What It’s Like to do YC Demo Day as a VC then as an Entrepreneur

Last year I participated in Y Combinator Demo Day as a VC. This year I’m participating as part of “the batch”.

Demo Day was — and generally is — a dizzying array of up-and-to-the-right growth charts and polished pitches that sound too good to be true.

As a VC, I focused on the presentations while trying to decipher the content.

Was that GMV or Revenue?

Great growth, but why didn’t they mention churn?

But wait… what does that product actually … do?

I only have two minutes of a founder on stage, a seven or eight slide deck with size 45 font, a little Googling, and if I’m lucky, some back-channeling to decide whether to initiate a conversation or invest.

I dissect their delivery, and pick apart their presentations. I go in with a default mode of skepticism. As I should.

But being in the batch this year made me realize that I was focused on the wrong things.

If early stage investing is all about the team (as essentially every seed stage investor will say it is), and if “grit” is one of the most important traits in a successful founder, then I now see that nearly everyone whom I’ve gotten to know this summer has it.

My batch-mates have done a combination of the following this summer:

  • Temporarily left their families, their countries and their jobs for this opportunity
  • Drove insane growth despite uncertain markets
  • Are knowingly tackling a problem that’s been tried multiple times before. And doing it better than the competition.
  • Are inventing a completely new solution to an intractable problem
  • Don’t pay themselves a salary
  • Get sh*t on by the YC partners weekly, publicly, (though usually in a constructive way).
  • Make changes to their product. Rinse and repeat.
  • Get told the sage advice to “grow more”. And deliver.

Obviously this is just a small subset of the challenges they faced.

During the summer many companies continued an already steep upward trajectory. Those teams will likely do great.

But the most interesting ones were those who stumbled. Who had to get their first sale. Who had to change a core part of their product mid-summer.

So now, when I see a big dip in June sales revenue on their growth chart, my first thought isn’t, “What happened in June?” It’s now, “What did you learn in July?”

Now when I hear a heavy accent or a terrible delivery, I don’t consciously or (I hope, unconsciously) discount their communication or leadership ability.

I think about the courage it takes to speak to 500 people in your second or third language. Or the willpower it takes to train yourself to be an extrovert in 3 months while being an extreme introvert.

It’s not about discounting their performance; It’s about giving due credit for overcoming more adversity than the rest of us. And recognizing that if they can do that, then they can probably recruit engineers. Or figure out a product feature.

Last year the most common question(s) I asked was, stupidly, “How much are you raising, at what cap, and how much have you raised?”

What I should’ve asked was, “Tell me in detail what was your toughest challenge this summer, and what was your approach to solving it?”

As a VC I used to think that helping founders on pitching was a big part— perhaps even majority — of the value that YC gives entrepreneurs. After all, the idea is to raise a bunch of money by telling a great story.

The reality is much different.

The first thing the partners say within the first hour of the first dinner upon entering the batch was:

If you build a great company, the pitch will write itself. So spend this summer building a great company, and don’t worry about the pitch.

Which is what most companies do. We spend about two or three days cramming pitch practice, because we’re too busy the rest of the summer to think about the pitch.

I certainly have my favorite companies in the batch, but I will not list them here. I also know that like most start-ups, many will die.

But if any investors are reading this, I hope that collectively you get a chance to meet every single one of my batchmates and hopefully as many as possible. They’ve inspired me this summer, and I look forward to one day investing in their companies.

That said, I do want to recognize the four high growth / high-impact non-profits in this batch.

  • Dev/Color — Helping Black engineers thrive and succeed in Silicon Valley. Donate here.
  • Women Who Code — A community, platform, and job board for female engineers. Donate here.
  • New Incentives — Efficiently saving infant and mothers’ lives in Africa by giving money to women to give birth in health clinics rather than at home. Donate here.
  • Vote.org — Helping register millions of unregistered voters this election season using the highest ROI method possible: text messages. Donate here.

Take some time to get to know them as well, because they’re solving problems that you probably already care a lot about.

Yesterday was Alumni Demo Day. The energy was palpable, and I and my batchmates are all deeply grateful for the support the alums gave us. I already can’t wait to come back as an alum to see and cheer on future batches.

I wish my batchmates all the best today and tomorrow. I know you’ll do great whether this week or in the future.

Because last year I was deeply cynical. This year, I am profoundly optimistic. 攀攀