Raising money at demo day is somewhat correlated with success, but many companies that had trouble raising seed funding go on to become huge, and many companies that were hot at demo day fizzle out.
Early-stage fundraising success is a function of how many investors think the company is promising. Investors work hard on learning to judge accurately, but they can't see the future and they are often wrong. They can be wrong both by adding random noise to each judgement, and by being systematically wrong in their investment thesis.
If you could figure out with high accuracy which startups would succeed, you could:
- make $100B in 10 years
- increase the world's rate of technological progress
- reduce the vast waste of creative manpower at doomed startups
Early-stage fundraising success is a function of how many investors think the company is promising. Investors work hard on learning to judge accurately, but they can't see the future and they are often wrong. They can be wrong both by adding random noise to each judgement, and by being systematically wrong in their investment thesis.
If you could figure out with high accuracy which startups would succeed, you could:
- make $100B in 10 years
- increase the world's rate of technological progress
- reduce the vast waste of creative manpower at doomed startups