Demo Day

“We do demo day because it's a way that everybody can get a shared understanding of how the product works and what's changing. And also because it encourages people to ship in incremental units that are viewable on a week by week basis. It's not the purpose of …”

“The main thing though, perhaps the more interesting inside story that we keep hearing is that all of the deals are done before demo day. So demo day is just a social party that doesn't matter anymore.”

“There are all these smart people in teams that like follow this like incubatory, listen to your customer, customer research, like iterate, solve a problem for demo day. And what they don't realize is they're signing themselves up for like a decade of working o…”

“Sitting in a room for hours watching pitches of founders that aren't, that don't fit your thesis is a huge waste of time for VCs. They would much rather be on, you know, on the phone having one-on-one calls with people catching up and hearing about a deal thro…”

“It is not the big brand name funds, you know, their GPs are not sitting in that room, nor would you be able to get them there, right? You're gonna be, they're gonna be sending their analysts, their lower tier associate, you know just people who their job is to…”

“A lot of the investment that they get at demo day doesn't actually follow through. I want to say it's something like 10% actually ends up in the bank.”

“I don't go to any more demo days.”

“The trope was always, oh, everyone raises before demo day, which is true, like the best companies absolutely always raise before demo day, and so now we've just set a deadline, like two weeks before demo day, and said, you may start fundraising on that day, tw…”

“They give you a preemptive offer. But the valuation is not as good as you would get by demo day, because that's why they're doing this, right?”

“Because most of our companies at Demo Day are pre-product market fit.”

“We didn't have, we hadn't built a product. We had no users. We had no idea what our business was going to be because we couldn't get anybody to like buy something which doesn't exist. And actually there was quite a way through our, I think it was like two thir…”

“And in demo day, I mean, maybe you two have seen a lot of videos, like it's a lot of, Honestly over-promising and usher delivery, because every startup, you know, says, oh yeah, you know, I'm going to be the next Google or something, and then you appear under …”

“Running a demo day means that you're running a fundraising auction, and everyone knows you're trying to get the highest price for any product, good, or service. You want to run an auction. So YC companies tend to raise at a higher valuation and dilute less.”

“Like setting the aggressive goal, the purpose was to get you to move fast, to get you to go, go, go. Like it was the juice. Like if you learned a bunch pursuing that goal, you got value, even if you didn't accomplish it.”

“Like one, there aren't that many events. You don't have classes all day at YC. Like, you know, we try to take as little time as possible during your week so you can actually get shit done. Two, there's a hard deadline, demo day. And three, I think people are o…”

“He had an impossible time raising money on Demo Day. And so if he had taken the Demo Day signal, the investor's signal of, oh, we don't want to give you money and quit, we don't have Coinbase.”

“A lot of people go, I want to get into YC, I want to get into YC, but they don't realize the negative, very real negative signaling risk, where if you leave YC and you do not raise on demo day, there's like a black mark on you effectively, right?”

“One thing that I was super proud about that I was very passionate about was bringing in the Raiders, So I met with them and I got them to come to like some of our startup schools to like learn how to invest in companies and then also got them to come to our de…”

“Excitement around the core product or feeling like other investors are excited about it and things like that definitely give a founder, like yourself, tons of leverage. But that I actually have learned to not take that too seriously as an investor, as a signal…”

“And that was like six weeks before demo day.”

“And by the time we applied to YC, we had built a business that was getting traction, and 10 weeks later, we raised three and a half million dollars on Demo Day.”

“The most hyped investment on Demo Day is often not the best one. Very, very often. I think what's interesting is that the crowd on Demo Day is just not as smart as it appears”

“Yeah, so it was, like, roughly a month, like, four or five weeks or so, and it had gone from, like, 80 teachers, like, something, like, a few thousand people using it, and we were, like, this has just blown our minds, right?”

“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.”

“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.”

“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.”

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

“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…”

“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…”

“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”

“For our style and stage, so we like to be early, and we tend to be in a first institutional round, or even earlier than that, into a company. When we're meeting them, if we're meeting them for the first time at most of the demo days that one would go to, we're…”

“VCs get great deal flow from each other. They learn to trust each other. This is a, an industry that I, you know, to coin a term from a friend of mine is, is, is, driven by coopetition, and so we're cooperating constantly while we compete, and that means that …”

“Like, you've got one company, and there's no divorce clause from investors, so I really think entrepreneurs need to take the time to get to know their investors, which is why I'm not a big proponent of demo days, or overhyping your company, or Waiting to meet …”

“We only start a week before our demo day at Entrepreneur First actually helping them get the pitches together.”

“I personally, I don't go to demo days. I'm just kind of, I'm, you know, I'm kind of burnt out by them. I think it's a, it's actually it's kind of a shitty way to get to know a founder, you know, is to listen to them pitch on a stage amongst hundreds of other f…”

“So we actually didn't have the startups pitch on stage. We had for each startup a mini stage where they had to pitch five times consecutively and investors in the room had to pick five out of the 10 startups that they really wanted to talk to.”