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Investor Day

blog.ycombinator.com

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Re: Investor Day

#71

Post by etjossem »

jforman wrote: post #54
zillionize wrote: post #40

Earlier quoted context omitted.

I am an investor and my experience is, if you have done enough homework about the startup you want to meet, twenty minutes shall be long enough to clarify a few key things so you can make an informed decision.

This is probably sufficient for many angel investors, a few seed investors, and very few series A investors. No matter how much homework you've done on a company you can't responsibly deploy $5M after 20 minutes of diligence on the team.

Since this is YC, "many angel investors, a few seed investors, and very few series A investors" are the target audience.

Re: Investor Day

#72

Post by etjossem »

RCortex wrote: post #23

From the way they've set this up, it appears to be optimal for investors and pessimal for founders. Anyone else notice the same or disagree? It's in the proof for a particular theorem.

It is optimal for the more scarce and selective group, whoever they happen to be in a given batch.

Re: Investor Day

#73

Post by lihorne »

emmett wrote: post #65
udba wrote: post #57

Earlier quoted context omitted.

Which is an absolutely awful system, for a multitude of reasons. One of the biggest faults that looks like it might be replicated here (the article does not specify) is that once employers (VCs) rank students (startups), the students can't see the numerical ranking they were given. For example, if I'm a student who was ranked by several companies, I cannot see the numerical ranking they gave me. This introduces a sig…

Why is sharing the rating with students so critical? I can see why people would be curious, but I'm not sure why it matters so much?

Because students don't know how much a company wants them, and so cannot set their ranking with that knowledge in mind. For example, Apple could rank a student a 9 and Microsoft a 2, but to the student it looks like their level of interest is the same. The student could personally prefer Microsoft, but have a low chance of getting matched, whereas if they knew Apple was closer to a sure-shot of having a job, they might be more risk-averse and rank Apple as their most desired over Microsoft.

Re: Investor Day

#74

Post by lpolovets »

zacharycohn wrote: post #62
lpolovets wrote: post #59

Earlier quoted context omitted.

I typically do 1-hour meetings and that works pretty well. 45 min would be okay. I haven't tried 20 min before, but that feels a little short. To apply the over-applied analogy that fundraising is like dating, 20 minutes would be enough time to tell if a date is terrible, but I'm not sure if it's enough time to distinguish between a B date and an A date. Two ideas related to Investor Day that I'd be interested in: -…

Love the "open to experiments!" attitude. I think you nailed it here - 20 minutes is enough to rule someone out. If our original scenario is: Scenario 0: 25 1-hour meetings over the course of a few days. Investments = 25-n You seemed to be suggesting in an earlier comment you might end up with: Scenario 1: 25 20-minute meetings followed by 25 1-hour meetings. Investments = 25-n I think you'll actually end up with: Sc…

Roughly speaking, our investing process is: 1 hour one-on-one meeting, then 1 hour full partner meeting, then decision.

The way I think about the math: Current scenario: 25 1-hour one-on-one meetings -> 10 full-partner meetings -> 2-3 investments.

Worst case for Investor day: 25 20-minute meetings -> still don't have enough info -> 25 1-hour one-on-one meetings -> 10 full partner meetings -> 2-3 investments.

Good case for Investor day: 25 20-minute meetings -> 10 companies don't seem like a fit -> 15 1-hour one-on-one meetings -> 10 full partner meetings -> 2-3 investments.

Best case for Investor day: 25 20-minute meetings -> I get all the info I need -> 10 full partner meetings -> 2-3 investments.

These four cases represent 25, ~33, ~23, and ~8 hours of one-on-one meeting time, respectively.

Re: Investor Day

#75

Post by lpolovets »

tyre wrote: post #64
lpolovets wrote: post #46

Earlier quoted context omitted.

I agree that I can still be methodical after Investor Day. I'm just saying that before, if I was interested in 25 companies after demo day, then I'd do 25 1-hour meetings spread over a few days. With Investor Day -- and without a chance to do much prep/research before each short meeting -- I'm not sure if I'm going to have 25 20-minute meetings and then still have 25 1-hour meetings to follow up, or if it's more like…

In what percentage of 1-hour meetings do you eliminate the company within the first 20 minutes? As a CEO, I've eliminated at least 25% investors in that time period. Given that most meetings start with the company pitch, my guess is 20 minutes would be enough to winnow down the list of hour meetings.

It's hard to say. If it's literally my first exposure to a company, then probably 80% or 90%. But demo days are more complex. I might see 125 companies pitch on stage and try to follow up with 25 of them. So that's 80% eliminated from the demos. For the other 25 companies, I already know a little bit from their pitch and find them interesting, so I'm not sure how many of them I'd be able to eliminate within 20 minutes. My guess is 25%-50% (of the remaining 25), but it's a wild guess.

Re: Investor Day

#76

Post by zippergz »

beambot wrote: post #26

> ...if Investing/General Partner is not present, the slot will be cancelled. These seems to be an attempt to reinforce FOMO to force key people to attend demo day. Resorting to these tactics implies a pretty big perceived power imbalance... Eg. is this a reaction to senior partners sending their underlings because of DDay burnout? If so, this could backfire. The senior partners might just not show up (still), and fo…

It seems to me that this rule is beneficial to the companies, which I think is the right side for YC to err on.

Re: Investor Day

#77

Post by chicagoBears76 »

Is there a signaling issue introduced at all?

1) can investors see that a startup is not at the venue or at a table all morning and get a feel for demand?

2) can investors gather any information from the matching results to get a feel for demand?

3) is there a chance for investors to send false signals by showing their interest in other startups artificially? Vice versa for startups at all (would require collusion so unlikely)

2 and 3 not so much but regarding number one, will physical observation of the meeting space introduce any signaling oppurtinities be it genuine or fraudulent by either party?

Re: Investor Day

#78

Post by cheriot »

"all the companies will be set up at tables to meet with you face to face."

A study on speed dating showed an increased opinion from the person that approaches the other. Intentional?

Re: Investor Day

#79

Post by sandGorgon »

Depending on how this is organized, this can be a spectacularly BAD idea.

Investors would love it because they now have visual confirmation of who all are the "hot" matches. I bet everyone other than the Sequoias would be straining to look at who the hot startups are...and completely ignore the ones in front of them.

For the long tail of a YC batch - the ones that are not hotly contested - this could be a disaster. Previously, investors would be forced to actually look at a startup and decide in isolation. Now they can simply look at the Big VC.

I can completely see why investors would love this.

One might as well make public the interest match list and rank it by order of "likes" received.

People are perfectly capable of driving up and down the Bay Area. Guess what - we get a few free meals and coffees out of it.

EDIT: guess what, you can bring associates to tailgate Sequoia & A16Z investors.

EDIT2: what you guys might be trying to do is be helpful. For example, this lets you force-schedule investor meetings for startups that had no investor interest and term it as "the AI did it!". But I'm not sure if that will be really helpful ... at the cost of drastically reducing FOMO factor for most other startups.

Re: Investor Day

#80

Post by sandGorgon »

chicagoBears76 wrote: post #77

Is there a signaling issue introduced at all? 1) can investors see that a startup is not at the venue or at a table all morning and get a feel for demand? 2) can investors gather any information from the matching results to get a feel for demand? 3) is there a chance for investors to send false signals by showing their interest in other startups artificially? Vice versa for startups at all (would require collusion so…

This is exactly what will happen (re: my comment in this thread). This is a highly investor friendly move and will benefit the top 10 startups of a batch. This will worsen the situation for the long tail.
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