As the number of startups increases, is there a risk that most or all of the investors end up chasing the 10-20 best pitches? While perhaps any single company could hold their own in isolation, it seems like they're fighting the others for attention. It must be fascinating to see the distribution of interest between the investors and companies.
For a while I've worried that will start to happen. So far I haven't seen it. Rationally it shouldn't happen, and the best investors are pretty rational about "deal flow." But I'm still going to keep watch for signs of trouble.
What about before DDay? Do startups within the same batch feel like they're competing against each other, or does everybody manage to get along and help each other out?
So far at least there's not much feeling they're competing against one another. Which is reasonable, because they're really not. Investors don't have limits on how many YC startups they'll fund.
I was somewhat surprised by the lack of actual, you know, demos and the emphasis on streamlined slide shows. Is that common now? It's been a while since I pitched something...
Presentations were so short this cycle that there was no time for demos.
Since everyone asks how we decide how long presentations should be, I'll just answer that now. People can sit for about 55 minutes. Two sessions = 110 minutes. 43 startups presenting means slots are at most 110/43 minutes.
The solution will be to move to 3 sessions. That was inevitable anyway, as the number of startups per cycle increases. It will make DDay as a whole longer, but I think investors will be ok with that, because it is still much more efficient for them than meeting the startups individually.
Any thought of adding follow-up longer form presentations on a later day for doing actual demos for interested investors and startups, maybe in groups of five to ten startups at a time?
Interesting idea, but I don't think there would be time. When investors see startups they like at DDay, they know they have to act fast, because 350 other investors just saw them too. So investors interested in a startup are usually meeting with them in the next couple days.
There are three Demo Day events, each composed of two identical sessions. The only reason we have multiple events is that we don't have enough room for all the investors at once. Though it does have the additional benefit that if someone screws up their presentation, they get other chances.
You can't transform an auditorium into a reception in place, which is what we do to the orange room at YC after the presentations. After the last talk the founders pour in and we scurry about folding up all the chairs, and about 3-4 minutes later the room looks like a (big, loud) cocktail party instead of an auditorium.
Most hotel conference rooms/ballrooms are set up with portable chairs and I don't see why you couldn't do the same thing there, but something seems ineffably worse about that scenario to me. Maybe that with everyone presenting at once to all of the investors, there will end up being fewer total conversations between founders and investors.
It's more the case that that's not investors' biggest worry. Investors are willing to believe (usually correctly) that the kind of people we fund can build things. They worry more whether there's a market for what the startup is building, whether the founders can actually ship, how much money they can make, etc.
Much like the fact that my resume lists a $150,000 piece of paper means you can skip seeing if I can solve "3x + 4 = 19" at a hypothetical job interview, the YC label means that you can confidently say "If they were bozos at product they would not be here, so let's focus on the more important questions."
My initial response was to dislike the idea of presentations all using the same format - it sounded boring and uninspired. But Demo Day is not for the teams but for the investors and I can't imagine being slammed with dozens of interesting ideas all while trying to choose which to invest large sums of money into. The similar presentation formats likely help the investors stay focused on the idea and the team.
I wonder if this "investor friendly" presentation format evolved from the experience of YC doing this year after year. An example of the Y Combinator partner's experience that Paul sometimes refers to...
I wonder if this "investor friendly" presentation format evolved from the experience of YC doing this year after year.
Very much so. We always stand at a point where we can watch both the presentation and the investors watching the presentation, to see how they're reacting to it. And I've probably watched over 700 DDay presentations now. So by this point I can even predict fairly well which jokes they'll laugh at.
With the exception of the slides, how might the presentations differ from a one-on-one pitch where you still might only have the same two-three minutes to convey the same basic info? I would image investors are very busy and would often want brevity regardless of the venue.
One on one pitches are more conversational. So the slides are designed to be something you have a conversation about, not something you simply present.
It's really the short Demo Day type pitches that require the most design. A Demo Day pitch can't leave obvious questions unanswered, because there is no chance for anyone to ask them. A pitch deck for an hour long VC meeting doesn't have to be so watertight, because if investors have questions they can ask them.
I'm curious if this kind of presentation is useful for teams that haven't already been validated with YC backing yet. I imagine this format only works because the investors are already interested in the teams since PG is interested in them. In other words, if somebody were to make a slide deck that followed a similar format (no demo, most focus on team competency) and present it to VC's without YC backing, would it receive the same enthusiastic response?
Has anybody posted a 'YC Demo Day Pitch Deck' online on slideshare or elsewhere? I know most won't want to post it, half the companies didn't even want their product talked about publically. Some must have raised money and gone on far enough that they're welcome to share. Perhaps a class or two ago?
I'm curious: if most of these companies go on to raise rounds by going through the proper channels, why bother focusing on the pitch and not just the demo? It seems to me that if these companies still have to pitch to individual investors anyway, why not use the current iteration of Demo Day as their "Elevator Pitch" deck to investors, and use Demo Day as a real day of demonstrations, the "sneak preview" of things to come to wet the mouths of investors before they hear the real pitch?
