Ask YC: How important is it that your investors are into what you're doing?

[wheels]

We're just starting to deal with our first couple of VCs / seed investors. There's quite a bit of contrast between the investors and investors' analysts that we've talked to. Some are very excited about our technology; some seem to focus mostly on "pure" business.

As a technology-centric early stage startup, how important is it that investors really identify with your pain points? On one side there's Guy Kawasaki's "all money is green", on the other hand, it seems like at an early stage that having investors that will go out and evangelize for you to their network could be essential.

I'm interested in experiences that others have had here.

[marketer]

I think the sales analogy works - a good salesman will always have people paying for his products, even if they're garbage. Having an awesome product will make things a lot easier, but the presentation is a huge factor as well.

How long can you scrape by without funding? The longer you wait, the more leverage you'll have, especially if you have a high quality product.

Sam Altman does a great job explaining the funding process:

http://www.omnisio.com/startupschool08/sam-altman-at-startup...

[vaksel]

Not speaking from experience but I would go with the guys who are excited about your product. You can always tell when people are sincere about their excitement and when they are faking it to push something.

[wheels → vaksel]

Well, all things being equal, sure. I guess to refine my question a bit, compared to the terms offered or doing a joint vs. solo round, etc. I'm curious how big the role of the VCs being interested in things ends up being.

While we've been fortunate enough to have VCs approach us, they're still not exactly pelting us with term sheets, so it's more trying to see where it's best to concentrate our efforts.

[netcan → wheels]

Do you have alternatives?

If you're speaking hypothetically to figure things out, maybe keep the (hypothetical) alternatives all on the investors' side of things.

Something like ''brand name' VCs that don't care vs lower tier VCs that are excited about the technology'.

[wheels → netcan]

If I understand your question -- these aren't hypothetical VCs that we're dealing with -- we're in talks with two different VCs with a couple contacts at each. But deals take a while. I can't say at this point that we'll get a term sheet from either. Statistically, probably not (think of Paul's mantra here: "deals fall through"), but we're trying to think of under what circumstances we would accept investment from these guys or investors we deal with in the future.

We're fortunately in the position of being able to survive for at least a year without investment, but taking investment would allow us to grow faster and specifically to hire a couple of people. Just going with bootstrapping we're probably at least three months out from having revenue enough to hire someone.

[netcan → wheels]

I was just trying to simplify the comparison for the purpose of valuing a VC's excitement about your technology ( assuming that you are unlikely to be looking at 2 term sheets simultaneously).

Unfortunately, I don't have the experience to offer any useful advice myself.