Investing is not about chasing whatever is hottest. Don’t let big investors make decisions for you and don’t get caught up in exclusivity.
Be careful not to put too much weight on what other investors think. Instead, lean on insights from contacts you trust. Also be open to that random email from a company you haven’t heard of– being unreasonably exclusive could cause you to miss a huge opportunity.
Promising startups have high demand, meaning your reputation has a lot of value. Be upfront about your reason for investing, and be available for your founders.
In startup land, there are more people who want to invest in good startups than there are good startups– this makes your reputation essential. Founders are also now doing reference checks on investors before making deals. To keep a clean rep, be clear about your reasons for investing and be as available as possible.
Though it sounds counterintuitive, it’s easier to start a hard company than an easy company so don’t write off “easy” companies. “Easy,” less risky companies often have trouble getting investor attention.
Good founder traits: obsession, frugality, focus, and love. Founders should churn out strong ideas often, communicate extremely well, and improve constantly.
Founders must have great ideas often and be able to explain their product with ease. Top founders can execute at a breakneck speed and have an incredible rate of improvement. You won’t see a return investing in an average founder.
Look past the hype! Look at how many people are already using the platform or product, how often they’re using it, and whether or not you think they’re telling their friends about it unprompted. Many bad ideas look like good ideas; good ideas that look like bad ideas can be breakthroughs.
Human intuition about exponential growth isn’t very good… in fact, it’s pretty crap. Be sure to model out the far future vs. short term company growth. When looking long term, be sure to look at least 10 years from where the company is now.
Get the full lowdown on the tool that changed startup financing, from the authors themselves.
In March of 2018, something big happened: the best startup investor on the planet shared its entire playbook. This investor also happens to be the world’s most famous startup accelerator, Y Combinator. From Airbnb to Doordash to Dropbox to Stripe, YC has funded many of the biggest
startups you can name.
We wanted to put YC’s Startup Investor School videos right at the fingertips of our favorite people out there, Wefunder investors. To that end, we put in some crowdfunding and Wefunder-specific tid-bits, too.
While we are a YC Alum, Wefunder has no current affiliation with Y Combinator. So, many thanks to Y Combinator for all of the video material used on this page! They produced and own all of these wonderful videos while we wrote the summaries.
786 startups have raised $333,610,504 on Wefunder
Wefunder supports three different federal laws that allow startups to raise money legally. To comply with the law, Wefunder Advisors LLC and Wefunder Portal LLC (both owned by Wefunder Inc) also list startups depending on the regulation used.
Legal May 16th 2016
Wefunder Portal LLC
for 693 startups
Wefunder Advisors LLC
for 162 startups
for 3 startups
Curious how well the companies have done? Or how many raised follow-on financing?
Some fine print: 1) These numbers include startups currently live on Wefunder if they pass their minimum target. 2) Some startups use two different laws at the same time (i.e., Regulation D and Regulation Crowdfunding).