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Very strange reading the papers in the UK and hearing news from the USA about budget cuts and contrasting it with the talk by Paul Graham at the Y Combinator Startup School 2010.
Graham’s talk is all about lots of clever money seeing the quick returns on startups in Silicon Valley and wanting some of the action. The angels are forming Super Angel groups and the VCs are prepared to invest smaller amounts for first rounds of £300k. The valuations are going up and up so it is a good time to raise funds providing, as always, you make great progress and can justify a higher valuation at the next round. Lack of progress can lead to a lower valuation and a dreaded downround or no round.
Ignore the gloom about budgets and get out and start a great company. But whatever funds you are offered, use a great business plan resource and keep exceeding the targets. Graham pointed out the recent effect of small startups funded by angels being bought up early giving returns of 10x to angels in one year. As returns have to be related to time, these 10x returns in one year are way ahead of the returns angels received in even Google where they had to wait five years.
Are you Booming or Busting?
But take great care as ever!