How Startup Fundraising Works | Startup School

YC Group Partner Brad Flora has seen startup fundraising from every angle: as a founder, as one of the most prolific angel investors in Silicon Valley, and now as a YC Group Partner. Brad has coached hundreds of companies on fundraising. In this talk, he shares stories and advice on how modern startup fundraising works.

Paul Graham Fundraising Essays:

Geoff Ralston's Fundraising Guides:

YC Fundraising Resources:

00:00 - Intro
00:27 - Fundraising resources
02:13 - 7 fundraising myths
04:06 - Raising money is glamorous
06:51 - The need to raise money before starting a startup
10:10 - My startup need to be impressive to raise money
13:56 - Raising money is complicated, slow, and expensive.
18:04 - I am going to lose control of my company
21:58 - I need a fancy network to raise money
23:43 - If investors reject my startup its a bad startup
26:35 - Wrap up - This isn't for you

[ycombinator]

For detailed advice on how to actually get in touch with investors and set up meetings, check out this video:

[wumbo]

I'm currently 23, live in Southeast Asia, not from a rich family, and I just started out my career. Never in my life before thinking about building a startup. But in the past few weeks, I have watched several YC videos and get inspired to build my own startup! Sure I still have a lot of work to do, but learning from all of these great videos, I get assured that it's not impossible. Thank you YC for the great inspirations.

[leonidkhoroshko]

This is some kind of different reality which i guess works in US only. I think i`ve spoken to 100+ investors, spending 1.5-2 years and raising 0 before i realized that all those investors are not interested in you or your team or your product. All they ask is what is your revenue and growth rate. Thats it. At first they will say "oh you are too early for us, but please let us know when you will reach X MRR" then "or you are too late for us, there is too much competition". Even though in your pitch deck it is clearly explained why you are different. Long story short, after we stopped chasing investors and focused on business, we managed to make it work organically without investors. Now we have entities in US, Europe, Asia and continue to grow.

[betterceo-app]

I'm building an assistive technology company and had an investor tell me during a meeting HE asked for, "This is a great idea. Someone can do this, but I don't think it's you." So I stopped fundraising, dialed back my vision to the first, smallest, most accessible piece and it's working!

While almost everyone around me is trying to stop me, it's great to have videos like this that prove what I'm doing is exactly how founders win. Thanks!

[pulsenewsarena]

"Coin-operated lizard people" ... I will forever remember this when approaching investors. Lol. And Thank You!

[allthingsgenai]

Thank you. This is a fresh breath amidst all the negativity.

Why don’t we have a world where builders get more air to experiment and find something people want. I have spent countless hours on my own to come to that stage. Now I have a business which is generating revenues.

Still fighting and will keep fighting.

[livlabsfitness]

Recommended viewing! Brad has a knack for simplification. This video is worth the time of every founder just starting (or struggling through) the early fundraising journey.

[chapterme]

Chapters (Powered by ChapterMe) -
00:00 - Intro
00:27 - Fundraising resources
00:50 - Paul Graham Essays
01:27 - Tactical guides
02:13 - 7 fundraising myths
02:28 - About
04:06 - Raising money is glamorous
06:51 - The need to raise money before starting a startup
08:19 - Example - Solugen
10:10 - My startup need to be impressive to raise money
12:49 - Example - Retool
13:56 - Raising money is complicated, slow, and expensive.
15:33 - SAFE - Simple agreement for equity
17:05 - Example - Asher Bio
18:04 - I am going to lose control of my company
19:17 - Example - Zapier
20:29 - Bootstrapping forever sucks
21:58 - I need a fancy network to raise money
23:18 - Best for Founder to talk to investors
23:43 - If investors reject my startup its a bad startup
24:00 - Example - nVision
25:09 - WhatNot
26:35 - Wrap up - This isn't for you

[shimacharles]

Thank you, Brad. I learn a lot each time I watch a Y Combinator video. The journey is not for the faint of hearts.

[machapuis]

His last phrase: "You can do this. You can do this." 😢❤

[chunyuou]

The last bit is the biggest challenge for me, “you can do this”, thank you Brad.

[RuRichelieu]

Proudly bootstrapping but love the content!

[aldousbendana]

I'm 1 year into my business of agricultural products trading and talking to different investors and pitching for additional capital. I'm really glad I was able to stumble upon YC videos. My goal is to build my own feedmill to supply premium quality feeds at a reasonable cost for Filipino livestock and poultry farmers! I'm now planning to apply for YC's funding.

Love from the Philippines, YC!

[foundergen]

I really thank you for this video. I always wanted to know that. And you took away my fears because now I understand that everything is so simple. You always imagine everything to be so difficult when you read about start-ups in the media. Thank you very much

[TheAccountabilityKing]

This was just the video i needed for my confidence to manifest my start up. Thank You for this!!

[lbguihe]

By YouSum

00:05:01 Raising money is not glamorous; it's about quiet conversations.
00:07:01 Start working on your startup before raising money.
00:10:12 Investors are convinced by progress, not impressive pitches.
00:14:02 Fundraising can be quick, simple, and inexpensive with safes.
00:17:28 Implementing safes can change power dynamics when talking to investors.
00:18:06 Seed rounds today offer founders more control than ever before.
00:20:30 Bootstrapping a company forever is challenging and not recommended.
00:22:00 Investors prioritize profitable ideas over fancy networks when investing.
00:23:46 Rejection from investors doesn't signify a bad startup idea.

By YouSum

[_orangutan]

I'm currently building my MVP. I'm more on the technical side of things so these videos are absolutely informative. I'm still going through a couple of books as well, just to name a few.:

- The Startup Owner's Manual
- The Lean Product Playbook
- The Lean Startup
- The Founders Dilemma

Keep up the great educative videos.

[lesptitsoiseaux]

Brad, I'm 47, a senior technical product manager who coded before. I'm building an app that solves the problem of trust between people. Your video was a soothing balm to my heart :) Being very conscientious in everything I do I tend to over engineer and worry too much. Very thankful for your video. Cheers from Vancouver! :)

[cheeseshaper]

Simply an amazing video. I learned so much from it that I had no idea about. So many misconceptions addressed and debunked. Thank you!

[godwinchukzy]

I'm about to start up my business!Thank you so much yc for all this videos, actually fund raising is very hard.