Disclosure
Michael Seibel: Angels write 10% of checks just to avoid saying no
“Category three that people don't talk about. If they ask me, it will be uncomfortable for me to say no, so I will write them a check. I'll tell you that in my experience, this is up to 10% of the time. I am hoping the founder doesn't ask me for money. Because …”
Insight
Seibel: Hiring a designer for a startup pitch deck is a mistake
“If you need a designer to build a slide deck, you're doing it wrong. And here's an even deeper, more important point. Your designer has no idea what the most interesting and important points of your pitch are. So if you hand them your pitch to design, they wil…”
Insight
An 'A' investor provides capital, signs paperwork, and stays quiet
“An A investor gives you money, signs paperwork when you want them to, and shuts the fuck up. That's an A. There's a lot of room below an A. There's not a lot of room above.”
Insight
Michael Seibel: Startups need separate pitch explanations for investors and customers
“You need two different answers to what do you do. One that you give investors, and another one you give customers, and they're different. The words on the front page of your website are for customers. If you're using that for investors, more often than not, yo…”
Insight
Seibel: Pitch descriptions should prioritize 100% clarity over complete accuracy
“Your goal should be 80% accurate, a hundred percent clear, not a hundred percent accurate, 50% clear.”
Insight
Seibel: Investors convince themselves to invest the more they talk
“What most people don't realize about investors is that you're not really convincing an investor to invest. They're convincing themselves to invest. The more they can talk, the more they can talk themselves into giving you money.”
Insight
Seibel: Raising from Famous VCs Does Not Signal Product-Market Fit
“The vast majority of the best investors have invested in whole dozens of companies you've never heard of who've died. And so it turns out that because you raise a check from a famous name, or because you're able to raise a lot of money, almost has nothing to d…”
Insight
True product-market fit punches you in the face with overwhelming traction
“When success happens, it's gonna punch you in the face. And you're not going to be able to confuse it for anything else. If you're not getting punched in the space with traction, you're not succeeding, and you don't need all those people.”
Insight
B2B startups need $150k-$250k MRR for maximum Series A leverage
“Usually our guidelines for B to B companies is trying to be in the 150 to 250 K a month range. That, and close to profitable. That puts you typically in the maximum leverage category, which significantly increases the chance that going out and raising a series…”
Opinion
Investors show a heavy, unwarranted bias toward second-time founders
“In reality, two things are different. Investors, I don't think for a good reason, significantly bias for second time founders. Significant bias towards second time founders. And there's something you have to understand. Second, if you've been in the valley for…”
Insight
Seibel: Pitch ask slides should focus on milestones, not hiring plans
“Talking about who you will hire on the ask slide. Nobody cares who you will hire. They care what you're going to do with the money, and more specifically, what revenue milestones you're going to hit, or what usage milestones you're going to hit with the money.”
Insight
Reaching 8-12 employees forces pre-PMF founders to manage instead of iterate
“Around that size the primary job of a CEO has to start switching to management. And usually for a pre-product market fit company, the primary job of the CEO should be to focus on product market fit.”
Insight
Seibel: Selling to startups works if the product is critical infrastructure
“We've seen a long history of YC companies be very successful in selling to startups initially. If they're selling key components that if they work, they will not be ripped out. If your payment system works, you're not going to rip it out.”
Insight
Seibel: The only short-term skill investors iterate on is closing deals
“There's only one skill that an investor can iterate and improve on in the short term. It's hard to know whether you're a good investor for years, but it's easy to know whether you're good at this very quickly. And that skill is closing.”
Insight
Seibel: Pre-PMF startups must minimize non-essential staff and fire frequently
“An early stage pre-product market fit company should be trying to minimize their non-essential employees, and you should not believe you're great at hiring, which means, unfortunately, you're probably gonna have to do a lot of firing.”
Insight
Seibel: Non-essential hires after three months indicate a bad hiring decision
“If someone is not an essential employee within three months, that's often a great sign that you didn't make a good hiring decision.”
Insight
Seibel: Startup success hurts more than failure due to high expectations
“I think the funniest thing that happens in startups is success hurts more than failure. Because success comes with all these expectations.”
Insight
Seibel: Founders stand out by being concise, not theatrical
“A lot of people think that they need to bring a bunch of energy and pizzazz and sizzle and shark tankiness to a pitch. You don't. You actually stand out by being concise and easy to understand.”
Insight
Michael Seibel: Explain your startup in two sentences and one example
“You need to be able to say what your company does in two sentences, and you need to be able to give a specific example.”
Insight
Seibel: Founders establish expertise by showing personal experience with the problem
“If you can weave how you've experienced the problem into the team slide, suddenly I think of you as an expert.”
Insight
Seibel: Founders should never pitch life stories unless explicitly asked
“There is no opportunity in your pitch to tell your life story unless the investor asks explicitly for your life story, and you should double confirm they want to hear your life story.”
Insight
Seibel: Early investors value execution speed over revenue numbers
“What investors are looking for is momentum. They're looking, do you get things done quickly? They're not necessarily looking for, do you have a ton of revenue or a ton of users? If they're investing in an early stage company, they know that you might not have …”
Insight
Seibel: Founders fail by omitting timeframes from traction slides
“The biggest mistake YC founders make here is they say this list of things, and they didn't tell me do they do it in a month, or four months, or a year, or two years. Without the time, I'm not impressed.”
Insight
Seibel: A bad traction slide is worse than no traction slide
“Putting a bad traction slide is worse than having no traction slide at all.”
Michael Seibel