Garry Tan

Garry Tan quotes on investment

Founder Initialized. PM/designer/eng turned Forbes Midas List Top 100 VC in startups worth over $40B, before product-market fit.

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1

Show me a fancy resume and I feel nothing. Show me who else is investing and I see lemmings jumping off a cliff. Show me a big unaddressed problem and I am listening. Show me the solution you’ve built and I lean in. Show me the team of true believers you built and I invest.

2

Great startups are cleverly selected groups of talented people running hard in a particular direction in lockstep, making valuable things. The money is the byproduct. Focus on the money too much and you mess up the group, the direction and lose the money.

3

Investors at early stage are usually willing to take one of the two: team/execution risk (Can they build and scale it?) or market risk (Do people want it/can it grow quickly?) —If you’re pitching, you should know which risk you are asking investors to believe you can overcome.

4

Show me a get rich quick scheme and I don’t care. Show me a cause that will stir the hearts of talented people and rile them to action? Give them focus, purpose, and meaning? I want to invest.

5

At early stage, be sure to find some investors who started as labor, then became management before becoming capital. 💪

6

Lots of college students reach out to me asking me about how to be a VC. I tell them: be a founder first. The best VCs are chosen by founders based on how much they can help bake the 10 year overnight success. Power laws plus adverse selection equal bad returns. Be a founder.

7

If you get slept on, it’s ok. Keep working. Throw that rejection letter on the fire in your heart and burn brighter.

8

More founders would survive if they thought of their seed round as not $X M in the bank but 24 months to grow 3X+ a year or be profitable.

9

The hardest part about early stage investing is being strong enough to resist saying “This will never work.” The antidote to this is asking “What if it did?” And “What do others understand about this that I don’t?”

10

Investors tend to make all their money in 2 ways: being in the deal everybody wants to be in, or being in the deal nobody wants to be in.

11

It’s always a bad sign when 5 min into a conversation, it turns into a buzzword signaling competition. Startups are best explained using plain English and first principles. It’s too easy for emperor-has-no-clothes situations to crop up when it’s an abstraction house of cards.

12

Strange paradox: some of the industries that require the highest integrity founders seem to attract the lowest integrity founders Finance, anti fraud, medical technology, nonprofits There’s a reason why smart investors do a lot of due diligence work. Know who you work with.

13

Founders beware: Tossing buzzwords like blockchain or AI in a pitch without real use cases will turn off good investors and attract the dumb

14

Subtle real advantage nobody talks about: if founders can access deeper pools of capital early/quickly, they can get bigger faster without spawning lots of competitors. If your startup is real, pitching Sand Hill is sometimes like giving away copies of your treasure map

15

Early stage startups should probably keep track of two types of runway: * Optimal plan (includes revenue) * Worst case (no new revenue) Be able to execute to take advantage of good opportunity (optimal) but know what happens if it fails— and have a plan B.

16

When you figure something out, the copycats come and fast. The trick is to always be better/cheaper/faster—they can only copy what you did 6 to 9 months after the fact if they're good, and never if they suck. Related: That's probably one of the few reasons to raise mega-rounds

17

The sweet spot: Get to $10M ARR without giving up control of your startup and it makes it possible to get to $100M easier. No meddling.

18

The biggest falsehood believed by every first time founder who has raised a seed round: That there is more where that came from.

19

All founders want investors who can help, write real checks, make decisions quickly, and do no harm. We should have a Hippocratic oath.

20

Growth rates are just data. Good investors know they have to understand the business and the founders to tell if there is long term value.

21

Raise your next round at inflection points when you've proven something—not arbitrarily when you're 6 months away from running out of cash.

22

The borderline scam that still happens: Startups that pump numbers with paid acquisition to show a ramp prior to a big fundraising round

23

Spend too little and you might not raise more capital but you can get profitable, then grow from cash flow. Spend too much? You are dead.

24

Average seed investors rely solely on signifiers (college, job, resume) and then vague pattern matching against what they read online. 📉

25

Equity is for full time founders. If someone wants a full time share without putting in the work or capital, be wary.

26

Some VCs like taking risk in early teams and buying ownership at low valuations. Others airlift cash into all star teams with enough proof points and try to use capital to derisk ventures as much as possible.

27

One thing I am starting to realize is if you can’t get either, the founder is better off cutting burn and starting over (or shutting down) One of the hardest convos in the life of any startup Sometimes you just know. But sometimes your friends have to nudge you. Never easy.

28

Founders— don’t get pitch advice from too many folks, or you’ll have a frankenpitch. Also ignore advice from your rando I-banker friends.

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