Startups are a uniquely closed market. Some of the best startups are the hardest to invest in, and, if all money is green, you need an advantage. Your reputation and goodness determine your deal supply.
Commit to the success of your portfolio companies (... founders talk!).
Simply put, a great investor increases the odds that their portfolio companies succeed! When you help companies succeed, founders will share that with other founders and you will see a bump in your deal flow. The more deals that cross your desk, the more likely you are to compile a successful portfolio so it’s cyclical!
If you hurt companies, your deal flow will dry up.
If you treat founders or companies inappropriately, news will spread. This will likely happen extremely fast and permanently ruin your ability to invest in and work with top companies. Long story short: don’t be a jerk :)
Start by sourcing responsibly: don’t stalk or pester founders! Be sure to respect founders’ time by accepting shorter meetings and arriving on time. Lastly, pay for the coffee– this is pocket change compared to the investment you’re thinking of making and it can mean a lot to the founder.
Respecting a founder’s time is crucial. In meetings, give them your full attention and be an active, engaged listener. When it’s your turn to speak, respond quickly and directly. Also be sure you understand any technical terms they use to prevent confusion down the road. Lastly, don’t ask for non-standard things, and when you make a promise– remember that your word is your bond.
Do your part in closing the deal and becoming a shareholder (woot!).
Sign documents quickly and wire your money immediately. This demonstrates you’re serious about your investment and that you want to save the founder time and frustration. Also consider bringing in stellar investors in your network. Once the deal is sealed, bow out gracefully until the founder reaches out for help.
Maintain a relationship with the founder and team. Reply to monthly status emails, even if just a quick “Keep up the great work!” Help where you are helpful, not where you want to be helpful. Be honest and transparent with the founder. Also, respect the limits of your influence and rights.
A founder may ask you for help in an area you lack expertise. If this happens, just say “I don’t know.” If you can, ask “Could I call my acquaintance who is knowledgeable in this field and ask them for you?”
Being a “good investor” ≠ being an industry expert, writing massive checks, nor having your name in lights.
“Good” means many things, obviously, but it’s often mistaken to mean these three.
1) “Dumb money” and “smart money” are both… money– you don’t have to have years of industry expertise to support a company monetarily and be respectful of their time. 2) You don’t have to write big checks to be “good!” Small investors can offer critical support to founders. 3) Remember that you’ve probably never heard of some of the best investors out there! Fame doesn’t measure goodness but it can sometimes measure infamy…
Founder & Managing Partner of Angel Investors LP funds, Ron Conway
Ron & Geoff talk failure, diversification, and paying it forward.
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.
1,496 startups have raised $636,919,458 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 1296 startups
Wefunder Advisors LLC
for 308 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).