How Startup Fundraising Works

How Startup Fundraising Works | Startup School

Рет қаралды 213,820

Күн бұрын

YC Group Partner Brad Flora has seen startup fundraising from every angle: as a founder, as one of the most prolific angel investors in Silicon Valley, and now as a YC Group Partner. Brad has coached hundreds of companies on fundraising. In this talk, he shares stories and advice on how modern startup fundraising works.
Paul Graham Fundraising Essays:
www.paulgraham.com/fundraising...
www.paulgraham.com/startupfund...
www.paulgraham.com/convince.html
www.paulgraham.com/herd.html
Geoff Ralston's Fundraising Guides:
www.ycombinator.com/library/4...
• Fundraising Fundamenta...
YC Fundraising Resources:
www.ycombinator.com/library/2...
www.ycombinator.com/library/6...
www.ycombinator.com/library/7...
www.ycombinator.com/library/4...
www.ycombinator.com/library/3...
Apply to Y Combinator: yc.link/SUS-apply
Work at a startup: yc.link/SUS-jobs
Chapters (Powered by bit.ly/chapterme-yc) -
00:00 - Intro
00:27 - Fundraising resources
02:13 - 7 fundraising myths
04:06 - Raising money is glamorous
06:51 - The need to raise money before starting a startup
10:10 - My startup need to be impressive to raise money
13:56 - Raising money is complicated, slow, and expensive.
18:04 - I am going to lose control of my company
21:58 - I need a fancy network to raise money
23:43 - If investors reject my startup its a bad startup
26:35 - Wrap up - This isn't for you

Пікірлер: 144

@ycombinator Жыл бұрын

For detailed advice on how to actually get in touch with investors and set up meetings, check out this video: www.ycombinator.com/library/71-how-to-get-meetings-with-investors-and-raise-money For YC's comprehensive guide to seed fundraising, check out this guide: www.ycombinator.com/library/4A-a-guide-to-seed-fundraising

@nicolasguillenc Жыл бұрын

thank you 🙏🏽

@paramveerdhoot6415 Жыл бұрын

Do people still invest in hardware startups.... I feel like funding for hardware startups is rare and nearly non-existent now?

@benholmquist3589 10 ай бұрын

I was about to ask this question! Good pin.

@wumbo2421 Жыл бұрын

I'm currently 23, live in Southeast Asia, not from a rich family, and I just started out my career. Never in my life before thinking about building a startup. But in the past few weeks, I have watched several YC videos and get inspired to build my own startup! Sure I still have a lot of work to do, but learning from all of these great videos, I get assured that it's not impossible. Thank you YC for the great inspirations.

@DaniIhzaFarrosi Жыл бұрын

Fellow southeast asian here, good luck 🍀

@mathewtomas8058 Жыл бұрын

Do you have a technical background? I’m looking for a co-founder.

@behikulo_TJ 10 ай бұрын

Hi @wumbo2421 want to connect?

@pranavpalasamudram6119 10 ай бұрын

I'm from a similar place. It's amazing when you focus and just build what people want!

@ernestoquismorio3271 9 ай бұрын

Atta go SEA!

@pulsenewsarena Жыл бұрын

"Coin-operated lizard people" ... I will forever remember this when approaching investors. Lol. And Thank You!

@minaraver 9 ай бұрын

I'm building an assistive technology company and had an investor tell me during a meeting HE asked for, "This is a great idea. Someone can do this, but I don't think it's you." So I stopped fundraising, dialed back my vision to the first, smallest, most accessible piece and it's working! While almost everyone around me is trying to stop me, it's great to have videos like this that prove what I'm doing is exactly how founders win. Thanks!

@stellaariana1276 4 ай бұрын

Yea don't listen to those people. Would probably just as easily take your idea and have someone else fulfill it. It's a tactic meant to discourage. I hope it's going well!!

@machapuis 9 ай бұрын

His last phrase: "You can do this. You can do this." 😢❤

@leonidkhoroshko9585 2 ай бұрын

This is some kind of different reality which i guess works in US only. I think i`ve spoken to 100+ investors, spending 1.5-2 years and raising 0 before i realized that all those investors are not interested in you or your team or your product. All they ask is what is your revenue and growth rate. Thats it. At first they will say "oh you are too early for us, but please let us know when you will reach X MRR" then "or you are too late for us, there is too much competition". Even though in your pitch deck it is clearly explained why you are different. Long story short, after we stopped chasing investors and focused on business, we managed to make it work organically without investors. Now we have entities in US, Europe, Asia and continue to grow.

@allthingsgenai Жыл бұрын

Thank you. This is a fresh breath amidst all the negativity. Why don’t we have a world where builders get more air to experiment and find something people want. I have spent countless hours on my own to come to that stage. Now I have a business which is generating revenues. Still fighting and will keep fighting.

@RuRichelieu Жыл бұрын

Proudly bootstrapping but love the content!

@lesptitsoiseaux 6 ай бұрын

Brad, I'm 47, a senior technical product manager who coded before. I'm building an app that solves the problem of trust between people. Your video was a soothing balm to my heart :) Being very conscientious in everything I do I tend to over engineer and worry too much. Very thankful for your video. Cheers from Vancouver! :)

@aldousbendana1382 20 күн бұрын

I'm 1 year into my business of agricultural products trading and talking to different investors and pitching for additional capital. I'm really glad I was able to stumble upon YC videos. My goal is to build my own feedmill to supply premium quality feeds at a reasonable cost for Filipino livestock and poultry farmers! I'm now planning to apply for YC's funding. Love from the Philippines, YC!

@shimacharles Жыл бұрын

Thank you, Brad. I learn a lot each time I watch a Y Combinator video. The journey is not for the faint of hearts.

@livlabsfitness Жыл бұрын

Recommended viewing! Brad has a knack for simplification. This video is worth the time of every founder just starting (or struggling through) the early fundraising journey.

@TheAccountabilityKing Жыл бұрын

This was just the video i needed for my confidence to manifest my start up. Thank You for this!!

@foundergen3266 Жыл бұрын

I really thank you for this video. I always wanted to know that. And you took away my fears because now I understand that everything is so simple. You always imagine everything to be so difficult when you read about start-ups in the media. Thank you very much

@chunyuou9944 6 ай бұрын

The last bit is the biggest challenge for me, “you can do this”, thank you Brad.

@_orangutan Жыл бұрын

I'm currently building my MVP. I'm more on the technical side of things so these videos are absolutely informative. I'm still going through a couple of books as well, just to name a few.: - The Startup Owner's Manual - The Lean Product Playbook - The Lean Startup - The Founders Dilemma Keep up the great educative videos.

@richardmakura Жыл бұрын

Don't leave out Rework!

@dennisorbison7318 Жыл бұрын

do you happen by chance looking for a startup partner?

@realmuzfi Жыл бұрын

I am looking for a technical partner, I am also technical.

@piyushdeshmukh4706 Жыл бұрын

@@realmuzfi Can we sync to brainstorm and know more?

@reprovedcandy 7 ай бұрын

@@dennisorbison7318 Hey man, you've got to be more relevant in your approach here. You should ask what type of engineer the person is and gauge their interest in working on your product by presenting a high level about what you're aiming to build and what validation you've already done and why you're looking for a technical partner instead of continuing to contract/outsource etc. Your odds of finding someone go up by 100x+.

@user-lb2gu7ih5e Ай бұрын

By YouSum 00:05:01 Raising money is not glamorous; it's about quiet conversations. 00:07:01 Start working on your startup before raising money. 00:10:12 Investors are convinced by progress, not impressive pitches. 00:14:02 Fundraising can be quick, simple, and inexpensive with safes. 00:17:28 Implementing safes can change power dynamics when talking to investors. 00:18:06 Seed rounds today offer founders more control than ever before. 00:20:30 Bootstrapping a company forever is challenging and not recommended. 00:22:00 Investors prioritize profitable ideas over fancy networks when investing. 00:23:46 Rejection from investors doesn't signify a bad startup idea. By YouSum

@chapterme Жыл бұрын

Chapters (Powered by ChapterMe) - 00:00 - Intro 00:27 - Fundraising resources 00:50 - Paul Graham Essays 01:27 - Tactical guides 02:13 - 7 fundraising myths 02:28 - About 04:06 - Raising money is glamorous 06:51 - The need to raise money before starting a startup 08:19 - Example - Solugen 10:10 - My startup need to be impressive to raise money 12:49 - Example - Retool 13:56 - Raising money is complicated, slow, and expensive. 15:33 - SAFE - Simple agreement for equity 17:05 - Example - Asher Bio 18:04 - I am going to lose control of my company 19:17 - Example - Zapier 20:29 - Bootstrapping forever sucks 21:58 - I need a fancy network to raise money 23:18 - Best for Founder to talk to investors 23:43 - If investors reject my startup its a bad startup 24:00 - Example - nVision 25:09 - WhatNot 26:35 - Wrap up - This isn't for you

@astrarai-thesobercoder Жыл бұрын

Thank you.

@jakirsenglishworld1151 6 ай бұрын

2:01

@jakirsenglishworld1151 6 ай бұрын

15:33

@godwinchukzy9906 7 ай бұрын

I'm about to start up my business!Thank you so much yc for all this videos, actually fund raising is very hard.

@zayyanusmani5360 8 ай бұрын

Thank you so much Brad. I neededdd to hear the last part. "I def can do this". Much Love

@cheeseshaper 2 ай бұрын

Simply an amazing video. I learned so much from it that I had no idea about. So many misconceptions addressed and debunked. Thank you!

@boriszhilinskiy8187 Жыл бұрын

Extremely transformational and inspiring! Thank you so much!

@sammiezzy Жыл бұрын

Great video, full of top-level advice

@aif1992 Жыл бұрын

One of the best videos I watched about Start-ups. Thank you!

@TheLivesyoutouch2023 4 ай бұрын

One of the best video on fundraising and Investors… this will give strength to many entrepreneurs 🤟🏻🙏

@alexanderj4545 7 ай бұрын

Great video Brad! #2 depends on your market. Medical Device development is somewhat different, although some of these ´fail fast´ procedures can be used.

@nathancovey 11 күн бұрын

“You don’t need every investor to like what you’re building, you just need a few of them to believe.”

@carlatashkadeh5890 Жыл бұрын

Thanks YC. You gave me courage to dream big with Loodio!

@youssefsaid6076 Жыл бұрын

Amazing video! Simple and to the point 🎉

@amarelswtor5446 11 ай бұрын

Thanks Brad. Loved the energy!

@gregoryburne5251 Жыл бұрын

Such concise and helpful advice. Especially at 1,75 speed. It’s a deluge.

@tobiasomeyi1776 Жыл бұрын

Thanks very much. Great and enlightening information...Keep up the great work YC🙌🙏

@jakestryker35 10 ай бұрын

Excellent presentation ! Very straightforward

@Plokhoj Жыл бұрын

Thanks for the video, you definitely can motivate people 😊

@marcesmack Жыл бұрын

Thanks man. This was exactly the video I needed to watch. And I mean it. 💯

@terencelewis8856 Жыл бұрын

Excellent advice, practical and executable.

@nftsasha 23 күн бұрын

Thanks, fam. The last 2 links under "YC Fundraising Resources" are 404s

@duongtt3 Жыл бұрын

(V3) super helpful for me! thank you so much for those valuable resources and sharing🙏🏻

@eliagreenberg4500 Жыл бұрын

Great content! What makes bootstrapped startups not make enough money? Isn't it a reflection of how valuable your product is to the customers?

10 ай бұрын

Such a great video and content. Thanks Brad!

@superhanuta 7 ай бұрын

I really needs to see this, thank you!

@Chalewey69 Ай бұрын

This was great information, thank you for sharing!

@WTK839 3 ай бұрын

one of the best videos I've seen.

@darrinakpambang3810 9 ай бұрын

Good day. Yc videos are the best out there. Can’t wait to have meeting with you

@tsaplin2528 2 ай бұрын

Awesome!! So helpful! Thanks a lot 👏🏻

@ronlussari Жыл бұрын

Great video. You are an exciting communicator.

@randyschwaggins Жыл бұрын

Love the video and advice. One point that I wanted to ask with regards to pre-rev startups...isn't there a minimum bar you need to show investors at this stage? Ie...even if you have a well presented idea and SAFE agreement in place, isn't it still massively important to present investors with; A. Well documented research to establish the product/market fit B. Something that resembles an early-stage MVP C. A team that looks (on paper at least) able to reach early commercialisation You didn't seem to touch on these points...but maybe you did and I just missed it...I just seemed to hear you talking about various businesses where you or other investors invested, based simply on a well presented idea. Surely an business idea...even one that makes total intuitive sense...isn't enough to secure investment pre-rev without the founder identifying - at the very least - a large body of potential customers who say they suffer from the problem that the potential product/service is being designed to solve? And moreover suffer enough to be willing to buy a solution to that problem? Any thoughts on this would be much appreciated!

@satyamskillz Жыл бұрын

Useful insights!

@yashdrums6468 Жыл бұрын

Great video! Thank you.

@manasgond3633 Жыл бұрын

Lovely video. Do YC help company to raise apart from their batches/ selected company?

@learninmachine Жыл бұрын

Thank you so much. I just wish I lived in the USA. Getting the visa is the hardest thing for me.

@thedimplenest 7 ай бұрын

Thank you for this seriously!

@carloslfu 10 ай бұрын

Awesome video Brad!

@withfirapp Жыл бұрын

Thank you so much Brad

@patkorie 10 ай бұрын

Thank you for this video.

@dani.dimitrov 5 ай бұрын

I love you guys. Keep up the good work!

@aureliammbasu6622 Жыл бұрын

Very insightful..!!

@Wasalami Жыл бұрын

"Hundreds of thosands" :D Great video through!

@mysteriousshadow395 9 ай бұрын

I like the enthusiasm

@razvangrigore322 2 ай бұрын

Great advice and one of the best videos on the subject I saw in a while. Just one note missing: What if you are not from the US? Do the SAFE’s logic still apply for an EU company?

@j5665 9 ай бұрын

So, I've got a question: Are SAFEs available for those startups outside of North America? (Can the company be formed in 🇺🇸, but the founders reside elsewhere? Say Britain, for instance).

@hiranga Жыл бұрын

Question - how did early Zapier SAFE investors get return on their investment? How did they "cash out" ?

@mushfiquekhan Жыл бұрын

thanks Brad for this awesome video, can you pls advise/suggest/guide, how I can talk to you for 10/15 mins only, I've my product/LIVE ready and its been used and liked too, just need a little of your time, pls advise or even YC can assist too, just need a little assistance here.

@recks1151 Жыл бұрын

love this guy

@Johnnymarzo Жыл бұрын

The reference about zapier and how their first round was all SAFEs, how did those first investors get their money if that round was contingent on then next round which you said never actually happened?

@amirankurtanidze6966 Жыл бұрын

actually there is written either max valuation or discount on stocks, if the next round happens or in 2 years (as an example) whichever comes first.

@purawalker2537 6 ай бұрын

About to invest in my own App. Hopefully people love it.

@tylerthefailure Жыл бұрын

Great video!

@JamrockVybzTV 10 ай бұрын

Good stuff, thank you.

@cashyong8903 Жыл бұрын

Would this apply for service based start-ups as well?

@daveb4446 Жыл бұрын

This is great advice. It’s important to be practical and avoid following glorified stereotypes. Real life is nothing like the glorified stories on the internet.

@oltreenrico6021 Жыл бұрын

God bless y'all!

@matildeamarchandable 11 ай бұрын

Thank You for the inspiring talk! Namaste $$$

@BravoandBrave Жыл бұрын

very useful. thanks

@web3global Жыл бұрын

Amazing video 🚀

@phasematerialsresearch9319 Жыл бұрын

Thank you.

@BunhakHong Жыл бұрын

It’s aha moment and great advices.

@singhala Жыл бұрын

Great video. However, the hardest part is to line up the zoom calls. Which is not covered in this video

@ycombinator Жыл бұрын

We appreciate the feedback! We understand this video focuses more on the broader fundraising process and mentality required, but we've published content in the past that provides detailed advice on how to actually get in touch with investors and set up meetings: www.ycombinator.com/library/71-how-to-get-meetings-with-investors-and-raise-money

@vincentblue2455 Жыл бұрын

Wow! Thanks man

@domore1287 Жыл бұрын

Thank you

@Creative-Catalyst 4 сағат бұрын

If I am selected after the interview, do I need to pay any fees to YC? Is there any fee for the next four months?

@bluelaurel 6 ай бұрын

15:15 typical seed round 15:35 agreement template drafted by YC combinator 22:16

@scadeline805 2 ай бұрын

🔥🔥🔥 THANK YOU SO MUCH

@thanhnamnguyen7477 Жыл бұрын

thank you

@plexradio 6 ай бұрын

I have a startup idea, The device u r using to switch camera angel , we should make a foot version for it

@klausmaster5454 Жыл бұрын

Hi , i am having over 100 user daily but without revenue because its beta tester version of AI startup . Does i need start charging them or no need , to get found raising ?Customer feedback is really great 100% 5 stars 🎉 . Now fine tuning of model starting to be really expensive and we really need investors .

@prithviye Жыл бұрын

talking with an angel, got a term sheet, and having to do thousands in legal fees for my seed round. is this normal, and if not, should i search for a different angel?

@ycombinator Жыл бұрын

By using a SAFE there should be no legal fees: kzfaq.info/get/bejne/sKiFm7SBtbmdcY0.html

@craig4229 Ай бұрын

Epic content

@bennykokmusic Ай бұрын

Inspiring

@Thecoolestjen4477 2 ай бұрын

Do you know of any start up business grants for women who live in America but that can be used internationally to help obtain property and infrastructure?