How to Fund a Startup
November 2005 Venture funding works like gears. A typical startup goes through several rounds of funding, and at each round you want to take just enough money to reach the speed where you can shift into the next gear.Few startups get it quite right. A few are overfunded, which is like trying to start driving in third gear.I think it would help founders to understand funding better—not just the mechanics of it, but what investors are thinking.
- ▪November 2005 Venture funding works like gears.
- ▪A typical startup goes through several rounds of funding, and at each round you want to take just enough money to reach the speed where you can shift into the next gear.Few startups get it quite right.
- ▪A few are overfunded, which is like trying to start driving in third gear.I think it would help founders to understand funding better—not just the mechanics of it, but what investors are thinking.
Paul Graham — Essays files mainly under blogs. We currently carry 219 of its stories.
Opening excerpt (first ~120 words) tap to expand
Want to start a startup? Get funded by Y Combinator. November 2005 Venture funding works like gears. A typical startup goes through several rounds of funding, and at each round you want to take just enough money to reach the speed where you can shift into the next gear.Few startups get it quite right. Many are underfunded. A few are overfunded, which is like trying to start driving in third gear.I think it would help founders to understand funding better—not just the mechanics of it, but what investors are thinking. I was surprised recently when I realized that all the worst problems we faced in our startup were due not to competitors, but investors. Dealing with competitors was easy by comparison.I don't mean to suggest that our investors were nothing but a drag on us.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at Paul Graham — Essays.