This video from Y Combinator's Startup School, presented by Brad Flora, breaks down common myths about startup fundraising. It explains that fundraising isn't glamorous like Shark Tank but a series of one-on-one meetings, and that founders should build a product and get users before seeking investment. The talk also highlights how the 'safe' document has made early-stage fundraising faster, cheaper, and given founders more control, countering the idea that raising money means losing control or needing a fancy network.
Key Takeaways
1
Fundraising is not a glamorous event like Shark Tank, but rather a grind of many one-on-one meetings and conversations.
2
Founders should build a first version of their product and gain some users before attempting to raise money, as this gives them leverage with investors.
3
Investors are not looking to be impressed; they want to be convinced by a product that people genuinely want and a clear, simple explanation of its potential.
4
Early fundraising rounds (seed rounds) are typically smaller, faster to close, and cheaper due to standardized documents like the SAFE.
5
Using SAFE documents for early funding allows founders to retain full control of their company, as there are no board seats or immediate share transfers.
6
Bootstrapping a company indefinitely can be scary, miserable, and distracting, and it's often better to raise initial funding to accelerate progress and gain control.
7
Investors prioritize a product that people want over a founder's pedigree, network, or age.
8
Rejection from investors is a normal part of the fundraising process and does not necessarily indicate a bad startup.
9
It is always best for founders to talk directly to investors themselves rather than having someone else pitch on their behalf.
10
There has never been a better time in history to raise money for a startup, with more investors and capital available.
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foreign
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[Music]
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I'm Brad Flora I'm a group partner here
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at YC and I'm going to be talking about
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how startup fundraising works today like
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I said I'm a group partner at YC and
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what that means is that I read
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applications I interview the startups
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that apply and then I work with them to
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try to make something people want and
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one of the topics that people ask about
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all the time at YC is fundraising in
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fact it's probably the thing that we get
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asked about more often than anything
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else and the reason for that is because
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as Paul Graham wrote years ago raising
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money is the second hardest part of
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starting a startup after making
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something people want so let's take a
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quick tour of all the awesome stuff that
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YC's put out about fundraising over the
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years first there's the Paul Graham
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essays he wrote the fundraising Survival
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Guide how to fund a startup how to
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convince investors to invest in your
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company and even wrote a great essay
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about understanding investor herd
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Dynamics all of the stuff's online you
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can see the links below you should check
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it out years later just a little bit ago
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YC president Jeff Ralston posted a
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terrific guide to raising a seed round
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where he covers everything from start to
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finish that you need to know the Nitty
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Gritty on how to raise a seed round and
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he gave a great video presentation at
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startup School a few years ago where he
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presented that material it's on YouTube
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you should check it out it'll tell you
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how to raise a seed round finally we've
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posted a lot of tactical guides about
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specific aspects of fundraising how to
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build a seed deck how to pitch your
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startup how to get meetings with
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investors and how to raise money online
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for startups using platforms like Angel
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list we've even got something about the
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different types of investors and their
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incentives so if you really want to get
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specific and drill into stuff there's
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content for you that you can find what I
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didn't want to do today is just rehash
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all of that stuff because it's already
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out there what I wanted to do instead is
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talk about some of the misconceptions
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and myths that we see as YC Partners
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when we work with Founders Founders out
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there are consuming all sorts of
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information in the media and a lot of it
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is about startup fundraising and there's
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some things in there that just are not
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true that we're going to talk about the
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goal of this talk is to catch you up on
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how fundraising actually works today and
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we're going to do that by exploring
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seven fundraising myths and for each one
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of them we're going to talk about the
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myth the reality behind the myth and
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then look at some great YC companies
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that bust that myth before we get
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started just a little bit more about me
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I'm a YC partner but I've also been on
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both sides of the table as a founder and
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an investor from 2008 to 2014 I was
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building startups and the company that I
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got the most success was perfect
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audience which was an ad retargeting
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startup for small businesses I took
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perfect audience through the YC summer
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11 batch 11 years ago and we raised a
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million dollar seed round after demo day
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I hired a bunch of great people we grew
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to three million dollars in revenue and
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we were acquired in 2014. after that
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acquisition I got really into investing
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in startups it started with Angel
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Investing where I was writing just a few
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checks five thousand dollars ten
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thousand dollars into YC companies that
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I thought sounded really cool at demo
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day but I got hooked the thrill of going
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and meeting Founders finding out what
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their deal is trying to figure out are
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they making something people want should
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I invest was too much for me and
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suddenly I was raising a fund with some
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friends to scale up and invest in even
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more YC companies and so through that
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fund I invested in 150 YC companies and
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the good news for my backers is that we
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got into some great companies you may
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have heard of a few of them deal open C
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retool razor pay it was really awesome
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to help those companies raise their
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first round funding and it's been a lot
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of fun being involved since eventually
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though I joined YC as a group partner
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and I get to do both sides I get act as
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a Founder as a fellow peer to the YC
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Founders and help them figure out how to
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make something people want and then use
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my investor experience to help them
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figure out how to raise money so I've
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got a good view of this I've been
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involved in a lot of seed fundraising so
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let's get started with these myths and
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for the first one I want to talk about
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is this idea that raising money is
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glamorous what's the image in your head
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that you think of when you think of
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startup fundraising for a lot of you it
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might be something like this this is an
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image of Shark Tank and it's a
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television show where entrepreneurs they
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dress up they make a sign they get a
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bunch of materials and they pitch a
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bunch of investors at once called sharks
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and these are a bunch of people of
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varying levels of investor expertise who
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hear the pitch ask a bunch of uh nosy
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kind of pushy questions and then fire
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offers that the founder rapid fire and
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so if you watch this you may be thinking
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gosh I've gotta put a whole presentation
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together like this and I'm gonna pitch a
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bunch of people and they're going to ask
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me all these tough questions and it's
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going to be this high pressure situation
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nation that I've got to figure out the
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reality is that fundraising actually
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looks like this this is a picture taken
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in the creamery which is a now departed
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Cafe in San Francisco notice what's
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happening here it's just a bunch of
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people sitting in chairs talking quietly
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amongst themselves right it's just a
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bunch of coffee chats that's how
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fundraising actually looks that's what
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it actually feels like is just sitting
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in a cafe talking to someone Shark Tank
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the pitch competitions the business plan
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competitions they're just for show
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they're marketing events for the
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organizations that put them on and in
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fact a lot of the investors at these
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things they don't invest they're just
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there to meet other investors and hang
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out and even on Shark Tank I think Mark
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Cuban recently said that even though
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he's put 20 million dollars into these
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companies he hasn't made a dime yet he's
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still in the red actual fundraising is
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just a bunch of one-on-one meetings on
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Zoom over and over again while you try
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to collect checks and convince investors
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It's a Grind okay what you see here is a
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diagram that was made by an actual YC
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company called fresh paint that shows
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what an actual round of fundraising
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looked like for their startup you see at
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the top the company in each one of these
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circles and squares represents a
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different investor that they met with
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and when the boxes are connected it's
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because that investor made an
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introduction for them they met with 160
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investors and 39 of them said yes which
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is a very high conversion rate but the
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check range was all over the place they
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had people write 5K checks and people
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write 200k checks all right not
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everybody with some fancy VC they could
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write a giant check and it took them
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four months and 18 days to get through
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all these meetings and close all these
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deals and that was to raise 1.6 million
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dollars fundraising was painful and it
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was a grind but it was pretty
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straightforward it was just a bunch of
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conversations they've written a great
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blog post that's where this image comes
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from that you can check out should
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definitely read it so great example of
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what it's actually like to raise money
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okay the next myth I want to talk about
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is this idea that I need to raise money
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before I can start working on my startup
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all right we see this a lot with
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Founders we meet people that have a big
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idea which is great and the next thought
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they have is well gosh I guess I need to
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raise money so I can build my big idea
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but that's not how the best Founders
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actually think about fundraising the
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best Founders they build the first
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version of the product first even if
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it's a simple almost toy-like version of
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it and then they go get some users for
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it and then only then when they see that
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people are starting to use it and maybe
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there's some value being created do they
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start thinking about raising money and
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the reason for this is that it's cheaper
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than ever to build a prototype of a
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product to build a first version okay
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it's cheaper than ever to host a website
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and and build software it gets easier
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and easier and easier every year and
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also it's easier than ever to find
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potential users you can get users on
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platforms like product hunt on Hacker
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News you can find users on social media
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Twitter LinkedIn everybody's on the
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internet today and you can use that to
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find early people to try out your
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product and when you do this when you've
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got a little bit of product just a
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little bit and a few users for it it
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immediately gives you a great deal of
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Leverage all right you've gone from that
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person waving the pitch deck around
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trying to figure out how to find 20
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million dollars to someone whose startup
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is in motion and investors want to jump
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on trains that are in motion here's an
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example solugen is a YC company from the
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winter 17 batch and they are a chemical
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manufacturing startup they literally
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make chemicals and sell them as you can
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imagine that is a capital intensive
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business it requires a lot of money to
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build a facility that can make chemicals
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and sell them at scale and a certain
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type of founder that had this idea would
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then make a pitch deck and go around
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telling investors I need 10 million
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dollars I need 20 million dollars to
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build the menu manufacturing plant to
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make these chemicals the solution folks
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chose a different path which is first
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they built a tiny version of their
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reactor that fit on a desk but it worked
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next they built a slightly larger
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version of that that could actually make
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enough hydrogen peroxide to sell and
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they took that to YC when they applied
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for the winter 17 batch and during the
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batch they started making enough
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hydrogen peroxide using this slightly
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larger version of the machine that they
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could go and sell it to First customers
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turned out that hot tub supply stores
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needed hydrogen peroxide to sell the
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people that add hot tubs and so they
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were making ten thousand dollars a month
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selling hydrogen peroxide to hot tub
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supply stores not a ton of money but
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let's step back for a second if you were
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an investor and you were trying to
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invest in a chemical Manufacturing
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Company who would you back the person
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with the pitch deck asking for 20
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million dollars or the people that have
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built a first version of this even if
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it's small and making small amounts of
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the product and selling it to hot tub
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supply stores which is hardly a huge
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business but it's something
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well investors clearly want the second
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Solid Gym is able to raise four million
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dollars for to get started on their
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company because they'd already made some
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progress and today they've since raised
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400 million dollars and they've scaled
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this up to having a full manufacturing
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plant let's talk about our next myth
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this idea that my startup needs to be
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impressive to raise money I've got to
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impress people with my startup but my
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startups startup is not very impressive
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so how can I ever do this well the
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reality is you don't need to impress
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investors you need to convince them and
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that's a slightly different thing see
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most startups seem terrible at first and
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in fact the best startups seem the most
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terrible at first so let's take Airbnb
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what was it it was a Marketplace for
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renting an air mattress on someone's
10:42
floor
10:43
terrible idea doordash
10:46
food delivery for the suburbs where it
10:48
takes longer to get everywhere and no
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one's ever started a delivery company
10:52
before
10:53
terrible idea open c a Marketplace for
10:56
selling Collectibles that only exist on
10:59
your computer and can only be paid for
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with magical internet money what but
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investors get this they know that your
11:07
startup is going to sound unimpressive
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early on investors are pretty smart they
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get it and in fact they get bored when
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founders try to impress them okay really
11:15
try to win them over and sell to them it
11:17
bores them about 11 years ago and I did
11:19
YC I had a chance to have a five minute
11:21
meeting with Michael Moritz who at the
11:23
time and it was a partner at Sequoia
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capital is legendary VC and I was so
11:29
excited for this meeting I made a fancy
11:31
deck I practiced all these lines I was
11:33
going to use on him to impress him and
11:36
conv and get him to invest in my startup
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and I sat down with him and I opened my
11:40
laptop to get the slides out and he
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stopped me and just said I prefer to
11:44
just talk about the business you're
11:45
building and I was completely disarmed
11:48
because I wasn't ready for that I was
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ready to impress him not to try to just
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talk about the business that I was
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building and we see this similar
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thinking with a lot of Founders at YC
11:57
where they come to us they don't
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explicitly ask us this but they more or
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less say Brad what are the magic words I
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need to say to make investors want to
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invest in my startup and the reality is
12:08
that it's not about magic words it's
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about making something people want right
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that YC Credo
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it's about making a product getting it
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into users hands and creating some value
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for them and then just explaining how
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there's a one percent chance even just a
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one percent chance that it can get huge
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and using plain simple language to do it
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that's how you convince investors okay
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if investors aren't investing it's not
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because you didn't say the magic words
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it's because your startup isn't good
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enough and you need to make your startup
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better and so have these conversate you
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make your startup better and you just
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explain it to people and talk about it
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like a human and do it over and over and
12:46
over again because again startup
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fundraising is a grind here's an example
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of a company that did a great job
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convincing investors when they met with
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them this is retool and retool makes
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software for building internal tools
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it's a great company they raise their
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seed round you see the founder David and
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one of the CEO and co-founder by just
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meeting a bunch of investors in coffee
13:05
shops in San Francisco I was lucky
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enough to meet with David and he had no
13:09
DAC instead he just opened his laptop
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and showed me the software on his
13:13
computer and he used that early kind of
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crude version of retool to make a crude
13:19
but simple internal tool a little web
13:21
app in minutes
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and then he talked about why his early
13:25
customers really liked it and we're
13:27
getting some value from it and just
13:28
seeing this seeing him show me the
13:30
product and talk about what his
13:32
customers were making of it put in my
13:34
head this idea that a lot of companies
13:36
probably are going to need this I was
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convinced he didn't impress me he didn't
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try to wow me he just showed me and
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talked in a reasonable way about what he
13:44
was doing and that convinced me I wrote
13:46
a check and today that company is at a
13:48
four billion dollar valuation wasn't
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about doing a fancy pitch but it wasn't
13:52
about magic words it was just about
13:54
making something and then talking about
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it with me the next myth I want to talk
13:58
about is that raising money is
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complicated slow and expensive if you
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read a lot about fundraising in the
14:04
Press
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you might think that it involves raising
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giant rounds from big name VCS why is
14:12
that well let's take a look at
14:14
yesterday's TechCrunch headlines about
14:15
fundraising we've got a story about
14:17
Shopify Mark Vision locket Sprague what
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do we see folks what's the common uh
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denominator here gigantic numbers and so
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you're reading this at home and you're
14:28
just trying to think how can I raise
14:30
twenty five thousand dollars to quit my
14:32
job or spend more time on this or get a
14:35
Hosting account for the website that I
14:37
want to build you're not thinking about
14:38
a hundred million dollars gosh maybe
14:40
this isn't for you well the reality is
14:42
is that all the rounds you read about in
14:44
the news are series A's and growth
14:45
rounds you don't read much about the
14:47
actual you don't read anything about the
14:49
actual first rounds of funding that
14:50
companies raise why because it's boring
14:53
okay it's really boring we already
14:55
established that there's no glamor in
14:57
the actual early fundraising that
14:59
startups do so it never makes the press
15:00
these typical A and B rounds are huge
15:03
right you raise 10 to 50 million dollars
15:05
they take months to close and you pay
15:07
hundreds of thousands of dollars to
15:09
lawyers and legal fees to get these
15:10
rounds done the good news is like I said
15:12
that's not what a lot of these rounds
15:13
look like your typical seed round is
15:16
actually much smaller 500 000 maybe a
15:19
couple million dollars you can close it
15:21
in weeks if not days and there's no
15:23
legal fees and this is the same for if
15:26
you're trying to raise a precede or just
15:27
trying to raise fifty thousand dollars
15:29
from friends and family you can do that
15:31
quickly and there's no need to get
15:32
lawyers involved why is that well in
15:36
2013 YC created a new standard
15:38
fundraising document
15:41
called the safe the simple agreement for
15:44
Equity so initially this was made by YC
15:47
to be the new standard document that all
15:50
YC companies would use and it turned out
15:52
for fundraising and it turned out to be
15:54
so great that now every startup uses
15:57
this to raise their money the safes are
15:59
awesome first off it's easy to
16:01
understand it's only five pages long
16:04
uh it's really fast to close an
16:06
investment using a safe there's only a
16:07
couple terms to discuss the amount of
16:09
the investment the valuation cap of the
16:11
investment and then the discount and
16:13
guess what nobody does discounts so
16:15
there's only two terms that you really
16:17
need to discuss when closing a safe and
16:19
finally they're cheap you don't need
16:21
lawyers to send them also the safe is
16:24
just on the YC website if you Google why
16:26
combinator safe you can find the
16:27
document download it to your computer
16:29
and use it this afternoon to close an
16:32
investment in your startup how cool is
16:33
that safes are so simple that there's
16:35
even a website called clerky it's a YC
16:38
company from my batch summer 11 that
16:40
lets you send and sign them in just a
16:42
few clicks safes give Founders
16:44
fundraising superpowers and you don't
16:47
have to wait months for investors to get
16:49
organized and for lawyers to review
16:51
stuff founders today just take all the
16:54
meetings they sign a bunch of safe and
16:56
they raise Millions for their startup in
16:58
just a few clicks and this quick and
17:00
cheap fundraising gives them more
17:02
leverage than ever
17:03
when they're talking to investors here's
17:05
an example you could build your company
17:07
like Azure bio so this is a biotech
17:10
startup from the summer 19 match that's
17:12
developing cancer therapies again
17:14
Capital intensive business and the
17:16
typical first rounds of funding are tens
17:18
of millions of dollars for companies
17:20
like this and so Founders go they make a
17:22
pitch deck and they've got to go get
17:24
this money before they can start working
17:25
on the on the startup the founders of
17:27
Astra came into YC with just the idea
17:29
and they were able to raise the first
17:31
round of funding using safes quickly
17:33
from Angels this is pretty novel for a
17:36
biotech company and using that first
17:38
million or so that they raised they
17:40
could accelerate their progress they
17:42
could make more progress in the lab and
17:44
when they were ready to start talking to
17:45
larger investors in the Pharma space
17:47
about a proper round they've made a lot
17:50
more progress and they had more leverage
17:52
in talking to those investors they've
17:54
since raised over 150 million dollars
17:56
but that first million that they raised
17:58
in safes totally changed the power
18:00
dynamics for them when talking to
18:02
investors the safety change the game for
18:04
them related
18:06
myth is this idea and I hear this a lot
18:09
hey if I raise money I'm going to lose
18:11
control of my company
18:13
well the reality is that seed rounds
18:15
today give Founders more control than
18:18
ever okay Founders have had more can
18:21
have more control over their companies
18:23
today than ever in the history of
18:25
startups and why is this it's because
18:27
when you raise the safes you don't give
18:29
up any board seats all right there's
18:31
there's no board seat nonsense in safes
18:33
after you close the investment it's
18:34
still just you and your co-founders
18:36
calling the shots there's no
18:37
shareholders after you close money with
18:39
safes the investors on safes gets shares
18:42
in the next round okay so no Shares are
18:45
actually changing hands and there's no
18:47
information rights granted in safes so
18:50
there's nobody like requesting to look
18:51
into your books looking over your
18:53
shoulder you get to choose how and when
18:55
to update your investors when you raise
18:57
money with safes so again Founders
18:59
raising millions of dollars they're only
19:00
selling 10 to 20 percent of their
19:02
company and they're keeping total
19:04
control of the companies and when you do
19:07
that you can build the company the way
19:08
you want and Answer to No One except
19:11
your customers well pretty important but
19:13
instead of answering new investors you
19:15
answer to your customers when you raise
19:17
seed rounds today here's a great example
19:18
you could build your startup by zapier
19:20
they describe themselves as three dudes
19:22
from Missouri and zapier is software
19:24
that help you set up Integrations if
19:27
you've got one app that you use in
19:29
another app and you want them to talk to
19:30
each other you can use zapier to set
19:32
that up it's awesome they did the YC
19:34
summer 12 batch and they applied with an
19:36
early version of their software they had
19:37
a few customers and they raised over a
19:39
million dollars from angels and small
19:41
funds at demo day and because they did
19:43
that because they raised on safes and
19:45
they just raised a bunch of checks they
19:47
were able to run their company the way
19:48
they wanted and for them 10 years ago
19:51
that meant going fully remote 10 years
19:53
ago a decade before it was cool for
19:55
startups to do that it was pretty weird
19:57
at the time and they ran their company
19:59
the way they wanted to they spent the
20:00
next decade just delighting thousands
20:02
and thousands of customers and they also
20:05
made the decision to never raise money
20:06
again they never needed to so folks
20:09
thinking gosh if I raise money I'm
20:10
always going to be indebted to investors
20:12
yada yada no maybe later if you raise
20:15
these crazy priced rounds but for the
20:17
early money that you raised on safes you
20:20
have total control and you can be like
20:21
the zap your Founders and never raise
20:23
money again and today that's 100 million
20:26
dollar Revenue business and they only
20:28
raised money that one time now what
20:30
about bootstrapping you might be
20:32
thinking I should bootstrap my company
20:33
well everybody bootstraps it first
20:35
that's true but I want to tell you that
20:37
bootstrapping your company forever sucks
20:40
and here's why so first off when you
20:42
bootstrap forever and what I mean by
20:43
bootstrapping I mean
20:45
um funding the company out of the
20:47
revenue that you make from customers
20:48
it's scary all right you're always about
20:51
to shut down you're always about to run
20:53
out of money it's miserable because you
20:55
don't have any money to pay yourselves a
20:56
decent salary to live on it's
20:58
distracting you have to go into
21:00
Consulting in order to make the money
21:03
you need to keep working on your
21:04
products sometimes you have all these
21:05
detours when you're bootstrapping and
21:08
then finally the odds just aren't great
21:09
there are very few examples of 100
21:11
gigantic bootstrapped companies and I
21:14
think if it was the way to go there'd be
21:16
a lot more of those I actually want to
21:18
propose the definition of bootstrapping
21:20
so bootstrapping is taking the pain of
21:23
fundraising and stretching it out across
21:25
the entire life of your company why
21:28
would you want to do that I propose to
21:30
you that you should rip off the Band-Aid
21:32
and take the pain up front
21:34
and raise money for your company and
21:37
then you never have to raise money again
21:39
if you don't want to you can be like the
21:41
zap your Founders and besides at the end
21:43
of the day who's more in control of
21:44
their startup in the end is it the
21:46
bootstrapped founder who's always
21:48
worried about running out of money or
21:51
the founders that raise enough money to
21:52
get the company going after they've
21:54
built a product and gotten some users
21:55
and they can just make their customers
21:57
happy and they never have to raise again
21:59
the next myth I want to talk about is
22:01
this idea that I need a fancy Network to
22:03
raise money the reality is that if you
22:05
are making something people want
22:06
investors don't care about where you
22:08
went to school where you worked who
22:10
you're friends with how old you are even
22:12
investors are human and sure they notice
22:14
pedigree but guess what folks investors
22:18
are coin operated lizard people and they
22:21
care a lot more about making money you
22:24
can build your company like Podium
22:26
Podium is a company that started off
22:28
making customer review management
22:31
software for tire shops all right if
22:34
you're a tire shop and you're worried
22:35
about what people are saying about you
22:37
on Yelp you might use Podium to keep
22:39
track of that the co-founders were two
22:40
guys from Utah they had no Silicon
22:42
Valley Network however they were really
22:45
good at sales and they came into YC they
22:48
were already making money and by the end
22:49
of the batch they were making tens of
22:51
thousands of dollars a month I actually
22:53
randomly bumped into them at an alumni
22:55
event during their batch and I was
22:57
stunned that there was a company selling
22:59
software to tire shops in y combinator
23:01
and even more stunned when I found out
23:03
how much money they were making
23:04
investors noticed that too that they'd
23:06
made something people want and they were
23:07
able to raise and now today that company
23:10
makes a hundred million dollars a year
23:11
and has raised more than 200 million
23:13
dollars these folks had no network these
23:15
are not fancy Founders they just made
23:17
something people want slight tangent
23:19
while we're on this topic
23:21
you'll probably run into people if
23:23
you're thinking about fundraising who
23:24
are going to offer to raise money for
23:26
you
23:26
I have the network I know investors let
23:29
me go in there and Pitch your company it
23:31
is not a good idea it's always best for
23:33
the founders to talk to investors
23:35
themselves it's an important
23:36
relationship and you want to own it so
23:38
if someone makes you that offer you
23:39
should get them to make an introduction
23:41
instead and then you can go take the
23:43
meeting all right the last myth I'm
23:45
going to talk about today is the myth
23:46
that if investors reject my startup that
23:49
means it's a bad startup the reality is
23:51
that no matter how great your product is
23:53
how much traction you have investors are
23:55
going to reject you and that's okay in
23:59
fact it puts you in great company right
24:00
here's a great example Envision so
24:03
Envision is a medical device startup for
24:05
cancer detection and it was started by
24:07
serbisarna who's a YC group partner
24:09
today when Serbia started building
24:11
Envision she had a devil of a Time
24:14
raising her first check she was rejected
24:16
more than 50 times by investors to just
24:19
get the first money for the company and
24:20
the way that she was able to convince
24:22
someone to write that first check and to
24:25
help her get this company started was
24:26
she she told them she was going to bet
24:28
on herself and take no salary for the
24:30
first two years if the investor was
24:32
willing to bet on them and that was for
24:34
a 25 000 check her first round of
24:37
funding for the company was only five
24:39
hundred thousand dollars but she got it
24:40
done and she got even though she got
24:42
rejected over and over again and since
24:44
then the company was acquired for 275
24:47
million dollars so here's this awesome
24:49
medical device company that sold for
24:51
hundreds of millions of dollars and yet
24:54
rejection after rejection after
24:55
rejection if you want to read more about
24:57
serbi's story she actually has an
24:59
awesome book coming out in the spring
25:00
and it's on Amazon right now and we'll
25:03
share the link with you in the chat if
25:04
you want to check it out and pre-order
25:06
it Serbia is awesome it's a privilege to
25:08
get to work with her and the book is
25:09
terrific one other example of this is
25:12
what not it's a Marketplace for
25:14
Collectibles they were in the winter 20
25:16
batch and they came in with a beta
25:18
product but no users they hadn't
25:20
launched yet and during the batch they
25:22
got started and it was just initially a
25:24
Marketplace for selling funko pop toys
25:27
toys with the big heads during the batch
25:29
they got some early traction they
25:31
started making some money they got in
25:33
some buyers they got in some sellers
25:34
Revenue was going up sales were going up
25:37
things were looking good right but
25:38
investors hated it and they only raised
25:42
a fraction of the amount of money that
25:44
they were hoping to raise for their seed
25:46
round and the amazing thing is is that
25:48
today what not just two and a half years
25:50
later is worth 3.7 billion dollars and
25:54
they've raised over 400 million dollars
25:56
and just two and a half years ago they
25:58
couldn't pay people to invest in their
26:00
company at a fraction of that valuation
26:03
everyone gets rejected it's just part of
26:05
it even if you're building a four
26:06
billion dollar company people are
26:08
getting rejected and the thing is the
26:10
founders were not really that bummed out
26:12
about it because they had already done
26:13
that work of convincing themselves that
26:15
what they were building was working and
26:17
was going to work investors just weren't
26:19
seeing it yet some did enough did but
26:22
they still faced a ton of rejection you
26:24
don't need every investor to like what
26:26
you're building you just need a few of
26:28
them to believe and the good news is
26:30
that today there's more investors than
26:32
ever with more money than ever looking
26:34
to invest in startups all right let's
26:37
step back for a second and wrap this up
26:39
there's a common theme to these myths
26:41
that we talked about the idea that
26:43
organizes all of these is the big myth
26:45
which is this
26:47
this isn't for you these ideas that are
26:49
out there these misconceptions the
26:51
founders have they add up to people
26:52
thinking gosh maybe this isn't for me
26:54
maybe I shouldn't start my startup
26:57
because I don't know how to do this
26:58
stuff I don't have a fancy Network I I
27:01
don't know all these people I don't know
27:02
how to pitch I don't know how to impress
27:03
people but the reality is you can do
27:05
this fundraising is just a bunch of
27:08
coffee chats and zoom calls you
27:11
you don't need to raise money to get
27:12
started you can just start working on
27:13
your startup you don't need permission
27:14
from investors you don't need an
27:17
intricate pitch you just need to make
27:19
something people want and be able to
27:20
talk about it like a normal human you do
27:22
that every day with your friends and
27:23
family using safes it's easier than ever
27:26
for you to go raise the money that you
27:28
need without lawyers and quickly and the
27:30
terms you're going to get today mean
27:31
that you can run your company exactly
27:33
how you want there's not some secret
27:35
special way that you have to run your
27:37
startup you can call the shots you don't
27:39
need a big Network and fancy connections
27:41
to raise money and finally the rejection
27:44
that you're going to experience doesn't
27:45
mean anything it's just part of the
27:48
process it turns out there's never been
27:50
a better time in the history of the
27:51
world to raise money than now so if
27:54
you're thinking of doing a startup
27:56
get building you can do this you can do
27:58
all of this you can do this
28:02
[Music]
28:10
[Music]
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