Comment by callmeed | Hacker News Reader

Comment by callmeed | Hacker News Reader

IMO You need to look into both options until you get at least (a) a letter of intent for acquisition or (b) a term sheet from a VC. If you can, get both, then consider taking the VC money if you can get a significantly higher valuation and good terms.

I recall a VC interview recently where he said (paraphrasing) not accepting cold emails and requiring an introduction is a filter that proves you know how to hustle and make some connections. That's a skill you're going to need anyway.

If you're willing to do that, start working your network of former classmates, co-workers, bosses, friends, etc. Don't be afraid to make phone calls, ask for favors, etc. If you are in the US, attended a university, and worked in tech there's really no excuse for not being able to get some warm intros to investors.

On the acquisition side, definitely pursue that but don't be mistaken thinking "interest" == "sure thing acquisition". 8-figure acquisitions don't happen without a shit-ton of due-diligence. If you feel someone is truly interested, retain an M&A lawyer and get their advice before giving access to anything beyond basic numbers.

Good luck and expect to be challenged/busy whichever way you go.

I think you were referring to Marc Andreessen's AMA with Stripe Atlas founders [0] which was as recent as July:

"Getting a warm introduction to a VC is a basic test of networking skills.

VCs are dying for interesting qualified referrals from people in their network—angel investors, other VCs, advisors, coaches and mentors, lawyers, and customers. All of those people love giving qualified referrals to their favorite VCs. VCs are some of the easiest people in the world to reach via their networks.

It turns out that the skill required to network into a VC is the same as the skill required to network into a customer, into a supplier, into a distribution partner, into the press, into an executive search firm.

And so if a founder can’t navigate a network into a VC firm, it is unlikely that founder has the skills to navigate the other networks required to succeed in building a company."

[0] https://stripe.com/blog/marc-andreessen-ama

Yes that's it. Thanks.

Re the "know how to hustle" thing - building a successful business takes a lot of "hustle". If someone succeeds at that, they've proven that they can do it.

The notion that someone needs to meet some invisible bar of proof beyond building a successful company is - to me - yet another symptom of the damage SV has inflicted on the minds of a generation of technically inclined enterpreneurs.

Think about how many emails you get. Now imagine yourself in a position where everyone knows you invest big money on a regular basis, and imagine how many orders of magnitude more emails you'd get.

Investors trust people in their Network not to waste their time (everyone's most precious asset). It's a sane filter... You just may not empathize.

Which successful business are you talking about? OP's business is clearly promising, but if it needs $2M to keep going, success is clearly still ahead.

For LPs trusting a VC with their cash, successful means the company growing 10x in the next seven years. That VC's conviction that the ability to hustle is between where OP is and 10x is something you could disagree about, but I'd say it's somewhat less arbitrary than forking over $2M at just the data given.

Maybe different financing tools would allow for different definitions of success, and different guesses about what the OP needs to get there. I'd like to see someone weigh in on debt financing options, which I don't know enough about. But nobody is abusing young minds here.

10x? At seed stage? Try 1000x.

I bet that the "know how to hustle" is a backwards theoretical story. In reality VCs just empirically find cold calls to be much worse because it's diluted down with a lot of really random people. If that's the case that'd be unfortunate because a mindset change wouldn't be sufficient to reverse the trend.

If you don't like that word, use persistent, relentless, scrappy, or whatever. It's not an invisible bar beyond something. It's a trait that increases your odds of success.

Don't put words in my mouth

Whilst it might be a general concept, the most recent time I heard your paraphrased notes on warm introductions was Marc Andreessen at Startup School.

Both the video and the transcript (with the warm introduction question first) are available at:

http://blog.ycombinator.com/marc-andreessen-at-startup-schoo...

My recommendation is to get a broker. FE International is particularly good: https://feinternational.com/

A good broker should be able to tell you if an offer is fair, and also protect you from the risk of them just doing due diligence to steal your secrets.

Reply on news.ycombinator.com