5 startup fundraising tips from Y Combinator's Garry Tan

Visit Meet.Capital, sign up for our weekly newsletter - and get a free list of 500 active seed VCs.

Garry Tan , CEO of Y Combinator and co-founder of Initialized Capital , is one of the top voices in today’s startup world and one who generously shares insights and teachings with startup founders.?

We researched to find five of his essential tips on raising capital for your startup:

1. Validate your market first: Before reaching out to investors, validate your product. Actual traction, or even an apparent demand, is more persuasive than a well-crafted pitch deck. Gather the data that proves that you are solving a real problem people are willing to pay to solve, and you are on your way to securing the capital you need.

2. Focus on your long-term vision: Investors want to see beyond your initial product launch; they are looking for founders with a vision. It helps to create a clear picture of the long-term potential of your company. Your vision should be ambitious yet feasible, indicating that you are in it for the long haul. Showing your startup’s place in the market 5-10 years from now can make lasting impressions on investors.

3. Build relationships early: It is about securing funds and building lasting relationships with potential investors. Engaging with potential investors before you need funding can foster trust and allow them to follow your startup journey. It helps to reach out months before fundraising, giving investors time to see your progress and growth and making the eventual pitch more natural.

4.?Never over-optimize for valuation: While a high valuation seems attractive, a warning as an early-stage founder is that you should prioritize savvy investors over their inflated investors. When you chase the highest valuation, it can lead to unnecessary pressure and unrealistic expectations. Instead, focus on finding investors who bring value beyond money and offer strategic guidance and long-term support.

5. Embrace transparency in communication: When communicating with investors, always be transparent. By being upfront about challenges and how you plan to overcome them, you can establish trust and demonstrate your resilience as a founder. This approach fosters credibility and can open the door to valuable feedback from experienced investors.

*References/recommended deep dive: Tan’s videos on YT, especially Roll Your Way to a Startup Unicorn and Unconventional Advice for Founders.

How to meet the investors you want:

1. Startup toolkits: everything you need to meet investors.
2. Curated, downloadable lists of active investors.
3. Get meetings with qualified angel investors, via Linkedin, with our managed outreach (apply here).