VC also invests together. Why?
I have mentioned before, "VC cares about other VC ideas. "I think this is one of the reasons for joint investment. a business with a lot of VC participation may be easier to achieve, so when most transactions are concluded, you may find that multiple investors are doing this business together.
A company should also want multiple VCs to participate in a transaction, because this is a very rational practice: Once a VC participates in your investment, it means a VC is missing from your competitor. obviously, red shirts don't want to share Google's guts with Kleiner, but they finally made a cooperative investment. the advantage is that both parties will not invest in other competitors. the benefits of cooperative investment are the same as those of women who deliberately confuse their children and fathers: several "suspected" fathers have to pay for maintenance or take care of their babies. according to my friends, this is a common situation in the community of pairans ).
However, I think the main reason why VC invests together is to avoid being optimistic. if other companies invest together, even if they fail, the business seems to be a prudent choice-at least the choice of the masses, rather than the impulse of individual investors.
16. collusion between investors
Investment is not governed by the anti-trust law (trust: trust, highly United Industry Alliance. at least, it is better not to be governed by the Trust Law, because investors often violate this law if there is anti-trust law. I personally know some cases. One investor asks another investor to quit and promises to share the future business.
In principle, investors should start fierce competition in their minds and strive to achieve business. however, cooperation is too competitive. the reason is that there are too many good apples. although a professional investor may have a more intimate relationship with entrepreneurs than other investors, this relationship can only last for several years, the relationship between him and other investment companies is indeed his entire career. investors do not have such stakeholder relationships, but they are often closely related. professional investors usually give each other a small favor when doing business.
Another reason for bringing investors together is that this can protect the interests of the investor group. therefore, you cannot allow investors to bid for your business during your first round of financing. they would rather not do this business, nor would they set a precedent for VC to compete for business. in the future, an efficient venture capital market may emerge (and VC will compete with each other), and the situation is indeed moving in that direction; but at least not now.
17. Large investment companies are concerned with a package of investment, rather than a single company.
For startups, the reason for success is that all people have equal rights. therefore, the only way for an individual to succeed is to let everyone do this well. this system allows everyone to work in one direction, although the specific force strategy may be different.
The problem with large investment companies is that they have no consistent driving force. they (each partner) have similar but different goals. they don't need to succeed in every company like entrepreneurs. They just want to make money as a whole. therefore, when the prospects are unclear, the rational approach is to sacrifice companies that seem hopeless.
Large investment companies tend to divide startups into three types: Success, failure, and "living. "alive" refers to the one that has been operating but will not be acquired or listed in the near future. for entrepreneurs, being "alive" sounds like a shame or mean. their company may be far from failure in the general sense, but Vc doesn't think so. Like other successful companies, these companies take a lot of time, money, and attention. if a company faces two options: conservatively continuing to run the company and having more confidence in its ability to succeed, or venture on gambling, and can be seen as successful or completely destroyed in a short time, VC will definitely let you choose the latter, a game of heaven or hell. for them, the company has already cut down the book, so it is better for them to solve the problem quickly.
If a startup company is in trouble, VC will not want to save it. Instead, VC will sell the company to another company that has invested in it at a low price. philip Greenspun introduced the VC of ARS digita in founders at work.
18. The risk assessment by investors and entrepreneurs is different.
Most people prefer 100% instead of 1 million. investors have enough money, so they prefer the latter. therefore, they always encourage entrepreneurs to gamble. if the company's development momentum is good, VC wants entrepreneurs to reject all the acquisitions. in fact, most companies that refuse to make an offer do well at the end. but for entrepreneurs, this is a bit cool and sweaty, thinking that it may be the last thing to fetch water. when someone asks to buy you at a price of 5 million, if they refuse, they will play the same lucky wheel as the bet of 5 million.
Investors will tell you that the company is actually more valuable than this. they may be right, but that doesn't mean selling the company is wrong. if a financial institution tries to bet all the client's money on a single, private company, it may be revoked. by analogy, the Founder has moved all his money to his company ).
More and more investors allow the co-founder to withdraw cash. this may solve the conflict between investors and entrepreneurs about selling or not selling companies. many entrepreneurs do not have high requirements for wealth, at least for VC. however, the popularity of such practices is too slow, because VC is worried that it will make others feel that VC has no sense of responsibility ). no VC wants to be the first VC who has made money for others and is finally scolded. but before this happens, we have to say that VC is too conservative on this issue.
19. diverse investors
When I was an entrepreneur, I thought VC was the same. they actually look the same. they are a group of people named by hackers as "well-dressed and well-dressed. but since I 've been dealing with them, I 've realized that some "suits" are smarter than other "suits.
In fact, their business also has the effect of Ma Tai: The Winner wins and the loser loses. if a VC is doing well in the past, everyone wants to invest in it, so they get all new businesses. this natural positive feedback process makes the top 10 investment companies and those listed in the hundreds behind look like they are in two different worlds. in addition to wise accidents, they are more calm and upright. they will not do unreliable things in order to gain benefits. They need to ensure their brand value.
You only want to get money from two VC types. if you have a choice, you must choose top-level VC, such as those in the first 20, and some new Vc in the first 20, because their debut is not long, they are not ranked in the top 20.
If you are a hacker, it is especially important to take money from top-level VC because they are more confident in you. they don't have to stick to your role as CEO like other investment companies in 1990s. of course, if you are smart and willing, they will also let you operate your company.
20. Investors don't realize how much money they have to pay
It takes a lot of time to raise funds, but this is exactly what happens when a startup company is competing in seconds. it is not uncommon to complete a round of fundraising in five to six months. six weeks is already fast. fundraising is not the kind of work that will be automatically completed in the background. when you raise funds, this inevitably becomes the company's work center, which means that the company's product R & D (during this time) is not a work center.
Assume that the Y Combinator incubator starts to contact VC after the product prototype demonstration and successfully talks about the fundraising plan. financing was completed in a relatively short period of 8 weeks. the prototype demonstration was originally performed 10 weeks after the company was founded, and now the company has been established for 18 weeks. in this case, 44% of the time is spent on raising money rather than developing products. and remind me that this is still a very smooth situation.
When a company returns to the product development track from raising funds, it will take at least a month of chaos, because after the development is interrupted, it will lose the initial momentum.
VC simply cannot understand how much damage the company's long financing process has caused. but start-up companies know it themselves. here is an opportunity for a new investment company: they may invest less or have a lower valuation than other venture capitalists, but they can guarantee that they will not invest in the company in a short period of time, otherwise, I cannot. if there is such an investment company, whether it is very prestigious or not, I suggest that it be preferred for a startup company. start-up companies rely on time and effort to survive.
21. investors do not like to say "no" directly"
Investment transactions take a long time to complete, mainly because investors cannot reach an agreement. VC is not a big company. If they need to complete the transaction within 24 hours, they can do the same. however, the initial contact usually takes more than two weeks. the reason is that their selection strategy I mentioned earlier: Most VC does not predict the success of a company, but quickly discovers a successful company. they care about the market and what other VC thinks of you, and this information is not available for simple meetings with you.
Because they invest in fields that (a) are rapidly changing and (B) they do not understand, many VC may reject you in one way and claim that it is not a denial. unless you understand these game rules, you will not know if you are rejected. for example, this is a VC saying "no:
We are very interested in your project and hope to keep in close contact with you.
To put it bluntly, we will not invest in you, But we reserve the right to invest in you, if your company will indeed fly. sometimes they clearly tell you that they want to see some "attractiveness". For example, if you win many users, they will invest in you. however, any VC will invest in you at that time. so they will all say: you are still in the first square matrix.
Here is a quiz about whether VC is a "line" or "no": drop down and check if you have a term sheet in your hand)
22. You need investors
Some entrepreneurs may ask, "Who needs investors ?" Actually, the answer to this question is "everyone". In fact, every successful startup company is more or less absorbing foreign investment.
Why? Those who think they do not need investors ignore one thing: competitors. the question here is not whether you need external investment, but whether external investment can help you. if the answer is yes, but you have not absorbed any investment, your competitors will have an advantage over you. in the world of start-up companies, a small advantage may also be extended to a great extent.
Mike Moritz, a red shirt partner, apple, Cisco, Oracle, Yahoo! With investors from companies such as Google and 100 people in the age of this year), he cast a vote for Yahoo because he thinks Yahoo is several weeks ahead of other competitors. of course, this sentence was not always true as he thought, because Google appeared three years later and beat Yahoo. but he does mention some important things: a small advantage will usually make the company succeed. companies that do not have this small advantage often fail.
It may be because the cost of starting a company to start a business has reduced, and it is possible to succeed without external investment in the competition. the cost is required for raising funds, but the actual situation shows that this is a pure reward.
23. Investors like companies that do not need to invest
Many entrepreneurs contact investors because they need to invest to create a company (in fact, it is no different from going to college ). in fact, most companies do not need to invest everyone's help to establish the company. Investment is just a simple process.
In fact, investors like you very much and don't need him. I don't know whether it is conscious or unconscious. What excites them is that the entrepreneurs ran to them and said, "We are about to sail, do you vote or not, instead of "please give us some money to create a company, OK? ".
Most investors are "cheap" because their favorite Company is the one who treats them rudely. when Google made an estimate of $75 million to extract them, their response was: Ha, it sounds good. they chose the right one, didn't they? This business is more profitable than any list they have made.
The question is that VC is very good at looking at people. so unless you are the next Google, do not treat them rudely, otherwise they will immediately crack you within one second. most startups should always prepare a second solution, rather than deliberately treating VC. to prevent being rejected by the VC, you have to prepare a solution B. it is the safest thing to think about.
Therefore, you should not create a company that requires significant initial creation costs, because if so, you will be dominated by VC. if you want to start with a huge business, you can start with a low-cost subset. As more and more money grows, you can expand your ambitions.
The animals most likely to survive in a nuclear war are cockroaches, because they are very powerful. at the beginning of your business, it is best for your company to look like a cockroach. it should be like solid fake flowers that are supported by plastic, rather than beautiful but fragile flowers. although small and ugly, it cannot be destroyed.
 I may have underestimated VC and they have played a major role in the IPO. If we want to build another Silicon Valley, the IPO will eventually be needed.
 Some VC have e-mailboxes that can submit business plans. however, the number of companies that use this method to invest is basically zero. you should always get to know partners (rather than their assistants) through private introductions ).
 Many people have told us that the most valuable thing we learned in entrepreneurial schools is to realize that successful entrepreneurs are actually ordinary people. although we are happy to provide this service (for successful entrepreneurs to tell ordinary stories as speakers), this is not the orientation of the startup School for speakers.
 In fact, I feel that VC has the psychology of regret buying, and then avoids this business with some technical details. this story tells us that, even if the reason seems to be false, VC can reject you.
Thanks to Sam Alman, Paul buchheit, huch Fishman, and Robert Morris for reading the draft article, and to the invitation of ases kenth king.