Which investors will invest in your startup? (opens in new tab)

This post is great. Having been through YC and TechStars (separate companies) and founding a crowdinvesting platform, it seems to me that early stage investing is very much about who you are and the relationships you've built. You can raise money and survive without significant traction a priori.

What's interesting to me is how the barrier for investing is being lowered (e.g. JOBS act) and how that's going to impact the dynamic of raising money. Startups are going to be able to find people in their industry who grok what they're doing (e.g. their customers) and raise small amounts of money from many people. It's going to be easier for investors to make more small bets ($1k instead of $50k), so I think the need for obvious traction early on (graphs going "up and to the right") is going to keep decreasing and it's going to be more about speaking to a niche of investors in your space and being great with product and communication.

Does "Investing in You", "Investing in your idea/team", and "Investing in traction" correspond to Angel, Seed and VC funding? If yes, this might mean the answer to "Investing in ..." should help you decide what round of funding to raise. If you already have traction, you might be in a good position to approach a VC. If you just have an idea or a team, then you must approach an incubator/seed fund...

I don't know how much I agree with this - at the seed stage, in many cases, the ONLY thing you're betting on is the team. Ie, that they have a coherent idea is a good thing, but you're really betting on them figuring something out. Of course, there's seed (like YC thinks of it) and seed (literally, the first $20k).

The third pie-chart is categorically wrong. I get the key point Gabriel is trying to make (that it's all about the team), but that green should at least be over 1/3rd of the pie.

I wonder if "Investing in You" should be included somewhere before "Investing in Your Team" -- in some sense, that separates the "friends and family" from the "incubators"

Great post and it certainly brings up a valid point, which is traction trumps all.