The Wisdom Wall

“If you need a designer to build a slide deck, you're doing it wrong. And here's an even deeper, more important point. Your designer has no idea what the most interesting and important points of your pitch are. So if you hand them your pitch to design, they will emphasize the wrong things.”

“An A investor gives you money, signs paperwork when you want them to, and shuts the fuck up. That's an A. There's a lot of room below an A. There's not a lot of room above.”

“you need two different answers to what do you do. One that you give investors, and another one you give customers, and they're different. The words on the front page of your website are for customers. If you're using that for investors, more often than not, you're doing it wrong.”

“Your goal should be 80% accurate, a hundred percent clear, not a hundred percent accurate, 50% clear.”

“what most people don't realize about investors is that you're not really convincing an investor to invest. They're convincing themselves to invest. The more they can talk, the more they can talk themselves into giving you money.”

“the vast majority of the best investors have invested in whole dozens of companies you've never heard of, um, who've died. And so it turns out that, um, because you raise a check from a famous name, or because you're able to raise a lot of money, almost has nothing to do with whether or not you have a good product, or…”

“When success happens, it's gonna punch you in the face. And you're not going to, um, be able to confuse it for anything else. If you're not getting punched in the space with traction, you're not succeeding, and you don't need all those people.”

“Usually our guidelines for B to B companies is trying to be in the 150 to 250 K a month range. Um, that, and close to profitable. That puts you typically in the maximum leverage category, which significantly increases the chance that going out and raising a series A will result in a series A.”

“Talking about who you will hire on the ask slide. Nobody cares who you will hire. They care what you're going to do with the money, and more specifically, what revenue milestones you're going to hit, or what usage milestones you're going to hit with the money.”

“around that size, um, the primary job of a CEO has to start switching to management. And usually for a pre-product market fit company, the primary job of the CEO should be to focus on product market fit.”

“We've seen a long history of YC companies be very successful in selling to startups initially. If they're selling key components that if they work, they will not be ripped out. If your payment system works, you're not going to rip it out.”

“There's only one skill that an investor can iterate and improve on in the short term. It's hard to know whether you're a good investor for years, but it's easy to know whether you're good at this very quickly. And that skill is closing.”

“an early stage pre-product market fit company should be trying to minimize their non-essential employees, and you should not believe you're great at hiring, which means, unfortunately, you're probably gonna have to do a lot of firing.”

“if someone is not an essential employee within three months, that's often a great sign that you didn't make a good hiring decision.”

“I think the funniest thing that happens in startups is success hurts more than failure. Um, because success comes with all these expectations.”

“A lot of people think that they need to bring a bunch of energy and pizzazz and sizzle and shark tankiness to a pitch. You don't. You actually stand out by being concise and easy to understand.”

“You need to be able to say what your company does in two sentences, and you need to be able to give a specific example.”

“If you can weave how you've experienced the problem into the team slide, suddenly I think of you as an expert.”

“There is no opportunity in your pitch to tell your life story unless the investor asks explicitly for your life story, and you should double confirm they want to hear your life story.”

“What investors are looking for is momentum. They're looking, do you get things done quickly? They're not necessarily looking for, do you have a ton of revenue or a ton of users? If they're investing in an early stage company, they know that you might not have those things, and they'll still invest. If you communicate,…”

“The biggest mistake YC founders make here is they say this list of things, and they didn't tell me do they do it in a month, or four months, or a year, or two years. Without the time, I'm not impressed.”

“Putting a bad traction slide is worse than having no traction slide at all.”

“you only get the right to do this if I know what your company does and if I'm impressed with your team. A lot of founders try to skip to this point And if I don't know what your company does, I can't tell whether your insights good or not.”

“If you were to survey, 50% of the people in this room or greater would agree with the thing that you're saying when you say it. It's not unique.”

“The reality is how you calculate the number is what's important. As an investor, I don't know how many potential users you might be able to get. You have to educate me about that. You should do that research. I don't know how much you're going to charge the users, and I don't know why you're going to charge them that…”

“I think that it's on the order of 70%, where the pitch is done, the founder asks if there are any questions, Investor says no. The meeting ends. No money was ever asked for.”

“A lot of people think that an investor is going to sit down for a 30 minute meeting and give them 30 minutes of their time. It's not true. Especially on Zoom, it's very not true. You earn every two minutes of that meeting. If the last two minutes sucked, that investor's checking their email.”

“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.”

“you are the biggest expert in your company. Don't let an investor convince you that you're further along than you are.”

“if you create the expectation inside of your company that you have product market fit with your employees and you don't grow, your employees start asking questions. And you really set yourself up to not be able to answer them well. So you want employees who are excited to help you find product market fit, not employees…”

“if we really look at a lot of YC companies nowadays, we have a ton of B to B companies, and the most common mistake they make is they don't really understand if they can afford the process they need to do to acquire customers.”

“The disadvantage that some people don't realize is that if you're selling to a larger company, you're often selling into an executive. And you don't know what their power, what their budget, what their decision making ability is inside of the company.”

“Once you are successful to any degree, there is a large amount of advice and help that people will be willing to give you for free. Um, I've experienced this twice in my startups, and I see it every day with YC startups. So, someone doesn't have to be on your cap table to help you.”

“when you're transparent with your employees, they will actually rally to the cause, even when it looks like you're in your darkest hour. When you're not transparent with your employees, um, they're not gonna rally, unfortunately, and they're probably gonna be pretty vindictive.”

“great startups have a system to have hard conversations. Um, bad startups either bottle it in or get into constant fights.”

“I think that most of them fail not because their hypothesis or thesis was wrong. Um, I think most of them fail because either their timing was slightly off, or because of some of these problems, they didn't have time to iterate their products so that they can find the real solution to the problem that they're trying to…”

“any founder you talk to can remember every single investor who said no to them. And they hold a special kind of, I don't want to use the word hatred, but they hold a special something for those people, um, and they desire to prove them wrong.”

“one of the things that founders don't understand is that if I don't know what your company does, I can't fund you. The number one barrier to not knowing what your company does is you.”