
Ask HN: How do I find investors? - BasDirks
Heya :)<p>A colleague&#x2F;friend and I are building a test automation SaaS platform. We live in the Netherlands. We work at a scale-up as lead full-stack developer and head of architecture, but the one thing we want most in life is to work on our product full-time.<p>How do we find investors to help build our company?
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tonybeltramelli
Find angels / VCs who already invested in your space but who didn't already
backed a direct competitor and talk to them. Either email them directly or ask
for a warm intro from someone you know that they know. Definitely speak with
other founders, fundraising can be quite an intense journey! ;)

As far as identifying relevant investors, AngelList is a good place to start
if you don't know anyone:
[https://angel.co/europe/investors](https://angel.co/europe/investors)

Alternatively, there are plenty of lists of early stage VCs such as this one
recently posted on HN:
[https://news.ycombinator.com/item?id=22042111](https://news.ycombinator.com/item?id=22042111)

Good luck! :)

~~~
BasDirks
Thanks for the resources and advice. Will look into your links.

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kenneth
(I'm a VC)

1\. build something worth investing in

2\. make sure people know about it (tell your friends, don't work in a silo,
etc.)

3\. have the right friends (i.e. be plugged into the community, be friends
with other founders, be in a place like San Francisco, etc.) and loop them in
to what you're doing

4\. if all of the above happens, I will likely hear about you from someone I
trust

Almost all of my investments come from a trusted referral.

Also helps: join YC or something similar (few are as good, though)

~~~
nashashmi
I don't like bullet point number three.

It implies you only should do number one if you have bullet point number
three.

~~~
0_____0
How do you build a company on technology that nobody knows about?

~~~
totalZero
Ask government contractors.

------
algo_trader
The YC/hacker answer - make something that people want

2 skilled devs, should be able to build a functional MVP and get some
traction/paying customers. If you cant, its a signal to rethink your product?

The hassler/MBA answer - everything has a price.

You should be making 10-100 cold calls/emails to any potential seed leads. If
you are not, its a signal to rethink your team?

Painful but realistic...

~~~
Answerawake
"make something that people want"

Is there some list somewhere of things that people _might_ want? I can build
stuff, I just have no ideas.

Also, while I would love to build a SpaceX competitor that mines asteroids, I
don't have the capital to chase that. :/

~~~
muzani
I think this is really 80% of the seed stage work. It's sort of like how early
pioneers discovered new lands, how geologists find oil deposits, how police
catch criminals. There are techniques to do it, but it depends a lot on
individual skill, willpower, and a little luck.

And generally people don't build SpaceX competitors, unless they're already
millionaires or have a MBA from Harvard and such. There's a reason Elon
started with fintech.

~~~
Answerawake
I am a programmer, love to build things but also love to learn different
thought processes. How do I go from where I am to learning more about these
techniques, learning how to do this seed stage work?

~~~
muzani
It's an iterative process. There's a few methodologies for it (e.g. lean
startup). You build something, ask users what they think, fix it according to
feedback. At some point, they'll ask you when they can buy it, which is when
it becomes a business. Then business is just finding similar people who would
buy the same thing or a variation of it.

Doing it in the wrong order (selling something, getting customers, then
building a product around it) usually results in a bad thing, where you end up
giving out $1 of value for $0.80.

There's a lot more details here:
[https://startupclass.samaltman.com/](https://startupclass.samaltman.com/)

------
sarora27
My cofounder and I just quit our jobs to start working full-time on our
product. We have no taken on any investments yet. We closed our first customer
while both working full-time jobs and have been building enough pipeline to
have a clear path to covering our expenses over the next 6 months.

We have been very deliberate about not courting investors yet because we want
to ensure we have something people would want to actually invest in before we
start the whole fundraising process.

We have gone down the route of trying to pitch the vision to investors while
trying to find customers and found the whole experience to be distracting and
a bit of a fools errand for first time founders.

My biggest takeaway from the experience was the growth trumps all. Investors
want to invest in companies that have a very clear path to growth ($x in =
$10x out) in markets that will grow into the future. They are also more
enticed if it seems like their personal interactions will be the key
differentiator in the success or failure of a business.

If your goal is go full-time on your product, I would recommend trying to
close as many customers as you would need to ensure both you and your
cofounder can cover your monthly expenses. Once you get to this point,
thinking about how to raise money (and more importantly WHAT you will do with
it after you have it) becomes more relevant.

------
lpolovets
(I'm a VC)

First step is figuring out how much you need to raise and who the appropriate
investors are. If it's tens of thousands or low hundreds of thousands of
dollars, that can be from angel investors. If it's closer to a million or
more, that's typically seed funds.

Once you figure out whether to target angel investors or seed funds, you can
find prospective investors on AngelList, NFX Signal, etc. This selection is
based on what sectors investors say they invest in, or if they've invested in
companies that are similar to yours but not competitive, etc.

Once you find specific people you want to reach out to, warm intros are the
most effective if you happen to know people in common. If you don't, cold
emails work if you can write a good email -- but that's a numbers game. You
might have to send out 30 or 40 emails to get 5 or 10 replies, but it's a
start.

The main thing to keep in mind as you're fundraising is that the further along
you are and the more compelling your pitch, the easier it is to get investors.
And once you get commitments from the first few angel or fund investors, they
will introduce you to many more prospective investors.

~~~
ablekh
Hello Leo, quick question, if you don't mind: do you invest in pre-MVP pre-
seed (idea validation phase; deep tech) and pre-revenue seed (MVP-build-in-
progress or MVP-ready phase) companies?

~~~
lpolovets
Short answer is we lean more toward post-launch, but make exceptions.

Longer answer is that we typically invest $1m-$1.5m when companies are raising
$2m-$5m. Usually that size of round happens after a product is live in the
market, but occasionally because of the founders or idea it happens earlier.

~~~
ablekh
Understood. I appreciate your prompt reply and will keep it in mind. Based on
the numbers that you shared above, it seems that you typically _co-invest_ ,
but prefer other VC firms to _lead_ in a seed round. Correct? If so, do you
expect to be approached regarding a potential co-investment opportunity _only
after_ a lead investor is found and has expressed their commitment to funding?

~~~
lpolovets
It's the opposite actually: we try to lead (or co-lead) if someone hasn't
signed a term sheet yet, but if they have accepted a term sheet then we're
happy to co-invest. $1m-$2m checks are generally enough to lead almost any
seed round these days.

~~~
ablekh
I see. Thank you very much for clarifying. Will reach out to you when the time
is right ... :-)

------
salimmadjd
1 - keep in mind investors (good ones) typically invest on people, market and
then idea. 2 - if you're not known with a track record, you need a warm
reference. A VC once told me, if a founder is not able to hustle his way into
getting a warm referral he is not worth my time. 3 - build a network of
existing founders who have been funded and ensure they see you and your
partner as something worthwhile an investors time. 4 - otherwise, traction
will bring investors. Some VC have interns or junior staffers who comb the
internet for the markets they want to invest in. If you're good they might
just find you.

------
martin_a
I don't get the mindset these days.

Why is everyone looking for investors? Seems to me like you are already
planning to sell that thing. Don't start it then, because it will be a shitty
product, built to cash in some VC money and get out of it.

Why do so little people build something fundamental from the ground up? Why
not make it a side project and watch it grow?

~~~
BasDirks
We want to build a product. We will build it, investors or not. We are not in
it for the cash. We are in it for the positive impact.

~~~
sheeshkebab
Why bother with investors then? If product has positive and useful impact,
you’ll get money from clients.

Investors are a painful crowd to deal with, very sneaky leagalease and make it
easy to lose your product/company, esp if it gets any traction.

~~~
BasDirks
Could you elaborate on the painful crowd part?

~~~
edoceo
When it just you and clients paying there are two parties in close alignment.

The investor third party doesn't want what you or your clients want.

You want to build a good product that people like and use.

Clients want a good product.

Investors want to increase capital.

So, while you and clients walk a path, together. The investor is there for a
different reason.

And that reason can create uncomfortable situations.

You and the clients can solve problems together.

How does the investor solve their issue? Where does their increase in capital
come from? Your time and your clients money.

------
rememberlenny
Play www.pioneer.app, show progress, and you should be in good company in two
weeks.

~~~
algo_trader
The site has some impressive names. First time i have heard of this. Anyone
has experience with this?

How do you "earn" points? Is your project voted by the experts (ok, great) or
by "other players" (well..) ?

It seems you need to reach 10,000 points which a lot.

~~~
legionof7
I won Pioneer a little more than a year ago. It's been absolutely amazing for
us and we met great people through it. Best benefit has definitely been the
community you join.

Projects are voted on by experts and other players.

------
AlchemistCamp
Fundraising is just about the least meritocratic part of startups. Depending
on your social circle and markers of class, the process can be very easy or
near impossible for a first time founder. For most, it's extremely difficult
to get someone to invest in your company when you're still working a full-time
job on something else.

> the one thing we want most in life is to work on our product full-time

Can you cut expenses and live off of savings for a few months? If not, can you
self-fund it as a side project until it can cover your living expenses?

~~~
BasDirks
> Can you cut expenses and live off of savings for a few months?

We are definitely considering this.

~~~
AlchemistCamp
There's also no shame in taking it on in a way such that's more of a lifestyle
business than a startup.

The primary reason Alchemist Camp exists is so I can later self-fund the much
more ambitious startup I couldn't raise money for previously.

------
fma
Do you have local incubators nearby? They will have pitch events and other
resources.

i.e. I live in Atlanta and here's just one random event I found at Atlanta
Tech village.

[https://atlantatechvillage.com/events/upcoming/golden-
seeds-...](https://atlantatechvillage.com/events/upcoming/golden-seeds-office-
hours-2020-03-05/)

You'll need to network. Even if you don't need the money because you're
bootstrapping, having advisors who have experience in your space is helpful.

~~~
BasDirks
Good point about advisers. That's going to be reason enough to seek out people
in this kind of space.

------
rorykoehler
Have you considered bootstrapping until investors come looking for you? This
question is a bit like how do we do marketing. The short answer is use your
network to get intros. If that fails cold call (use LinkedIn, blogs etc for
less generation). Make sure you target on investors that are interested in
what you're working on already. You need alignment. Also consider that
investors are like sheep running after trends. They also are only interested
in companies that can reopen them 100x plus on their investment. You might
have missed the investor boat for your specific type of company and that might
be a blessing in disguise. If you bootstrap check out indiehackers.com . You
can make a successful profitable business that you can work on full time
without investors. In fact its easier now than ever.

~~~
aloukissas
Would 100% recommend checking out indiehackers.com and their podcast. Tons of
profitable SaaS businesses there with zero investors.

------
jtwaleson
I'm in NL and have some experience and contacts. E-mail is in my profile if
you'd like to have a coffee. Also, we're currently evaluating test automation
tools and frustrated with most solutions so would love to hear your pitch ;)

~~~
BasDirks
Appreciated, I will reach out.

~~~
tluyben2
You can drop me a line as well if you want. My contacts (VCs) might be
interested in your product: I am curious myself as well from the tech point of
view.

------
x0x0
Read Leo Polovets' startup de-risking guide and start de-risking your startup.

[https://www.codingvc.com/how-to-de-risk-a-
startup](https://www.codingvc.com/how-to-de-risk-a-startup)

Also, talk to a lawyer immediately and make sure you have clear ownership
given your employment elsewhere in the same industry.

What worked for me: build a savings account so I could take a year off work
and a significantly reduced salary for years afterwards. Accept the required
lifestyle compromises.

Also, you should be super clear about who your buyer is, pricing, and if you
do sales or not. None of these have a wrong answer, but they all lead to
different companies.

~~~
BasDirks
> Also, talk to a lawyer immediately and make sure you have clear ownership
> given your employment elsewhere in the same industry.

This has been sorted with HR, and I have written consent for any secondary
ventures.

------
thesandlord
> the one thing we want most in life is to work on our product full-time

Do you need investors for this? Can you bootstrap? How much revenue do you
need and how quickly can you get there?

Investors, especially VCs, will want to see how you can become a billion
dollar company. If that isn't what you want, then this might be the wrong path
to do down.

However, there might be angel investors who agree with your vision and want to
help you succeed. I don't know what the scene looks like in the Netherlands
but try to go to networking events, reach out to people you find online, etc.

~~~
BasDirks
Bootstrapping was our initial plan, but we won't shy away from ways of
accelerating the process.

------
giansegato
Some quick thoughts:

\- Option A. Bootstrap and get to the point where you can pitch VCs by
yourself

\- Option B. Build a reasonable MVP, collect some metrics and join an
accelerator with a good track record (obvious example is YC, but others
exist); some metrics to judge them: average money raised after the program,
average pre money valuation after program

\- Option C. Family and friends!

\- Option D. Good old social networks: you cannot imagine how many angels
write "Angel investor" in their bio on Twitter / LinkedIn / etc

~~~
BasDirks
Thanks. We are open to all of these options. Can you expand on pros and cons
of these from your perspective?

------
JamesBarney
Outside of San Francisco and NY it seems much harder to raise money.

The startups I know who did it outside of San Francisco did it this way. They
self funded or developed about a 1000hr MVP. They then took this MVP to
friends and family to raise an additional 100-200k which kept them going long
enough to get to a level of self sufficiency.

At this point some took capital to scale and others just continued to
bootstrap.

------
eaenki
1\. Almost all the capital is in SF/NY. Move accordingly. Good luck with the
Visa- it’s going to be a PITA

2\. Have founders who raised capital as friends. Good luck with that too!

3\. Now if you have a decent looking product and a plausible story you’ll
raise seed

Or, you know, getting into YC kinda takes care of all 3 points.

Also, getting insane traction on your own, like WhatsApp did, takes care of
all 3 points.

~~~
Answerawake
"Also, getting insane traction on your own, like WhatsApp did, takes care of
all 3 points."

...do you think there is space and/or interest for a WhatsApp clone?

~~~
francescopnpn
I don't?

------
sub7
Finding investors is easy (use AngelList), getting them to invest is harder.

At your stage, they will look at team, traction, and social proof. Generally
being exceptional in 1/3 of the above criteria will give you a pass on any of
the other 2.

My best advice is hustle your way to 10 users and if they're happy go raise a
seed round.

------
fbelzile
Are you sure VC funding is needed to get started? Is there a reason you ruled
out bootstrapping?

Sure, you probably won't grow as big as fast, but you'll remain totally in
control and enjoy the freedom of working for yourselves.

------
pascalxus
the first thing you should do is talk to customers, or potential customers.
don't make the mistake of building something people don't want. I know your
currently thinking: "this is a product people will definitely want because of
X,Y,Z". But, you really need to test those assumptions. You'd be surprised how
people might react.

------
einarvollset
This is the kind of thing we fund: tinyseed.com

..though unfortunately we run batches, which may not fit your timeline
currently. Working on it..

------
harel
My advice would be: don't.

You can spend your time building a great product while being in employment.
You don't need all the features and all the bells whistling at launch. You
need to do what you do, the best you can do it. Once you get the product out,
learn how to market it or pay someone to do it. Get some traction, get users.
Learn your users, learn from your users. Improve your product. If your product
is great, you will have users and they will pay you money. One morning you'll
wake up to a reality where your day job is no longer necessary. Then quit, and
work full time in your OWN company, answering to no one but yourselves.

OR,

You can spend your time chasing angels, VCs, people with money in NY or people
with money in SF, pay lots of cash to lawyers to get you Visas, travel,
shmooze, present, become a master of Powerpoint and Excel, a lord of small
talk, a craftsman of due diligence interviews. Everything except building a
great product. And yes, you might get some money, but you'll wake up one
morning realising your "business" is not really yours and you you are just
working for a different boss now.

~~~
tmpz22
> A craftsman of due diligence interviews

We're talking about Silicon Valley right?

~~~
harel
I was actually talking about investments in general. All the ones I was
involved with had due diligence done on them, and I was "interviewed" by
people hired by the investors to make sure the tech is solid.

------
yhoiseth
Sounds like [https://earnestcapital.com](https://earnestcapital.com) is right
up your alley.

------
Ace__
Hello BasDirks.

1\. Build bridges with investors before you may need to cross them, ie. Don’t
go to them when you need the money. There are a multitude of angles to use,
but each angle has to come from a core place of self-less and selfish
interest. Know what they want and need, know what you want and need. Each
angle will also dictate how early you can / should get on their radar.

2\. If you are introducing your startup to them, then around 6 months. If your
angle is to aid startups in their portfolio, introduce startups to them
(filter them, don’t send them any and all), or introduce family offices
looking to put funds into a pool; then you can contact them a lot earlier.

3\. There is another way that you can connect with investors, “get an intro to
us via someone in our network”. With some investors this will be the only way.

4\. Note the investor landscape, find out their investment thesis. See if
their portfolio has any that could be competitors, any synergies, etc.

5\. Find out the required milestones (for your current stage and the next
one). This can be a difficult one to find out, for it can pin some of them
down a bit too much, especially when they take so many other things into
consideration. If they don’t mention it on their site, and there is nothing in
Crunchbase et al, you’ll have to ask them down the line.

6\. Find out more about the appropriate partner at the VC firm whom is
involved in your niche. If you can’t find the appropriate partner, aim for the
top, and have them point you in the right direction.

7\. Acquire information about the partner and use it to formulate an email
that is about them. I will typically provide a few of my thoughts on something
they said in an article. They will be genuine thoughts. No brown-nosing, no
compliments for the sake of it, etc, etc.

8\. Find out the firms current position in the fund life-cycle: are they open
to new investments, only open to portfolio synergies, only follow-on funds
left, etc.

9\. If the investor’s portfolio has competitors and/or synergies find out
where they stand on this. Some will be open to funding competitors, some
won’t. If so, find out how things are kept ethical and above board.

10\. Find out what their investment approval process is; stages, duration,
etc.

11\. Ask them for their due diligence (DD) checklist, and work on that
organically. Until then, use this one: [https://seraf-
investor.com/compass/article/seraf-toolbox-due...](https://seraf-
investor.com/compass/article/seraf-toolbox-due-diligence-checklist)

12\. DD goes both ways, so find out what you can about them, what they are
like after investment.

13\. Prepare a presentation deck, not a pitch deck, and present it to your
team. Let your team know beforehand, and to attempt to trap and flummox you as
you walk them through it.

14\. Update the deck and send it to a few of the investors, and use them as
data points. The reason it’s not a pitch deck is because the deck should
explicitly state that you’re not looking for funding at this moment in time.

15\. Send it to ones you either have good relations with, and ones that do not
fund in your geographical area. There are some gems out there who will go out
of their way to aid you and to give you feedback. Granted they may not know
the launch country market, but they will know the startup niche. Basically
work your way inwards to the set of investors you are targeting, using the
feedback to hone and refine startup / deck.

16\. If you don’t want to slice by geography, or want to start closer to home,
slice the investors into tiers. Can be based on many things, niche relevancy,
track record, connections, dumb or smart money, etc. Work your inwards from
the ones you least want.

17\. Once you get to the set of investors you are interested in, same thing,
not looking for funding yet. If it’s a decent startup / deck you could be
asked to come in for a chat, or to keep them updated as to your progress.

18\. If you are going to go down the path of external funding, then investor
pre-validation is vital.

19\. Keep them informed as to your progress, monthly update is fine. Keep it
short and to the point. Be brutally honest, so good and bad, hits and misses.

20\. Even if your angle of approach is for your own startup, keep an eye out
for any startups that you think they would be interested in. Same thing with
investors and family offices, some of them go solo (or dedicated fund
manager), some want to put their funds into a pool.

21\. When you are ready, send the pitch deck.

One last thing, no one ever got funded off a pitch deck. Napkin maybe. but not
a deck. It’s a foot in the door at best. Besides, founder(s) of an early stage
startup, they’re investing in you.

Copied from a place I do not want to promote at the moment.

Cheers, Ace.

------
smarri
Do you need investors?

------
adamqureshi
You don't find investors. Investors find you. Ship your product and prove your
business model. Investors will come to you.

~~~
pisarzp
I think it's a bad advice. If you only wait for investors to find you, you
don't run competitive process, don't have enough options and you give up your
shares at too low price.

