Show an arbitrage to raise - 5 startup tips from James Altucher

Jul 02, 2024

James Altucher is a serial founder, investor, and bestselling author, who made his fortune, lost it, and made it again three times.

 One of his favorite topics is startups and entrepreneurship, so we gathered five of James Altucher’s tips for founders raising capital:

  1. Get traction and sales, only then raise VC money. Whenever possible, prefer to make money over raising money. 
  2.  Show there’s an arbitrage. An investor must be convinced you are presenting them with a unique and timely opportunity to make an outsized return. So show them there is an arbitrage they can gain by acting now and investing. 
  3.  Don’t worry about NDAs. No one will steal your idea. You will look like an amateur if you insist on one when approaching VCs.
  4.  Don’t worry about dilution when raising: James believes you should take the money whenever an investor is willing to invest a meaningful sum. In other words, the value of getting capital and the ability to move fast almost always outweigh the cost of equity. 
  5.  Don’t use your equity to pay for services or hire early. James believes that should be avoided, the equity given is usually not justified, and you will get lower quality help, too. 

* You can find these tips along with many others in his James Altucher’s blog.

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