Startups
Seven questions your pitch should answer
Tunguz lists the questions a venture investor might ask in a first meeting: the problem and why now, the team, the competitive angle, product validation and sales, customer acquisition and unit economics, the revenue model, and market size. He says answering them in a generic fundraising deck is a solid starting point, and that the points should be united with a single theme or story.
“What is the problem and is it worth solving?”— Tomasz Tunguz, The 7 Questions A Startup Should Answer in their Fund Raising Pitch, Mar 2013
Do this: Write one short answer per question in a single document this week, then check that your deck answers all seven with one story running through it.
Cash-flow business
Venture money made stalled growth a crisis
Lavingia describes Gumroad's venture-funded years, when growth had to keep doubling to justify raising a larger round. When the numbers fell short of a Series B, he chose to become profitable at any cost and shrank the team from twenty to five. Monthly net profit moved from -$351,000 in June 2015 to +$10,000 in June 2016.
“But we were venture-funded, which was like playing a game of double-or-nothing.”— Sahil Lavingia, Reflecting on My Failure to Build a Billion-Dollar Company, Feb 2019
Do this: Write down the monthly growth your current funding plan requires, and check whether the business could survive if the next round never came.
Startups
Lead the pitch with a story, not numbers
Wilson says a picture or vision lights up his imagination in a way numbers do not, and he urges entrepreneurs to focus on narrative in the initial meeting. Numbers are easy to challenge, while a well-told story is harder to attack. If the investor bites, there will be a chance to go over the numbers later.
“It's harder to poke holes in a story, particularly if it is told well.”— Fred Wilson, Narratives Over Numbers, Apr 2010
Do this: Rewrite the first two minutes of your pitch as a short story about the shift you are betting on, and keep the detailed numbers for the follow-up.
Cash-flow business
Set your rate from sellable hours
Welsh set a yearly income target, divided it by the billable hours he could sell, and got an hourly rate. His calendar then filled with clients and left no time to run the business, so he raised the rate for new clients and grandfathered the existing ones. He earned the same from half the hours and used the freed time to build his first course.
“Divide $500,000 by 1,600, round a little, and there was my rate.”— Justin Welsh, Give yourself a raise., Sep 2026
Do this: Divide the income you want by the hours you can realistically sell, and compare the result with what you charge today.
Startups
Pick good investors and finish quickly
In an email to YC founders, Altman says to care more about good investors than good valuations, insist on clean terms, sell about 20% of the company in a seed round, and raise enough to reach the next significant milestone. He also says to get the process over with reasonably quickly so you can get back to work.
“You should care more about good investors than good valuations.”— Sam Altman, Fundraising Advice for YC Companies, Feb 2016
Do this: Write down your round size, the milestone it must fund, and an end date a few weeks away, and tell every investor you talk to that timeline.
Cash-flow business
No investors, nothing to waste
Sivers says having no funding was a big advantage for CD Baby. During the dot-com boom he turned down regular calls from investment firms and spent his effort only on customers. Because he could not afford a programmer, he learned programming himself from a $25 book.
“By not having any money to waste, you never waste money.”— Derek Sivers, The advantage of no funding, Jul 2011
Do this: Before your next hire or tool purchase, ask whether you could learn or build it yourself this week.
Startups
Don't pitch VCs before you're ready
Gil says every time you pitch a VC and they pass, the bar for them to invest later goes up, so timing relative to your traction matters. He suggests checking your runway and traction, planning around near-term milestones, and having a clear, cohesive story before you meet anyone. He warns against meeting a bunch of VCs for coffee two months before an official raise.
“Treat this as a sales call, not a casual conversation.”— Elad Gil, The Danger of Pitching VCs Too Early, Jun 2013
Do this: Write down the growth, engagement and revenue numbers you think a VC would need to see, and hold off on investor meetings until your story and traction match them.
Cash-flow business
Take profits while the good years last
Hansson uses the Flip camera, which sold well until phones replaced it, to argue that a product's best run may be short. In his view a business should take profits along the way instead of investing everything in future growth. He guesses that Dropbox and Evernote did not heed this lesson.
“Don’t just keep putting it all on red and rolling.”— David Heinemeier Hansson, Making money along the way, Sep 2015
Do this: Decide this week what fixed share of this quarter's profit you will take out instead of reinvesting.