

How To Raise A $1M Seed Round - peterkchen
http://techcrunch.com/2012/05/13/how-to-raise-1m-seed-round/

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tomasien
This article makes some great points, but if you had to identify 1 point they
made in the article that really pointed to "how they raised $1m" it's this:
they had 120 introductions to angels and VC's.

Holy. Shit. I've had maybe 4 in the year since I started out, and I've raised
money from all 4. 120? Obviously all the points they make are GREAT, I really
do like this article, but there are lots of people with good products,
pitches, revenues, etc. and they can't raise $1mm because they don't know 120
investors.

Am I wrong? Does everyone have a network of a 120 investors?

~~~
jandrewrogers
I raised my first round without knowing any VCs, and it took a long time while
talking to dozens of VCs. I will give some perspective of someone who made it
through the gauntlet:

First, it requires considerable persistence (and obnoxiousness) to get
meetings with dozens of VCs if you do not know them. I did not have that level
of obnoxiousness, I worked with someone that did. This is a significant
barrier.

Second, if you actually have a hardcore technology startup, you are
essentially screwed. Only a few VCs will consider investing in significantly
new technology. Despite what they say, there are only a minority of VCs worth
talking to that will invest in fundamentally new technology despite the
marketing. On the other hand, those VCs that do are quality VCs in most
regards.

Third, if you lack the connections then bootstrapping is a very good option if
at all possible. The further along you are, the greater the options available.
Even if it seems more difficult in the short-term, it is usually less
difficult in the long-term.

As a broader observation, from what little I've seen most startup pitches fail
because they are horrible, both at the pitch level and idea level. My pitch
was horrible but my mastery of a compelling idea enabled me to find VC
funding.

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brainless
We are a tiny startup in India. I am a techie myself and have failed twice in
sustaining business (teams of 12 members both times). We have failed getting
into YC but have never lost hope. We will apply again, our product is nearing
MVP.

The biggest thing is to keep fighting. Being a techie helps in reducing your
initial costs. There are other things you can do. We, for instance, got our
product sponsored hosting from SoftLayer (thanks to them). We are also going
to ask RackSpace to sponsor us once we start closed beta. We keep in touch
with everyone around and people in the Valley. We are very far away but we
have ambitions and experience.

We read a lot of very detailed battle stories and get extremely inspired. That
is I believe the spirit. There is more competition than there ever was, and I
have myself been watching (and failing) for about 6 years now. The important
thing to remember: it is NOT EASY, face it, continue doing what you want to
do.

~~~
RealGeek
How do you get sponsored hosting?

~~~
brainless
We looked around at many hosting providers who are sponsoring companies from
incubators like YC, TechStars, 500, etc.

Then we approached and connected with RackSpace and SoftLayer (through
LinkedIn). We explained our concept and got sponsored from SoftLayer. We will
approach RackSpace with details too.

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sparknlaunch12
>> _"The Slide that Made the Difference Between Getting Funding/Not Getting
Funding"_

Was their CAC model really the slide that made the difference? The basis of
the model depends on finger in the air assumptions. It shows they considered
how they will convert leads but how to they validate these assumptions?

>> _"If you can convey to VCs that you have a repeatable business model, and
understand the microeconomics of your business, then you are golden."_

I suspect this implies the business should be able to make money?

~~~
patio11
Actually understanding those numbers is kind of like product development: you
would think it is table stakes, but a _surprising_ number of startups
completely fail at it, so FizzBuzz tests like "Can you ship _anything_?" and
"Can you invest $1,000 and have at least $1,000 of revenue?" actually provide
useful signal.

"Shipping a product; customers use it; at least one customer acquisition
channel works in principle" is actually fairly fall along on the
derisking/valuation/etc timeline.

~~~
glimcat
Even among well-funded startups, having a usefully specific definition of the
target customer and where you fall in relation to their existing value
structure is something of an accomplishment.

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alain94040
I belive traction is #1. Traction will give you intros and everything else you
need to raise money. By the way, the fact of getting into YC is one example of
traction.

~~~
aaronblohowiak
>the fact of getting into YC is one example of traction

social proof

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jbkring
what? an insightful article on techcrunch? oh wait, it's a guest writer.
whatup sunil!

