As an investor, I think this will accomplish a few things:
1) A lot of scheduling friction will disappear. The week just after demo day is usually crazy because hundreds of founders and investors are all trying to schedule meetings with each other, and there are inevitable race conditions that lead to a lot of rescheduling and wasted time. (E.g. I email three founders with 5 possible time slots, and they all reply and ask for the same time slot.)
2) I think this will be great for investors who act quickly and go by their gut. There are plenty of investors out there -- especially those who write smaller checks -- for whom 20 minutes will be enough time to make a quick decision.
3) I'm not sure if this will be great for investors like me that approach investing more methodically rather than with their gut.* I love 1-hour meetings because that's plenty of time for both sides to dig in and learn a lot about each other. Twenty minutes feels very short to me, and I'm not sure if a 20-minute meeting is more likely to save me and the founder from an unnecessary 1-hour meeting, or if I end up having just as many 1-hour meeting -- but now with an extra 20 minutes tacked on.
That said, I don't want to judge this process before I try it at least once, and I'm looking forward to trying it out in August.
* FWIW, there are great gut-based investors and great methodical investors, and I'm not implying either approach is better.
I am an investor and my experience is, if you have done enough homework about the startup you want to meet, twenty minutes shall be long enough to clarify a few key things so you can make an informed decision.
I think you'll still be able to be methodical afterwards via direct communication over emails/calls to the startups, just as you used to before. Unless this Tinder-style app removes all the contact info you'd normally receive, you should be able to take it slow if you want.
20 minutes is a good amount of time to determine if you like the Founders or not, but I agree that you probably want to do more digging. Would love to see YC post a "post mortem" about how all of this went.
> ...if Investing/General Partner is not present, the slot will be cancelled.
These seems to be an attempt to reinforce FOMO to force key people to attend demo day. Resorting to these tactics implies a pretty big perceived power imbalance... Eg. is this a reaction to senior partners sending their underlings because of DDay burnout? If so, this could backfire. The senior partners might just not show up (still), and force founders to attend offsite meetings later anyway (in addition to the new DDay meetings). In other words: This might just be a net increase in founder effort without changing the investor-founder DDay dynamic. After all: What do the senior partners gain / lose by this new situation? Not much (aside from FOMO), I'd guess. But the best investors will always be in demand anyway -- whether they attend DDay or not.
Seems like a well-reasoned hypothesis and contributes to the overall discussion. Has HN become that critical of different opinions that downvotes are used to punish dissent rather than using upvotes to indicate agreement?
Are investors weighted by their fund's size? Or are founders told the ranking they were given by each interested investor?
I can imagine many firms go into demo day with the resources and willingness to fund 10-20 ventures, whereas others are looking for only one or two.
I would much rather be the fifth choice of the former than third choice of the latter. If I knew my position in the stack I could figure it out for myself, or it could be calculated for me if YC is trying to avoid the negative consequences of making that transparent.
Investors are not weighted by their fund's size - they are ranked by the founders individually. Founders would be able to apply your stated preference for meeting with larger funds or with known high frequency investors, if they were so inclined.
Depending on how this is organized, this can be a spectacularly BAD idea.
Investors would love it because they now have visual confirmation of who all are the "hot" matches. I bet everyone other than the Sequoias would be straining to look at who the hot startups are...and completely ignore the ones in front of them.
For the long tail of a YC batch - the ones that are not hotly contested - this could be a disaster. Previously, investors would be forced to actually look at a startup and decide in isolation. Now they can simply look at the Big VC.
I can completely see why investors would love this.
One might as well make public the interest match list and rank it by order of "likes" received.
People are perfectly capable of driving up and down the Bay Area. Guess what - we get a few free meals and coffees out of it.
EDIT: guess what, you can bring associates to tailgate Sequoia & A16Z investors.
EDIT2: what you guys might be trying to do is be helpful. For example, this lets you force-schedule investor meetings for startups that had no investor interest and term it as "the AI did it!". But I'm not sure if that will be really helpful ... at the cost of drastically reducing FOMO factor for most other startups.
1) can investors see that a startup is not at the venue or at a table all morning and get a feel for demand?
2) can investors gather any information from the matching results to get a feel for demand?
3) is there a chance for investors to send false signals by showing their interest in other startups artificially? Vice versa for startups at all (would require collusion so unlikely)
2 and 3 not so much but regarding number one, will physical observation of the meeting space introduce any signaling oppurtinities be it genuine or fraudulent by either party?
This is exactly what will happen (re: my comment in this thread). This is a highly investor friendly move and will benefit the top 10 startups of a batch. This will worsen the situation for the long tail.
Seems like a solid idea. I honestly thought something like this was already in place so it makes sense. Still though the first thing I thought of is what it might feel like to be part of the statistic few who get zero investors clicking the button (I mean statistically this should happen at least a couple of times due to the batch size, right? Or am I severely underestimating the amount of investors that attempts do demo day?)
Not every YC company will successfully raise money, but I suspect all of them will at least have a few people interested enough to take a 20 minute meeting.
This is great, it would have saved us (GitLab) a lot of driving around. It is one of those idea's that are very obvious in hindsight but for sure I didn't think of it.
The stable marriage problem has two natural algorithms that produce a stable matching: one algorithm give priority to women's choices and one gives priority to men's choices.
If the algorithm used by yc to produce the matching for each slot is based on these, which algorithm is used? The one that gives priority to women's choices or to men's choices? A variation that doesn't give priority to any gender choices?
The stable marriage problem has two natural algorithms that produce a stable matching: one algorithm give priority to women's choices and one gives priority to men's choices.
This is true under two conditions: 1. Marriages are heterosexual; and 2. Marriages are monogamous.
While startup/VC relationships are heterosexual (err, heterofinancial?), they are absolutely not monogamous, so the analogy to the stable matching algorithm already fails.
The logical optimization target for YC is the total valuation of their companies, which probably means whatever approach creates the most competition among investors.
Which is an absolutely awful system, for a multitude of reasons.
One of the biggest faults that looks like it might be replicated here (the article does not specify) is that once employers (VCs) rank students (startups), the students can't see the numerical ranking they were given.
For example, if I'm a student who was ranked by several companies, I cannot see the numerical ranking they gave me. This introduces a significant bias against students for no apparent reason; employers do not lose out if we can see how they ranked us.
This is one of the reasons that UWaterloo as a school is hugely overrated (although the students are generally as good as they are hyped up to be).
> Using both these ranked inputs, our software will create “Investor Day” schedules for each investor and each startup, which will take place at the Computer History Museum on Wednesday 8/24.
Sounds like the backend of a dating site for startups and investors.
This is almost exactly how some law schools run their on-campus interviewing process (except the bit about actual decision-makers being required to attend). From what I've observed, it works really well. Pre-screening for at least some level of mutual interest can save everyone a lot of time.
From the way they've set this up, it appears to be optimal for investors and pessimal for founders. Anyone else notice the same or disagree? It's in the proof for a particular theorem.
I disagree and believe this should be better for founders. Demo Day works so well because it's a forcing function for getting a lot of investors to see you at once and make a decision quickly, because so many other investors are deciding at the same time. Typically, investors want a long time to consider a company, and they only move fast if someone is / might bid against them. Scheduling meetings post-Demo Day is tough, and most people do it sub-optimally (by scheduling them too far apart). This new system makes meetings happen faster and more per day, increasing a chance of getting a bite quickly, which should lead to a higher chance of closing the round.
The downside I see is that if you are bad at meeting investors / need to iterate on your pitch, these meetings won't allow you to do that, as they'll be over before you can rethink it. But I think it's generally worth more / faster meetings.
*As another investor pointed out, 20 minute meetings may also be too short. I am not sure what the optimal meeting length should be. 30 minutes might be better. 1 hour is probably too long (you can always schedule a follow up meeting).
The way the algorithm is written actually balances out the preferences of both groups. Investors and founders will each get to meet with their counterparts based on a ranking they supply.
What makes you say that? This seems to me like a great idea that gives startup founders a quick pitch and an instant response from potential investors. It's almost like a match.com or Tinder for startups/investors.
lpolovets|9 years ago
1) A lot of scheduling friction will disappear. The week just after demo day is usually crazy because hundreds of founders and investors are all trying to schedule meetings with each other, and there are inevitable race conditions that lead to a lot of rescheduling and wasted time. (E.g. I email three founders with 5 possible time slots, and they all reply and ask for the same time slot.)
2) I think this will be great for investors who act quickly and go by their gut. There are plenty of investors out there -- especially those who write smaller checks -- for whom 20 minutes will be enough time to make a quick decision.
3) I'm not sure if this will be great for investors like me that approach investing more methodically rather than with their gut.* I love 1-hour meetings because that's plenty of time for both sides to dig in and learn a lot about each other. Twenty minutes feels very short to me, and I'm not sure if a 20-minute meeting is more likely to save me and the founder from an unnecessary 1-hour meeting, or if I end up having just as many 1-hour meeting -- but now with an extra 20 minutes tacked on.
That said, I don't want to judge this process before I try it at least once, and I'm looking forward to trying it out in August.
* FWIW, there are great gut-based investors and great methodical investors, and I'm not implying either approach is better.
zillionize|9 years ago
timdorr|9 years ago
afarrell|9 years ago
I've found https://calendly.com/ super useful for eliminating race conditions in scheduling, especially across time zones.
josh_carterPDX|9 years ago
beambot|9 years ago
These seems to be an attempt to reinforce FOMO to force key people to attend demo day. Resorting to these tactics implies a pretty big perceived power imbalance... Eg. is this a reaction to senior partners sending their underlings because of DDay burnout? If so, this could backfire. The senior partners might just not show up (still), and force founders to attend offsite meetings later anyway (in addition to the new DDay meetings). In other words: This might just be a net increase in founder effort without changing the investor-founder DDay dynamic. After all: What do the senior partners gain / lose by this new situation? Not much (aside from FOMO), I'd guess. But the best investors will always be in demand anyway -- whether they attend DDay or not.
snowmaker|9 years ago
We are relaxing this restriction and allowing partners to bring associates to Investor Day, but only if they come themselves.
zippergz|9 years ago
beambot|9 years ago
Seems like a well-reasoned hypothesis and contributes to the overall discussion. Has HN become that critical of different opinions that downvotes are used to punish dissent rather than using upvotes to indicate agreement?
DelaneyM|9 years ago
I can imagine many firms go into demo day with the resources and willingness to fund 10-20 ventures, whereas others are looking for only one or two.
I would much rather be the fifth choice of the former than third choice of the latter. If I knew my position in the stack I could figure it out for myself, or it could be calculated for me if YC is trying to avoid the negative consequences of making that transparent.
Finbarr|9 years ago
skrebbel|9 years ago
sachinag|9 years ago
narsil|9 years ago
Finbarr|9 years ago
nickparker|9 years ago
sappapp|9 years ago
This algorithm is outlined by the stable marriage problem for those that are interested.
sandGorgon|9 years ago
Investors would love it because they now have visual confirmation of who all are the "hot" matches. I bet everyone other than the Sequoias would be straining to look at who the hot startups are...and completely ignore the ones in front of them.
For the long tail of a YC batch - the ones that are not hotly contested - this could be a disaster. Previously, investors would be forced to actually look at a startup and decide in isolation. Now they can simply look at the Big VC.
I can completely see why investors would love this.
One might as well make public the interest match list and rank it by order of "likes" received.
People are perfectly capable of driving up and down the Bay Area. Guess what - we get a few free meals and coffees out of it.
EDIT: guess what, you can bring associates to tailgate Sequoia & A16Z investors.
EDIT2: what you guys might be trying to do is be helpful. For example, this lets you force-schedule investor meetings for startups that had no investor interest and term it as "the AI did it!". But I'm not sure if that will be really helpful ... at the cost of drastically reducing FOMO factor for most other startups.
steve_taylor|9 years ago
chicagoBears76|9 years ago
1) can investors see that a startup is not at the venue or at a table all morning and get a feel for demand?
2) can investors gather any information from the matching results to get a feel for demand?
3) is there a chance for investors to send false signals by showing their interest in other startups artificially? Vice versa for startups at all (would require collusion so unlikely)
2 and 3 not so much but regarding number one, will physical observation of the meeting space introduce any signaling oppurtinities be it genuine or fraudulent by either party?
sandGorgon|9 years ago
Finbarr|9 years ago
1) There are way more investors than startups and we anticipate a busy day for everyone based on past data. 2) Not the demand for a company. 3) No.
BinaryIdiot|9 years ago
pc86|9 years ago
Finbarr|9 years ago
morgante|9 years ago
tdstein|9 years ago
loceng|9 years ago
sytse|9 years ago
jknz|9 years ago
If the algorithm used by yc to produce the matching for each slot is based on these, which algorithm is used? The one that gives priority to women's choices or to men's choices? A variation that doesn't give priority to any gender choices?
cperciva|9 years ago
This is true under two conditions: 1. Marriages are heterosexual; and 2. Marriages are monogamous.
While startup/VC relationships are heterosexual (err, heterofinancial?), they are absolutely not monogamous, so the analogy to the stable matching algorithm already fails.
shimon|9 years ago
https://en.wikipedia.org/wiki/Stable_marriage_problem
The logical optimization target for YC is the total valuation of their companies, which probably means whatever approach creates the most competition among investors.
Edit: more active discussion on this topic at https://news.ycombinator.com/item?id=12051218
wrsh07|9 years ago
canistr|9 years ago
udba|9 years ago
One of the biggest faults that looks like it might be replicated here (the article does not specify) is that once employers (VCs) rank students (startups), the students can't see the numerical ranking they were given.
For example, if I'm a student who was ranked by several companies, I cannot see the numerical ranking they gave me. This introduces a significant bias against students for no apparent reason; employers do not lose out if we can see how they ranked us.
This is one of the reasons that UWaterloo as a school is hugely overrated (although the students are generally as good as they are hyped up to be).
koolba|9 years ago
Sounds like the backend of a dating site for startups and investors.
emagdnim2100|9 years ago
RCortex|9 years ago
mpenn|9 years ago
The downside I see is that if you are bad at meeting investors / need to iterate on your pitch, these meetings won't allow you to do that, as they'll be over before you can rethink it. But I think it's generally worth more / faster meetings.
*As another investor pointed out, 20 minute meetings may also be too short. I am not sure what the optimal meeting length should be. 30 minutes might be better. 1 hour is probably too long (you can always schedule a follow up meeting).
Finbarr|9 years ago
unknown|9 years ago
[deleted]
dkonofalski|9 years ago
etjossem|9 years ago
cheriot|9 years ago
A study on speed dating showed an increased opinion from the person that approaches the other. Intentional?
xarien|9 years ago
free2rhyme214|9 years ago
idlewords|9 years ago
chollida1|9 years ago
Did you even win the Putnam, if not then please don't be bolder than the parent poster.
dang|9 years ago
cperciva|9 years ago