That may be true for YC which does seed funding but the model for VCs that invest large sums of money is based on the home runs and if you can't show the hope for a home run, they'll probably not be interested.
of course, if you are not looking for seed funding (or angel funding) and looking to raise a serious series A then you will have problems... but I think if your market is in fact not too big, then you must avoid raising too much money, since there are only two scenarios where you'll actually be able to raise that much money for a project like this:
1- you raise money from an idiot, i.e. someone that really doesn't know what they are doing. You are always better off not doing that no matter how much they give you
2- you can prove the idea will work, and you can gain the trust of the investor in you and your team. In this case you might be able to convince a good VC to invest in the company but you will then have to give up the majority of your shares in the company
If the market is in fact not that big, why would you have to raise so much money! do you think its reasonable! And if no VC out there can tell how big this market really is or how good the potentials of this business (which is already making money, a rare case!) then maybe there is something theyoungceo can't see, and maybe its really not as big as s/he thinks it is
Anyways, I have a feeling this post is a bit about possibly finding some potential investors rather than getting advice. Which is fair, but not sure if these advices are really what the theyoungceo is looking for.
Also why is the name of the company not mentioned? (specially that the company is already out there and doing business!)
The market doesn't need to be a quagillion dollars to need sales and ops guys; I still dont' quite understand the point of "sizing a market" -- I have already proven that there are plenty of people who want the product badly out there, and always thought that would be enough. No matter what you invest at what percent, this one has a lot of proven traction already and is more likely to be a winner than most deals (I think). I think what I'm getting at is the question of: what do you do if the VC model just isn't quite right? It seems everyone assumes there is no business growing with them.
Also:
-theyoungceo isn't naive enough to believe that investors are scouring news.yc for deals, although he'd love to be proven wrong.
-i didn't mention the company name because i know everyone knows everyone in SV and it might be unprofessional to be discussing this here from an investor's perspective (IMHO)
There are a lot of organizations looking for investment opportunities. If scalability matters I'd find a more established company in your field and try to get them on board.
1- you raise money from an idiot, i.e. someone that really doesn't know what they are doing. You are always better off not doing that no matter how much they give you
2- you can prove the idea will work, and you can gain the trust of the investor in you and your team. In this case you might be able to convince a good VC to invest in the company but you will then have to give up the majority of your shares in the company
If the market is in fact not that big, why would you have to raise so much money! do you think its reasonable! And if no VC out there can tell how big this market really is or how good the potentials of this business (which is already making money, a rare case!) then maybe there is something theyoungceo can't see, and maybe its really not as big as s/he thinks it is
Anyways, I have a feeling this post is a bit about possibly finding some potential investors rather than getting advice. Which is fair, but not sure if these advices are really what the theyoungceo is looking for.
Also why is the name of the company not mentioned? (specially that the company is already out there and doing business!)