Comment by apapli | Hacker News Reader

Comment by apapli | Hacker News Reader

I know this is probably covered in day-to-day conversations with founders at YC, and this email is about raising funds... but, I'm astounded there is not a single word in here about building a business to be profitable, or to "polish up the business plan" ready for investors to review.

Or put another way - with all the issues documented (and probably over-blown) in the media regarding the current fund raising climate, is it truly good advice to just give a suggestion to "3) You should raise enough money to get to your next significant milestone.".

Surely developing the business case and reaching profitability should rate a mention somewhere when it comes to giving out fund raising advice, particularly when this is being released publicly for budding entrepreneurs not part of YC? And even more importantly because investors will be motivated to use this current climate as an excuse to negotiate harder than usual and get more stock for less money?

From the inside, there is far more talk at YC about building a good business and getting profitable than about raising money. PG has advocated this for a long time[1], and YC continues to encourage this.

The YC way is "Make something people want." Fundraising is a distraction that is occasionally necessary.

[1] http://www.paulgraham.com/ramenprofitable.html

I think it's a combination of:

- common sense (you should have a business plan)

and

- avoiding premature optimization

If you can build an unprofitable business that is growing like crazy and has a clear path to profitability (i.e. the fundamentals of the business are not based on unscalable factors), it shouldn't matter so much how close you are to profitability.

YC is still YC. Investor's come to YC to win, and win big. They want to see companies shooting for the moon, not worried about profitability 12 weeks in.

Can't you do both?

12 weeks in validates a market.. and proves you're easily displaced

May not matter if there's cash to make off with. Plenty of folks don't care about long-haul world domination or owning a market; if being a Significant Player for 3 years will earn them enough to retire, why not?

That's fine for you and many others. However, it's an anti-pitch for a YC company: demo day is really auction day. They're selling a chunk of themselves to an institutional investor sifting for disproportionate returns.

Yeah but it hardly ever happens does it; I'd love to get 12 solid weeks to show what I can do but I'm stuck trying to build and launch something quite complex in my spare time, it's really difficult so we've taken ourselves to Lanzarote for a full week developing, which we are half way through. You quickly realise that a few issues and a few nights out and your week is over :-/

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