I watch tons of videos, few as good as this, some really great analogies and thoughts across the board. Take the time to watch this…it’s worth it.
I have to say that I really love Paul Graham’s concise and direct writing style and content. I read it all, always, it’s gold!
However having been around for a long time its not that often I read something on an a well worn topic that I go “wow” what a great way to look at this…well he has done it again.
He has just updated the complex topic of fund raising for startups with a fantastic new article that really gets the the heart of the matter of investor sentiment and what often makes them invest – “confidence” of the founders – or as as Paul says “formidable founders”.
Read more here:
The excellent book “Venture Deals” by Brad Feld, Jason Mendelson gives a ton of great advice, one nugget you should know is smart Entrepreneurs, even experienced ones like me, get a stable of experienced mentors.
Here’s their specific advice:
These mentors can be hugely useful in any financing, especially if they know the VCs involved.
We like to refer to these folks as mentors instead of advisers since the word adviser often implies that there is some sort of fee agreement with the company. It’s unusual for a company, especially an early stage one, to have a fee arrangement with an adviser around a financing.
Nonetheless, there are advisers who prey on entrepreneurs by showing up, offering to help raise money, and then asking for compensation by taking a cut of the deal. There are even some bold advisers who ask for a retainer relationship to help out. We encourage early stage entrepreneurs to stay away from these advisers.
In contrast, mentors help the entrepreneurs, especially early stage ones, because someone once helped them. Many mentors end up being early angel investors in companies or get a small equity grant for serving on the board of directors or board of advisers, but they rarely ask for anything up front.
While having mentors is never required, we strongly encourage entrepreneurs to find them, work with them, and build long-term relationships with them.
The benefits are enormous and often surprising. Most great mentors we know do it because they enjoy it. When this is the motivation, you often see some great relationships develop. The Entrepreneur’s Perspective Mentors are great.
There’s no reason not to give someone a small success fee if they truly help you raise money (random email introductions to a VC they met once at a cocktail party don’t count). Sometimes it will make sense to compensate mentors with options as long as you have some control over the vesting of the options based on your satisfaction with the mentor’s performance as an ongoing adviser.
Carmine Gallo of Entrepreneur Magazine posted an interesting article, here is a summary of what she thought of Steve’s key success factors:
Thanks for coming to the workshop: Are you an Entrepreneur?, below are the slides for the first session in pdf format.
I look forward to seeing you at another Workshop or event and wish you all the best with your entrepreneurial or new career plans.
P.S. If you want to do me a favor (contribution) please donate to the Grameen Foundation via purchase of the book, OR if you have done that please rate the book on Amazon.
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