Investor Herd Dynamics
August 2013The biggest component in most investors' opinion of you is the opinion of other investors. Which is of course a recipe for exponential growth. When one investor wants to invest in you, that makes other investors want to, which makes others want to, and so on.Sometimes inexperienced founders mistakenly conclude that manipulating these forces is the essence of fundraising.
- ▪August 2013The biggest component in most investors' opinion of you is the opinion of other investors.
- ▪Which is of course a recipe for exponential growth.
- ▪When one investor wants to invest in you, that makes other investors want to, which makes others want to, and so on.Sometimes inexperienced founders mistakenly conclude that manipulating these forces is the essence of fundraising.
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. August 2013The biggest component in most investors' opinion of you is the opinion of other investors. Which is of course a recipe for exponential growth. When one investor wants to invest in you, that makes other investors want to, which makes others want to, and so on.Sometimes inexperienced founders mistakenly conclude that manipulating these forces is the essence of fundraising. They hear stories about stampedes to invest in successful startups, and think it's therefore the mark of a successful startup to have this happen. But actually the two are not that highly correlated.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at Paul Graham — Essays.