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Should you raise on convertible notes or do an equity round?

Hippoland

A reader named Turner Dean recently asked me whether it’s better to raise seed money on convertible notes or straight-up equity. Just do a Google search. In general, I’m a big fan of convertible notes or convertible securities for seed stage founders.

Equity 48
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Traction vs. Product

Rob Go

I’ve had a couple conversations with other investors recently around what a seed stage company needs to achieve to raise a series A. You are searching for stuff that is repeatable and scaleable. Instead, what I often see is that the minute seed money is in the bank, founders try to staff up very quickly.

Product 28
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How to Start a Startup

www.paulgraham.com

Googles plan, for example, was simply to create a search site thatdidnt suck. They had three new ideas: index more of the Web, uselinks to rank search results, and have clean, simple web pages withunintrusive keyword-based ads. For example, dating sites currently suck far worse than search didbefore Google.

Startup 105
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How to Fund a Startup

www.paulgraham.com

It wasnt because they werent accredited investors that I didntask my parents for seed money, though. When we were starting Viaweb,I didnt know about the concept of an accredited investor, anddidnt stop to think about the value of investors connections.The reason I didnt take money from my parents was that I didntwant them to lose it.

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The Future of Web Startups

www.paulgraham.com

Larry and Sergey only started Google after making the rounds of the search engines trying to sell their idea and finding no takers. The way to get really big returns is to do things that seem crazy, like starting a new search engine in 1998, or turning down a billion dollar acquisition offer. Ask anyone whos done it.

Web 54
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The Series A crunch is hitting now. Have we even noticed?

pandodaily.com

If you are raising a seed round now, there are a few things you can do to protect yourself. There are still the same debates on whether or not you should take seed money from VCs. Lastly, seed-stage entrepreneurs who have pushed for the maximum valuation possible haven’t done themselves any favors.