5 tips from Y Combinator founder Paul Graham: How to convince investors

Today's 5 startup fundraising tips are taken from a classic essay by Paul Graham - one of the founders of Y Combinator and a Silicon Valley legend - titled How to convince investors.

I highly recommend that you take the time to read the whole essay. Meanwhile, here are 5 quick takeaways:

1. Be formidable: Investors are drawn to formidable founders who give the impression of being a winner. Be 100% honest and open, don't exaggerate or inflate your story. Work on your inner strength and your conviction in your startup's success. Your pitch deck can't do this for you.
2. Convince yourself: The key for #1 above is convincing yourself of your startup's success. Why would anyone else believe in it and invest their money if you aren't convinced of your own success? Your chances of faking your confidence are very small. But if you are convinced it will be easy for you to share your vision with confidence when talking to investors.
3. Be a domain expert: Investors will believe you could be a winner if they see you as an expert in your startup's domain. Again, it will be very hard to have investors believe you're an expert if you aren't one really. They will ask a lot of questions. The better way is to actually be a market expert. If you aren't one already, learn every nuance of your market and become one. That expertise will project itself to investors and will help you convince them.
4. Be concise: Your ability to convey your message with clarity and brevity will impact the way investors value you. If you lack it, investors will see it as a sign that you are not prepared to win and succeed with your startup.
5. Tackle their doubts head-on: Meeting investors will almost certainly result in many rejections. Next time you talk to investors, you will know what objections investors might raise, and the reasons they might reject you. Don't be evasive or apologetic about it. Instead, explain why the other investors rejected you and why they're wrong. Investors know that investors can be wrong and miss a good investment opportunity, so they will be open to hearing your reasoning.

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