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A Summary of

How to Convince Investors

by
Paul Graham
Paul Graham
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In order to raise money, founders need to demonstrate certain qualities in order to convince investors. Three things founders need: (1) be formidable; (2) have a promising market; and (3) have some evidence of success so far.

Formidable

Investors seek founders that are genuinely confident and appear prepared, when facing adversity.

Truth

Formidable founders are sincere, do not attempt to mislead investors, are domain experts, and have a provisional roadmap on how to succeed.

Market

Startups are considered a good bet if they are targeting a large market and demonstrate the necessary expertise and traction to capture the market.

Rejection

Investors seek to know about the other investors involved in a company. When asked about other investors, founders should not lie but be genuine and ultimately state how they have changed since past rejection and that they are in talks with others.

Different

Founders need to convince investors that their startups are not speculative. To impress investors, founders need to 1. Make something worth investing in. 2. Understand why it's worth investing in. 3. Clearly explain that to investors.

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