Mar 29, 2017 · 21m · 20vc

20VC: How Investors Can Get Into The Best Y Combinator Startups & How YC Startups Should Choose The Right Investors with Jared Friedman, Partner @ YC

Jared Friedman · 12m spoken Harry Stebbings · 7m spoken

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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The 20 Minute VC, host Harry Stebbings speaks with Y Combinator Partner Jared Friedman about how investors can successfully back top YC startups. Jared shares insights into Demo Day mechanics, advice for VC firms on winning fast-moving deals, YC's Investor Day matching algorithms, and his transition from Scribd co-founder to startup mentor.

Chapters · click to jump

1 statement ▾

Friedman: Being a YC Partner Is Like Being a Founder open →

3 statements ▾

Friedman: Investing Randomly at YC Demo Day Yields Positive Returns open →

Friedman: 98% of YC Startups Are Still Fundraising at Demo Day open →

Friedman: Startups Raising Before Demo Day Perform No Better on Average open →

3 statements ▾

Friedman: YC Demo Day Has 500 Seats for 5,000 Interested Investors open →

Friedman: Traditional Weeks-Long Due Diligence Fails at YC Demo Day open →

Friedman: Monday Partner Meetings Cause VCs to Lose YC Deals open →

2 statements ▾

Friedman: Almost All YC Demo Day Presenters Raise Follow-On Funding open →

Friedman: Targeting Only Top-Tier VCs Is Suboptimal for YC Founders open →

1 statement ▾

Friedman: SF Housing Is a Multi-Billion Dollar Opportunity for Tech open →

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 37.5% of the talking time here. How this is scored →

Harry as informed peer 4.0 Guest teaching 4.0 Guest disagreement 2.2 Harry pushing back 3.2

speaking balance: gold is Harry, purple is the guest (3 minute bins)

Sharpest disagreement ▶ 6:53 Jared dismisses VC rumor about Demo Day

Jared directly rejects Harry's premise that Demo Day is too late for good deals, calling it a persistent rumor and asserting 'I can tell you definitively, that is not true.'

Hardest push from Harry ▶ 6:36 Harry challenges Demo Day deal dynamics

Harry refuses to accept Jared's pitch on Demo Day value, pushing back with feedback from other VCs that seeing companies at Demo Day means it is already too late.

Biggest teaching moment ▶ 7:20 Jared explains founder fundraising strategy

Jared corrects the host's assumption that startups taking early term sheets are the best batch companies, explaining that early funding is random and YC advises founders to wait.

Harry holds his own ▶ 6:36 Harry counters with industry consensus

Harry demonstrates industry knowledge by citing repeated conversations with top VCs who claim the best YC deals close prior to Demo Day.

the scores for every segment, with the reasoning behind each

Topic	Harry as informed peer	Guest teaching	Guest disagreement	Harry pushing back	Why
Jared Friedman's Journey from Scribd Founder to YC Partner	2	3	1	1	Harry asks standard background questions about Jared's transition from Scribd founder to YC partner. Jared explains YC's early days in 2006 and reframes the partner role as being very similar to that of a founder.
Demystifying YC Demo Day and Investment Dynamics	6	6	4	6	Harry challenges Jared by raising a common VC objection that investing at Demo Day is 'simply too late' and that top companies already have term sheets. Jared forcefully refutes this rumor, explaining the mechanics of founder fundraising and why early-funded startups are not inherently superior.
Investor Selection, Ecosystem Etiquette, and Winning Deals	5	5	3	4	Harry brings up market rumors regarding an investor 'blacklist' and specific figures like Jason Calacanis. Jared rejects the term 'blacklist,' clarifying that seat limits and investor behavior determine invitations, before outlining practical advice for VCs to win deals.
Venture Capital Dynamics and Global Startup Accelerators	5	4	2	4	Harry asks about Sam Altman's controversial comments on other accelerators and presses on the scalability of Demo Day. Jared diplomatically praises international accelerators and details YC's algorithmic 'Investor Day' matching system.
Quick Fire Round with Jared Friedman	2	2	1	1	Harry leads a rapid-fire question round covering books, YC seasonality, and personal investments. Jared answers directly and collaboratively without any friction.

Statements from this episode (10)

Opinion

Friedman: Being a YC Partner Is Like Being a Founder

“So, the thing is that Y Combinator is not a typical investment firm, and we don't really think of ourselves as investors. Why Combinator is very much its own beast, and so the job is actually not that different from being a founder.”

Jared Friedman Mar 29, 2017 ▶ 4:23

Assertion Supported

Friedman: Investing Randomly at YC Demo Day Yields Positive Returns

“We have enough data now from Y Combinator over, over the last 11 years to know that if you simply invested randomly in Demo Day companies, You would actually make money over time.”

Jared Friedman Mar 29, 2017 ▶ 6:19

Assertion Not checkable as stated

Friedman: 98% of YC Startups Are Still Fundraising at Demo Day

“Today, a hundred companies will present at demo day, and probably only two or three of them will be done fundraising before. So, 98% of them are still fundraising at demo day and are open to investment for many qualified investors.”

Jared Friedman Mar 29, 2017 ▶ 7:02

Assertion Not checkable as stated

Friedman: Startups Raising Before Demo Day Perform No Better on Average

“In fact, the two or three companies that might have... Finish fundraising before demo day are no better on average than the other companies. It's really quite random which ones choose to fundraise earlier.”

Jared Friedman Mar 29, 2017 ▶ 7:37

Assertion Not checkable as stated

Friedman: YC Demo Day Has 500 Seats for 5,000 Interested Investors

“We only have about 500 physical seats in the auditorium, and we have demand for 10 times that many.”

Jared Friedman Mar 29, 2017 ▶ 8:27

Insight

Friedman: Traditional Weeks-Long Due Diligence Fails at YC Demo Day

“There are many investors who are used to taking their time with due diligence, which might be fine in other circumstances, but it simply doesn't work at demo day because there's so much activity happening. So you just can't take a couple of weeks to think over…”

Jared Friedman Mar 29, 2017 ▶ 9:52

Insight

Friedman: Monday Partner Meetings Cause VCs to Lose YC Deals

“That doesn't work great for demo day because demo day is traditionally on Monday and Tuesday, which means investors are making decisions Wednesday, Thursday, Friday. So if you're a VC and you can't make a decision until the following Monday, there's a decent c…”

Jared Friedman Mar 29, 2017 ▶ 10:33

Assertion Partly supported

Friedman: Almost All YC Demo Day Presenters Raise Follow-On Funding

“In terms of the actual funding results, they're very positive. Almost all the companies you present at Demo Day do raise follow-on funding”

Jared Friedman Mar 29, 2017 ▶ 13:40

Insight

Friedman: Targeting Only Top-Tier VCs Is Suboptimal for YC Founders

“And we found that that is actually suboptimal for them because those firms have a low acceptance rate. And so if you spend all your time meeting with the top five firms and they all pass, then you're sort of stuck.”

Jared Friedman Mar 29, 2017 ▶ 16:27

Disclosure

Friedman: SF Housing Is a Multi-Billion Dollar Opportunity for Tech

“My most recent angel investment is in a YC company called Star City, which is doing local In Star City, one, because I think it's actually a multi-billion dollar opportunity, can make a huge amount of money, but also because I believe that solving the housing …”

Jared Friedman Mar 29, 2017 ▶ 18:36

20VC: How Investors Can Get Into The Best Y Combinator Startups & How YC Startups Should Choose The Right Investors with Jared Friedman, Partner @ YC

How this conversation actually went

Statements from this episode (10)

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