How to raise money

Great article from Paul Graham about the whole process of young companies raising money, and the many pitfalls. Bit long read, but very rewarding for people who are looking for support in this field. It is also filled with good common sense tips.

Readers should be aware of the following:

• It is US centric (but most advice will also hold in Malaysia or Singapore)
• It is mostly meant for tech centric, innovative companies, based in Silicon Valley, wanting to raise seed money or "Series A", say up to USD 3M (but again, lots of common sense that is also true in another environment)
• It is also partly geared towards the Y Combinator program

Y Combinator is a incubator in the US, it describes itself as:

"In 2005, Y Combinator developed a new model of startup funding. Twice a year we invest a small amount of money ($14-20k + an $80k note) in a large number of startups (most recently 52). The startups move to Silicon Valley for 3 months, during which we work intensively with them to get the company into the best possible shape and refine their pitch to investors. Each cycle culminates in Demo Day, when the startups present to a large audience of investors. But YC doesn't end on Demo Day. We and the YC alumni network continue to help founders for the life of their company, and beyond.

Since 2005 we've funded over 550 startups, including Reddit, Loopt, Clustrix, Wufoo, Scribd, Xobni, Omgpop, Weebly, Dropbox, Disqus, Songkick,  WePay,  Twitch, Heroku, A Thinking Ape, Machine Zone, Cloudant, Airbnb, Cloudkick, Stripe, Mixpanel, Listia,  Cardpool, Optimizely, AeroFS, Homejoy, E la Carte, PagerDuty, Hipmunk, Pebble, FiveStars, Parse, Meteor, Rap Genius, Codecademy, SocialCam, 42Floors, iCracked, Exec, Rescale, Thalmic, and Airware."


Both in Malaysia and Singapore the governments are quite active in trying to support the eco-system for innovative start-up companies, through the use of grant schemes, tax rebates, infrastructure, etc. I don't think it is possible to get even close to the Silicon Valley success and mentality, but the efforts should have a positive effect. Some large, high-profile successes are needed, to lift the profile of Southeast Asia in this area.