- The speaker discusses investor meetings and the importance of knowing who the investors are and what motivates them.
- They emphasize the need to have a clear goal and know how to achieve it in order to have a successful meeting.
- The speaker advises on when to raise money, suggesting that not every business needs outside financing.
- They explain that raising money should be based on the specific needs of the business, such as hiring employees, user acquisition, or customer service.
- The speaker warns against fundraising too early, as it can lead to dilution of equity.
- They discuss different types of investors, including friends and family, accelerators, angels, seed funds, VC funds, and crowdfunding.
- The speaker cautions about the proliferation of accelerators and advises caution in choosing one, as many advisors may lack experience and may not be beneficial to the company.
- They also advise being cautious when accepting money from friends and family, as most startups do not produce a return on investment.

- Be thoughtful about taking money from friends and family and avoid setting onerous terms.
- Treat friends and family investments as real meetings and be respectful of their time.
- Angels are easy to get in front of and invest mostly as a sport or to pay it forward.
- Be cautious of angel groups that grill founders without investing.
- Seed funds are professional angels who have raised outside capital and are aggressive about finding good deals.
- VC funds have multiple LPs and need a significant return on investment.
- Crowdfunding websites can be a good option for raising money, but managing individual investors can be challenging.
- Sending a good cold email requires research on the investor's interests and customizing the introduction to be relevant to them.

- The piece discusses the content of a cold email and how to make it effective in getting a response from investors.
- It emphasizes the importance of being specific and relevant in the email, rather than spamming investors.
- The author mentions different types of meetings with investors, such as intro meetings, follow-up meetings, decision meetings, and diligence meetings.
- It highlights the need to have a clear explanation of the idea, metrics, progress, and insights into the business during these meetings.
- The author also mentions the importance of projecting the future potential of the company during decision meetings.
- The piece concludes by mentioning the importance of considering the compatibility of investors and having a well-prepared pitch deck.

- The ability to explain your vision is important in distinguishing your company
- Diligence meetings are necessary and require preparation
- Have legal documents and financials in order
- Metrics dashboard is important for transparency
- The ultimate goal is to secure funding, regardless of fancy dinners or investor reputation
- Don't turn down investors who are willing to invest without meeting in person
- Meetings with investors should only be pursued when you actually need funding
- Investors who say no quickly are often the best ones
- Beware of investors who waste your time or exhibit bad behavior
- Harassment is unacceptable and should be reported
- Approach VCs who have invested in competitors on a case-by-case basis
- Average investment sizes vary greatly and depend on various factors
- Ask for references to determine the credibility of angel investors.

- When considering investors, ask for references and look at their portfolios
- Investor FOMO (fear of missing out) is driven by the desire to invest in successful companies
- Founders should avoid pitching their vision as too scattered or too small
- When pitching to family and friends, tailor the approach to the individual and treat it as a professional interaction
- Fundraising should be prioritized but not at the expense of neglecting the company's progress
- Funding specifically for women founders can be advantageous and should be pursued
- Not all founders need to be focused on fundraising, the CEO should take the lead while other co-founders continue to work on the business
- Bringing the entire team to investor meetings can put the founder at a disadvantage in negotiations, it's better to have the option to consult with co-founders before making a decision.

The text discusses the importance of investor meetings and the need to know who the investors are and what motivates them. It advises on when to raise money and warns against fundraising too early. Different types of investors are mentioned, along with tips for approaching them. The text also covers the content of a cold email, different types of investor meetings, and the importance of compatibility and preparation. It concludes by mentioning the importance of considering investor credibility and avoiding harassment. Other points include tailoring pitches to individuals, prioritizing fundraising without neglecting company progress, and the advantages of funding for women founders. It also advises caution in bringing the entire team to investor meetings.

YC Partner Aaron Harris gives invaluable advice for how to most effectively and strategically meet with investors.
Chapters (Powered by https://bit.ly/chapterme-yc) - 
00:00 - Investor Meetings
01:31 - When you need to raise money
03:20 - Why they need to raise money?
06:21 - Types of investors
07:04 - Accelerators
08:59 - Friends and Family
11:02 - Angels
13:08 - Seed funds
14:20 - VC funds
16:22 - Crowdfunding websites
17:56 - Cold emails
22:50 - Meeting types
24:54 - Intro
26:34 - Follow-up
27:51 - Decision meeting
30:02 - Diligence
30:53 - Fancy dinner
32:12 - Things to remember
34:06 - Warning
38:04 - Q&A

Learn more at https://startupschool.org

So I'm going to do more than just talk about investor meetings.

I also want to talk about who the investors are that you're going to be raising money from maybe 1 day and what motivates them.

Because in order to have a good meeting, you need to know what you're doing and how to achieve that goal.

So when we think about investor meetings, there's a question of when you need them, who you need them with, how to actually get the meetings, and actually how to do the meetings.

This might seem weird, but a meeting isn't just walking into a room and sitting across the table from someone staring into each other's eyes.

And you need to know what points to make.

And Kirsty just ran you through the mechanics of what fundraising actually means.

But in order to actually get the money from somebody, you usually have to know who they are, track them down, find them, convince them to meet with you, convince them to give you money, and then get the money in the bank.

So there's a lot of steps that come up ahead of time.

This talk is kind of your magical plan to automatically raise money.

If you follow these tips, no 1 will ever say no to you.

All right, so the first thing is figuring out when you actually need to raise money.

MailChimp, famously, has never raised a dollar in outside financing and is worth billions of dollars.

So before you think about whether or not you...

Or before you think about meeting with investors to raise money, you first need to answer the question of if you actually need to raise money.

And there's a bunch of different steps in this.

You can raise money when you're just at the idea stage.

You can raise money if you just have a prototype.

In fact, it gets easier and easier as you have each of these things, because they're demonstrations of progress.

But you need money when you actually need it to grow your business.

And figuring out whether or not you need money to grow your business is a very particular decision about your company.

So if you think about this, think about raising money as a continuum, right?

If you have nothing and no understanding of how you would spend money if you had it, don't try to raise money.

Instead, focus on building your product and building your company.

If you get a little further along, you have your idea or your prototype, you start to see, oh, if I actually had a little more money I'd be able to do X, Y, and Z, which would make me go faster.

Now flip yourself into the mind of the investor and think about, okay, well if I'm an investor, why am I giving this person money?

And the reason is because I expect it to be very, very, very large 1 day.

And I also expect them to be able to use this money appropriately.

There are some uses that are good for money and some uses that I would say are bad.

The first thing people always say about why they need to raise money is they need to hire employees.

This is very attractive because companies love to talk about how many employees they have.

It's a great metric when you don't have revenue or actual progress.

But the truth is, because you are building startups, which hopefully leverage software, you need to hire far fewer people than you think you do.

And in fact, hiring is the single best way to kill your company if you don't need to do it because people cost money.

And so if you are already hiring, you already need money whether or not your idea is any good, whether or not your idea is growing.

So think very carefully about whether or not the blocker between you and the next step of growth is actually hiring.

The next thing people love to say is, well, we need to do user acquisition.

This is usually a very bad way to grow your business, especially early.

You start spending money on Google Ads and you start looking at your user numbers and say, look, our user numbers are growing up, so we need to pour more money into it.

And what many people don't think, especially if it's their first startup, is whether or not they're acquiring people profitably, customers profitably, and whether or not they're doing that profitably on a timeline that allows them to recycle capital and keep growing.

So before you start spending money on user acquisition, it probably makes sense to start acquiring people for free.

Get users who love your product to tell their friends about how much they love the product and then you get them for free and you don't need to raise money.

Then some of you will need customer service.

If your customers are getting angry, because you're not doing enough to make them happy, you're not answering their questions, that's actually a pretty good reason to raise money.

And it's actually 1 of the first limiting factors that a lot of companies hit.

And the reason this is a good 1 is because you as founders will be able to deal with customer service for quite a long time.

And you'll only stop being able to do that when you have enough users and customers that you get overwhelmed.

And what's interesting is that if someone's using a product that is free, their expectation of customer service is much lower, which means you can handle a lot more.

And if they're paying you, your customer service level has to be higher, but you're making more money.

So you can afford to hire more people to do customer service before you actually have to look for outside capital.

Now part of the reason I'm saying and warning so actively against fundraising before you're ready is the earlier you raise money, the more dilutive that capital is.

People aren't going to give you a $3 million valuation, a $5 million valuation, a $10 million valuation, unless you have something to show them.

So every dollar raised is more of your equity in your eventual multi-billion dollar business that you're giving away.

You don't want to do that if you don't have to.

Let's talk a little bit about the types of investors in your neighborhood.

Then there are accelerators, there are angels, there are seed funds, there are VC funds, and there's crowdfunding.

There are so many different ways to raise money and so many different places from which to raise it.

But the important thing in figuring out who these investors are, how to get meetings with them, and how to convince them that they should actually give you money is understanding a little bit about them, what motivates them, and how to get in touch with them.

Accelerators are basically investors that have education programs attached to them.

We take you in for 3 months, we work with companies, We try to make them better and better and better and better and better by teaching them what we know and helping them avoid mistakes.

And then we launch them out into the world in demo day and give them a community on the other side.

Now, there are thousands of accelerators all over the world.

We see applications from all over the world.

And I think the number of accelerators is proliferating faster than the number of startups.

And this terrifies me, because most of the people who are advising companies in accelerators have no idea what they're doing.

They've never funded a startup outside of the accelerator.

You got to ask yourself, why on earth should I take advice from this person who's never done any of the things that they're telling me I should do, never gotten, never seen any of these things work.

And actually what you notice is most accelerators actually hurt companies.

So be very careful about going to an accelerator.

None of you need an accelerator to succeed as a company.

If the accelerator is helpful, that's great.

But if not, it damages your company because of the word accelerate.

If you do an accelerator, come out the other side and you're the same or worse than you were when you started, it didn't accelerate you very well, did it?

And every other investor that looks at you will look at you and think, huh, that didn't work.

What's it actually going to take to accelerate this company?

There must be something wrong with the founders.

It might have been the accelerator, right, that hurt you.

So be careful and think very carefully and look at the track record that those accelerators have.

This is probably the most common source of funding for early stage startups at the earliest, earliest stages.

Friends and family are moms, dads, rich uncles, Grammy and Pop Pop, people who have, hopefully, a little bit of extra money that they can give you because it feels good.

Let's be honest, your friends and family don't usually think you're going to build the next Google.

They love you, they remember when you were in diapers, And they're basically giving you money because you have conviction that you can do something and they want to support you and be nice.

Only take money from friends and family if you know that they can afford to lose every single dollar that they give you.

Because let's be honest, you're probably going to lose every single dollar they give you.

Most startups that raise venture capital do not produce a return.

So be very thoughtful about whether or not you take money from friends and family.

And don't make the terms really, really onerous.

Don't raise $50,000 from your grandma at a $50 million valuation.

You're probably going to get the inheritance anyway, so it just doesn't work.

But seriously, if you artificially set a very high price at this point in your life, you can probably set the price because again, they're being nice, But that makes every other fundraising you do increasingly difficult, because the price is so high.

When you do want money from a friend or a family member, treat it like a real meeting.

Go in with an actual pitch and an actual understanding of what you're doing, not just, can you please give me money now, thank you.

Really treat this as an important thing because it'll help train you for the next stage of raising money, which is usually angels.

Angels are basically rich people with a little too much time and money on their hands.

Have you ever noticed on Twitter angels will often say, my billion dollar company this, my billion dollar company that.

You have no idea how much money they invested in those companies or whether or not they actually made money, whether or not the money that they made is meaningful to them.

But they really like to invest in new companies.

It's actually not just about trophy hunting.

There's a lot of angels who invest because they really want to see new technologies exist or because when they were new founders, someone gave them a chance and they want to pay it forward.

Angels are usually pretty easy to get in front of because they...

Well, professional angels are easy to get in front of.

All they want to do is invest in exciting, new, interesting companies and spend time with founders who make them feel interested, right, and who teach them things.

And if they seem really, really busy, you can usually network to them pretty quickly, especially if they're local.

Whatever city you're in, pretty much around the world, has at least a few angels.

The 1 last thing I would say about angels is that you should be careful of angel groups.

I forget what they're called, but there are basically these groups of angels that like to get together for meals and grill new founders and then not invest.

And it's this sport of ripping people apart because they are successful investors or something, and they just want to show you how good they are.

So before you take money from, or before you go chase an angel down, Do some research ahead of time to figure out whether or not they actively invest.

Have they made an investment in the last 6 months, 12 months, 5 years, 10 years?

They haven't made an investment in a year or 2.

So it's probably not a good idea to waste your time chasing them down.

Seed funds are kind of super professional angels who have raised some amount of outside capital that they are investing.

They're usually investing on behalf of angels who maybe don't have enough money to be LPs in really big funds.

These are usually newer but professional investors who are trying to learn the ropes.

They're probably pretty aggressive about finding good deals.

They have quick processes because they know they have to move quickly.

Their whole job is to meet new founders who they want to talk to and invest in.

If you can get a warm email, great, but you should just reach out to seed funds.

Their entire job is meeting with you to see if they can invest in you.

And remember that they are investing for a return so that they can raise their next fund.

So they're not interested in things that are just going to produce a small return.

They're not interested in lifestyle businesses, which an angel might be interested in investing in if there's cash flow.

These are obviously the big deal in fundraising.

There are VC funds that invest million dollar checks and there are VC funds that invest billion dollar checks.

Know what you need for your stage of capital.

They all have, or almost all have multiple LPs, which are limited partners, who give them money and say, hey, we need you to produce X percent return on an annual basis.

And these people, these LPs, are looking across all the venture funds in the world and saying, where can I allocate money?

And then they're looking at all of the different alternative asset managers and saying, where can I allocate money?

And then they're looking across all of investable assets and saying, where can I allocate money?

And so if I'm a VC partner, if I'm a GP, I have to think not only do I have to be 1 of the better VCs, I have to return more at a better risk than anything else this investor could put money into for me to get that LP capital.

So when they're looking at you, they don't just need you to return 5 or 10x.

They're looking at every single investment and saying, will this investment return my entire fund?

So as you're thinking about how to meet with these people, right, you got to think about, oh, shoot, when I walk into that meeting, I can't just pitch a small vision of what I'm doing.

Now, VCs, when they invest, usually have a pretty specific structure of what they do and how they make decisions.

You might be with a partner at first and then 2 partners and 5 partners and then the whole general partnership if you're raising something like a series A.

But the earlier stages, most of the bigger VC funds can make a decision off a meeting with 1 single partner.

So if you're all thinking about sort of that first check, probably don't even think about these guys.

This comes later in the process when you're ready to raise a lot of money.

The last kind of investor that I can think of is crowdfunding websites.

These are a little bit of a strange thing to think about when it comes to, say, a meeting or getting in front of them because they split.

There's crowdfunding that can be done via syndicate where there's 1 person who's kind of like an angel who has a bunch of money from other people to say, hey, we're going to invest in this thing and then everyone follows them along.

They work kind of like professional investors do where you'll meet with them, talk to them, then they'll say, Hey, we're going to back you.

There's private syndicates and public syndicates.

You do not have to meet with every member of a syndicate in order to raise money on a crowdfunding site.

And there's also the option on many crowdfunding sites to simply list your company, subject to a few checks to make sure you're not committing fraud, where they'll just put you up and then people will send money your way without you ever meeting anyone.

This is a good way to raise money if you can't figure out another way to do it or there's no investors near you or you don't want to be bothered with the time.

It's usually not a good way to raise lots and lots and lots of money because 1, it's usually not there and 2, if you have all of these individual tiny little investors on your cap table, they become a nightmare to manage.

So think carefully about this option and think about what it will do for you and what it can do to you.

So a couple of these investors, as I mentioned, are susceptible or open to receiving cold emails.

Actually, everyone is receptive to cold emails.

I think I respond to pretty much every cold email I get if I can, but there's good ones and bad ones So here's a bad cold email Dear sir or madam.

I have noticed in my research on the internet that you are an investor in technology companies I'd like to introduce you to an opportunity to make money in this new and exciting field.

May I come to your office for an hour to present you with this opportunity?

Sincerely, Aaron." I would not take a meeting with this person.

They don't seem to have done any work to understand what I'm interested in, who I am, what I've done in the past, and they're asking for an hour of my time in person.

Remember that professional investors, sure, they meet with people all day long, but the only thing that limits them is their time.

And so they want to give that to the people who matter most.

So how do you think about sending a good, cold email?

Most investors are very happy to tweet about things that interest them, companies they've invested in.

They write blogs about ideas that they have and companies that they want to see exist.

They have prolific profiles online based on the companies that they've started in the past.

You should go and research every single investor that you want to talk to and figure out a way to get in front of them with a custom introduction that is relevant to them and to you.

Adora, I'm building a marketplace for home cleaners.

We've launched and are just starting to grow.

If you've done research on Adora, you know that she built a marketplace for home services.

So you know that this is relevant to her.

You also might know she thinks robots are cool.

You tell her the stage that you're at, launched and are just starting to grow.

Now launched is great because it proves that you're actually doing things.

Starting to grow is intriguing because it makes me want to ask, how much are you starting to grow?

Then, I think you'd be a great investor for us because of your experience with Homejoy.

I think we've solved unit economics and reliability.

So let's think of all the different things here that are good.

You've only asked for 15 minutes of time.

That's easy and can be done by the phone.

If Adora happens to be busy or is traveling, she can just deal with the first set of questions over email.

I always go to email first and if someone really gives good email responses and is thoughtful and asks good questions, I'm much more inclined to meet them and be happy when I'm meeting them.

Walk into the meeting with a positive understanding of what they're doing and context to understand the entire conversation.

That's a prepared mind for what you're thinking of doing.

You reference her past with home joy and you'll know if you watch some of Adora's lectures and videos online that she thinks a lot about unit economics and reliability.

So you know that these things are important.

And you're saying, we've solved these 2 key critical issues that are important to you.

This is a cold email that is likely to get a response, whether or not you know the person you're emailing, because it's so specific.

It's the same thing, by the way, if you are sending lots of email to people you don't necessarily know to try to convince them to use your service.

There's a big difference between spamming people And sending them a relevant email about a relevant service that they will find interesting.

Investors are not usually sitting around waiting for an email from someone they've never met, introducing them to an investment opportunity.

What they are waiting for is the company that no 1 else knows, that is secretly amazing, that nobody else has talked to yet, that has no connections.

That is the company that if you find it and is actually as good as it seems, that's the 1 that makes you all of the money.

So an investor who gets a cold email this good is already starting to think, oh crap, this is my Google and no 1 else knows about it.

I better move fast, meet them, figure out what's going on, give them a bunch of money, and then help them IPO.

That's the response you want to get out of someone.

In fact, that's what you want to walk out of every meeting with, an investor who's excited to move on to the next steps.

Now, as you move through meetings with investors, there are a whole bunch of different meeting types that you'll have to navigate.

And different investors do different kinds of these meetings.

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How to Get Meetings with Investors and Raise Money by Aaron Harris