

Ask HN: is it better to let investors find you? - startupdream

I was wondering, if you have founded a startup, and it starts getting traction and good press etc.  Would it be better for investors to approach you rather than vice versa! Wouldn't you have a bit more control over the deal? Sorry if this is a stupid question, I'm a newbie to this internet hype :)
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curt
If you mean just sitting on your ass, no.

On the other hand if you meant going to parties and events where you actively
talk to potential investors or using PR and marketing to build buzz about your
company. Then not engaging in a hard sell and instead letting them say they
are interested, yes.

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Br1c3
No, and here's why.

It's not going to happen. Your not going to get investors coming to you. It
just doesn't work that way. One of the first things an investor is going to
ask you is who else are you working with, talking to or looking to take
investments from? If your answer is no one, you came to us. That's a HUGE red
flag, especially with the barrier to investors evaporating before our very
eyes. RE:(incubators, anglelist, etc)

The only way investors will come to you is if you:

1\. Have had a successful exit at another startup you've founded. In which
case you probably have a decent group of investors you worked with before so
not going to back to them would be counter productive.

2\. Your traction/PR is HUGE. (In which case, you should be focusing on
becoming profitable. Why take investment if you've already achieved EPIC
traction?) I'd also argue it's unlikely you got to this point w/o some kind of
outside investment. If you did then you don't need investors.

~~~
portman
_"You're not going to get investors coming to you."_

My experience has been the opposite of this.

Traditional VC firms have "Associates" (1-2 years out of grad school) and
"Principals" (5+ years out) who work for the partners. Often, there will be 3
or more associates/principals for each partner.

One of the main responsibilities these people have is to find new deals, which
they do by reading TechCrunch, Mashable, and, yes, Hacker News. Once they get
a hot-lead, they hand over to one of the partners to try to close.

I have limited first-hand experience with raising money, but of the 4 people I
personally know who have raised VC rounds, 3 of them were approached by
investors and not the other way around.

(As with anything start-up related, sample sizes are so small that it is hard
to extrapolate.)

~~~
Br1c3
Thats interesting...

Almost everyone I've talked with were actively seeking financing when they
closed their seed rounds.

I don't have any numbers, but I'd be willing to bet less than 1% of all
startups are ever featured on TechCrunch, Mashable, or any other large
industry publication prior to funding. I wouldn't rely on that to generate
investor interest.

Posting your company on HN is about as close to looking for investors without
"looking for investors"

