Key insights

• ⭐ Investors' impact on company direction is rare but significant
• 📉 Most YC companies will fail, around 20-30% raise follow-on funding post demo day
• 💪 Hard work and conviction are key to successful angel investing
• 📅 Invest 6-12 months post-demo day for better valuations and more information
• 💰 Modeling equity dilution in early funding rounds
• 📉 Value of networking and raising large amounts of money is decreasing
• 🌟 YC focuses on having extremely talented people
• 🍀 A-plus investors are humble and acknowledge luck's role in success

Q&A

• How does YC evaluate their success, and what are the qualities of 'A-plus' investors?

  YC evaluates themselves by the impact of their programs and the success of alumni while acknowledging the decreasing value of networking and raising large amounts of money. A-plus investors are humble and recognize the role of luck in their success.

• What is the success rate of YC companies and the impact of investors?

  Most YC companies will fail, but around 20-30% raise follow-on funding post demo day. Investors' impact on company direction is rare but significant, and missing out on investments can be due to hesitation or a focus on helping other companies.

• What are the key factors to consider when investing in startups, particularly related to YC companies?

  Investors need to assess the impact of the investment, be prepared to invest quickly, leverage personal connections, pay attention to post-demo day strategies, and consider investing 6-12 months post-demo day for better valuations and more information.

• How should one decide the check size for startup investments?

  Investors should consider adjusting their check size based on conviction in the startup, especially after assessing the realistic chances of getting a return on angel investments and observing the hype during demo day.

• What are the non-monetary motivations for angel investing highlighted by the speaker?

  The speaker stresses motivations for angel investing beyond monetary gains, including the impact on company direction, the evaluation of startup founders' talent, and the value of angel investors' hard work and conviction.

• What is the importance of YC companies in the speaker's portfolio?

  The speaker emphasizes the significance of Y Combinator (YC) companies in their portfolio, attributing ownership in successful ventures to their involvement with YC.

• 00:00 The speaker discusses their experience with angel investing, emphasizing the non-monetary motivations and realistic outcomes. They highlight the importance of YC companies in their portfolio and the need to write significant investment checks. Despite the speaker's perceived lack of success, they attribute their involvement in YC for ownership in successful ventures.
• 04:32 Investing in startups requires careful consideration of potential returns, swift decision-making, and leveraging personal connections. It's essential to assess the impact of the investment, be prepared to invest quickly, and pay attention to post-demo day strategies.
• 08:46 Invest in startups 6 to 12 months after demo day for better valuations and more information. Hyped investments on demo day may not be the best ones. Consider adjusting check size based on conviction in the startup.
• 13:34 Investors can have a big impact on a company's direction but it's rare. Most YC companies will fail, but around 20-30% raise follow-on funding post demo day. Missing out on investments can be due to being on the fence or being busy and focused on helping other companies. Hard work and conviction are key to successful angel investing. Party rounds don't scare investors if the equity splits are fair and the investors sign paperwork quickly.
• 18:33 Founders' equity should be carefully considered in early-stage funding rounds, large companies may not be better at identifying startup talent, and the process of funding startups requires confidence and a balanced approach to decision-making.
• 24:03 The value of networking and raising large amounts of money is decreasing. YC focuses on having extremely talented people. They evaluate themselves by the impact of their programs and the success of alumni. A-plus investors are humble and acknowledge the role of luck in their success.