In your example of 'an investor who waits like that is going to end up paying a much higher price', the visionary investors who said yes to the convertible note will get a very similar price (20% discount?) for taking all that risk.
Put yourself in an investors shoes: Which round would you want to invest in? Wait and see all the progress and pay 20% more or invest early and in a great scenario pay 20% less or in a worse case scenario see it go nowhere?
To be clear, we wanted to setup the program with a complete handle on reality and to be supportive of many different options on financing - bootstrap or institutional - and where they are based - Sydney or the Valley or in the many cases currently a grey area of being in both.
The two weeks in the Valley at the end of the program is to connect with the Aussie community that is just starting to establish itself, to introduce the startups we are working with to the most useful people we can and then to hold a demo day for early stage investors as well. Plus it's hard not to get drunk on the inspiration of meeting other great startups.
We fully intend to be very open about the way we do business and bring a local angle on the type of great stuff folks like venturehacks have done in the US.
Also, for Aussie startups if there are issues around company formation and things like migrating an Australian company to a Delaware C-Corp etc we can share, we will.
One point about the index funds (besides from being very hard to beat the market even working full time on it) is that the huge fees compounding on hedge and mutual funds also take away most of your gains. 2% compounded over 30 years wipes out a lot of the alpha.
Paul, why do you call the firms clones? Aren't you a clone of a seed stage incubator? I absolutely love what you do but to say that there are clones in the investment world (where there is zero scale) is a weird way of looking at the world. You probably have enough money to fund every good idea in each intake but you certainly don't have the time to spread out across those ideas. So if you have inspired more capital to come into this stage then surely that is a good thing for founders?
If there is competition, then founders only win out in the end. If someone was 'pressured' into accepting before other options played out that should be a huge signal to the founder that the firm is less than desirable.
One idea: Create two companies, a US company and a company in your local country. You local country affiliate can pay your salary and the US company can pay the foreign company like a vendor.
After a year or so, you will be eligible to get a company L-1 transfer visa.
Or if you don't plan on paying yourself through the company in the first year or so, try to get a visa at another company (perhaps you are consulting for a small number of hours per week?). You wont be an employee of your startup, but you will be the owner.
One word: Indexes. See what queries are taking the most time, and then add indexes to them. Can speed up your app by 1000x if there is one query that is running wild.
I completely agree. Seed financing is inherently unscalable. Investment partners need to spend a lot of time per investment and that severely limits their output.
Just like Sequoia are not a 'clone' of Kleiner Perkins, the same is to be said for competition: because both are unscalable businesses they can successfully co-exist and it certainly isn't a winner take all market. Indeed, the market is crying out for more firms, but the contraint is skilled early stage investors.
Also, Andy and Chris (who this article is about) both rock.
Honestly, you'll waste your time. They'll see you coming from a mile away.
A fantastic source of market research is from larger public companies. Look up their most recent 10-K (annual report). They are legally obligated to give a fairly detailed market analysis (that synthesizes the research from folks like Gartner etc.) in each annual report. It's a great starting point.
Also, for most startup 'markets' there isn't actually a market. It's completely new. So 'market research' in this sense is not very useful and you should examine the premise that you need to do market research at all (versus say concentrating on whether consumers actually have a problem that you can solve).
Err yeah sure that will work. My advice: read the four hour work week. Not for the four hours but for putting you in a position to work for yourself and work as an employee.
Focus obsessively on your productivity on your current job and take on no new tasks. Hopefully get your tasks done in 10 hours per week (very easy if you get rid of all possible meetings and phone calls). Use the extra time to work on your own startup.