A Fundraising Survival Guide
Paul Graham’s essay A Fundraising Survival Guide argues that fundraising is the second-biggest threat to startups after failing to build something people want.
Why It’s Difficult
Markets are unforgiving, there are few potential investors, and investors behave unpredictably. The investor ecosystem creates instability through herd mentality—one investor’s skepticism can trigger collective rejection.
Nine Survival Strategies
- Manage Expectations: Assume “deals fall through” consistently
- Keep Building: Designate one founder for investors while others continue product development
- Be Conservative: Accept reasonable offers when available
- Stay Flexible: Avoid committing to fixed fundraising targets
- Pursue Independence: Aim for “ramen profitable”
- Handle Rejection Analytically: Don’t internalize rejections
- Consider Consulting: As a survival tactic only
- Avoid Inexperienced Investors: They often create disproportionate work
- Track Investor Signals: Focus energy on the most likely prospects
My Takeaway
Fundraising is a distraction from building. Minimize the time spent on it, and never let it stop your product progress.
What’s your fundraising experience? I’d love to hear at persdre@gmail.com.