- Get intros to investors you want to talk to and reach out to them, in parallel.
- Explain to them why your company is likely to make them a lot of money.
- Set up a competitive environment.
A two-by-two matrix of progress in innovation (and ease of attracting investment) with software/physical on one axis and short-term/long-term on the other axis looks like this. Green is good, yellow is ok, and red is bad.
Sam Altman in What happened to innovation?
On the positive side, founders may end up with less total dilution and get to choose whatever advisors they want. On the negative side, advisors probably won’t work quite as hard for a company that they don’t have a lot of capital invested in.
SAM ALTMAN IN The separation of advice and money
When I invest (outside of YC) I make offers with the following term sheet. I’ve tried to make the terms reflect what I wanted when I was a founder. A few people have asked me if I’d share it, so here it is.
SAM ALTMAN in A founder-friendly term sheet
I think the rising popularity of party rounds is bad for companies. Having at least one investor very focused on your company is valuable. A closely involved investor will help coordinate your next round…