Y Combinator's Michael Seibel: 5 Fundraising Tips

Michael Seibel led Y Combinator between 2016-2024 and is now a partner emeritus. He is also the co-founder of two Y Combinator startups with successful exits, Justin.tv (which became Twitch) and Socialcam. He shares his advice for startups in many podcasts and blogs, as well as on his website. Here are five quotes from Siebel's blog on raising startup capital: - The answer to "what you do" should be super simple: "Too many people spend too much energy trying to make their idea sound impressive. It’s ok to keep it simple. Actually, it’s preferable. You want to explain what you do in the simplest language possible. This needs to be predigested. Your elevator pitch should be like baby food. If you’re having trouble communicating your product simply, walking me through the user path can be an effective tactic." - High valuation does not predict your success: "...valuation is not equal to success or even probability of success. Some of Y Combinator’s very best companies raised on tiny initial valuations (Airbnb, Dropbox, Twitch, are all good examples)." - Treat your investors' money with care: "...it is vital to remember that the money you raise IS NOT your money. You have a fiduciary and ethical/moral duty to spend the money only to improve the prospects of your company." - Exceptional progress is relative to your time creating it: "[As an investor] I want to feel impressed with how much you’ve done in the period of time you’ve had to do it. This can apply to a company that’s one week old or ten years old." - Show investors your unique insight to win them over: "What’s your unique insight? This is similar to “What problem are you solving?” but the bar is higher. What I really want to understand is what you know about the problem that everyone else doesn’t. This is usually derived from multiple conversations with customers, deep analysis of current products in the space, and often personal experience."