I bet I've heard 100 startups explain why they failed to raise money, and I don't think I've heard one say that the reason was that their company seemed unpromising. And yet that is almost always the reason in the investors' minds.
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And if you can't explain why they're wrong, you've just gotten a bug report about your company that might be more valuable than the funding you were seeking.
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Why wait until the middle? I think it could be a useful exercise for founders to say to themselves, before even approaching a single investor, "VCs don't think my company is promising; why?"
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This has to be the most Paul Graham sentence ever written: kinda obvious, very illuminating, and something you instantly want to suggest as a palm tattoo to most entrepreneurs. And by “suggest”, I mean, ask for foregiveness rather than permission.
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But most VC folks don’t share the real reason of not investing. Atleast this is quite common in India. Another thing I have observed here as an early stage VC that many business are good but they are not fundable because do not offer VC return.
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