“Sustaining a successful business is a hell of a lot of work. Staying hungry is half the battle to make you more creative. It’ll impress the future investors – when you really need them – to grow.”
Topics: How, Key Factors, awesome Product, Duplicate, Mission (not impossible), Savvy, Creative, Communicators, Focused, Would I work for them?
Y-Combinator’s process. Over 12 years, Silicon Valley accelerator-turned-seed-fund Y-Combinator has invested in more than a 1000 companies. Its success stories include Dropbox, AirBnB, and Stripe – and other recipients of its investments – that [together] worth an estimated $100 billion today. Every few months, Y-Combinator accepts about 50 new companies into its three-month program. The results of this grueling application process – that consistently sets the internet ablaze – as anxious startup founders pose questions about the best way to gain entry. All entrepreneurs who secure an interview with Y-Combinator face a 10-minute Interview by a panel of YC alum & associates. Questions are shot-gunned at them, to see how well they know their market, product, co-founders, & themselves. It’s an intense process, and 10 minutes doesn’t seem like a lot of time. As a founder who once reached the final interview stage—full disclosure, I can confirm that it’s the nerve-wracking experience for Finding Funding.
Key Factors. While venture capitalists have long debated the key factors in startup success, the basic idea almost always boils down to three things: 1) Team, 2) Market, & 3) product. An outstanding combination of these means you have a tiny, perhaps half of one chance in 10000 of creating the next $1 billion startup. Checking only one of those boxes makes that fate even less likely (although you can still build a great business without venture-style returns)
The Final Four. [YC, not Basketball] To dispel at least some of the mystery around YC’s process, president Sam Altman spent part of his Annual Report letter on 02/16 detailing the 4 things the Seed Funder asks about a company before deciding to invest. Answer this quartet of queries correctly, and you might build the next AirBnB.
1) Will this company build something lots of people will absolutely Love?
“If so, and if the market is sufficiently large, the company has the chance to produce substantial earnings.”
2) Will this company be easy to Copy?
“The most successful companies I’ve worked with have a significant competitive advantage—network effect, proprietary technology, complex coordination, or some other barrier to entry of some other sort by a possible competitor.
3) Will these founders develop into “forces of nature”?
“As most people say, it’s hard to make money unless you invest with great Founders (ie, Serial Entrepreneurs). Defining what that means is usually left as an exercise to the Founder. Here are some questions I ask myself:
3a) Are these Founders relentlessly determined?
3b)Are they original thinkers?
3c) Are they savvy about running a business?
3d) Do they have new creative approach that I haven’t heard before?
3e) Are they good communicators (and so will they be able to hire, sell, raise money, talk to the press, etc)?
3f) Are they focused and intense?
3g) Do they always seem to find a way around obstacles?
3h) Would I work for them?
“These are all good Questions to ask, in order to evaluate a Startup, because you have to make a judgment about their possible trajectory. You are trying to predict where they will be in 3-5 years.”
4) Does this company have a clear & important Mission?
“Without this, I usually get bored. More importantly, companies that don’t have an outstanding Mission, usually have a hard time recruiting enough “great” people to work with them, and thus struggle to become very large.”
You need Passion not pedigree. Y-Combinator president Sam Altman notes that un-conventional characters with “non-traditional backgrounds” are among YC’s biggest success stories. By contrast, founders with extremely “tracked” lives (the pedigreed school, degree, & professional experience) may not be in startups for the right reason. Their mindset is bringing an idea they’re obsessed with to life, and are willing to do something unreasonable (what ever it takes) to see it happen.”
Comments: Do you any other Questions to know, to have the best response for Investors.
Quotes about Funding
“Stay self-funded as long as possible.” – Garrett Camp, founder of Expa, Uber & StumbleUpon
“Funding is the gas during the road trip of building your business. You don’t want to run out of gas on your trip, but on the other hand you’re not doing a tour of the gas stations of Investors. These are just the pit stops. If you’re not getting funding with a reasonable amount of time & effort, manage your Cash Flow better. Delivering awesome product is what it’s all about, then the Funders will beat a path to your door.”
“All the $$$ in the world wont make anything viral, but you can make something good and grow it slowly & wisely.”
“Don’t worry about funding, if you really don’t need it at first. It’ll waste too much of your time & energy,Today it’s cheaper to start a business than ever, because there’s lots of “freebies” out there. Do the research to find them.”
“Risk more than others think is safe. Spend more on development & testing. Dream your Vision of more success than others think is possible.”
from Quartz.com 17 Feb 17 enhanced by Peter/CXO Wiz4biz
For more Info. click on Finding Funding.