
How VC’s Get to “Yes” - daveambrose
http://robgo.org/2014/02/09/how-vcs-get-to-yes/
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jey
> fundraising is about “searching for true believers, not convincing
> skeptics.”

Interesting and well said. Makes sense, but I hadn't thought of it in those
terms.

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mathattack
This is a Sales truism too. It's much easier to convince people who believe
than people whose job it is to say "No". Early stage funding requires shared
optimism between the funder and funded.

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syllogism
> For example, there is sort of a magic number for SaaS businesses to achieve
> $100K MRR, which is usually a good benchmark for being able to raise a
> decent VC-led series A or B.

Wait, what? If you have $100k MRR, why do you need any venture capital at all?

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sanswork
First two reasons I can think of.

Imagine you're doing that on an expensive cloud hosting setup and your
expenses are really high. An infusion of capital could allow you the
opportunity to build out your own server infrastructure(or pay annually on the
cloud infrastructure) and dramatically lower your expenses and push your
margins up a lot.

It would also offer you the flexibility in your funnel to offer back loaded
deals to get larger clients onboard.

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syllogism
An extra large EC2 instance is $360-$3311 per month. Maybe I have an
imagination failure, but I can't see how cloud costs could be past 10k per
month. So, how much could the infrastructure cost, and still be worth the
investment?

Maybe I just don't understand the costs.

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sanswork
First two ideas that spring to mind would be a realtime video encoding service
and a CI service. In both cases your users to server ratio would be very low
and in the first case your data costs would be very high. So you might be only
making profit of $X per server per month even if your revenue is $XXX per
server. When you're running your own servers you need a big investment up
front but lower operational costs which is where the funding would come in.

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lowglow
Relevant: [http://www.techendo.co/posts/what-venture-capital-
companies-...](http://www.techendo.co/posts/what-venture-capital-companies-
look-for-in-a-startup)

