
Investor Day - dshankar
https://blog.ycombinator.com/investor-day
======
lpolovets
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.

~~~
zillionize
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.

~~~
lpolovets
I personally like asking a lot of questions, so I'd still prefer >20 minutes.
I 100% agree with you though that preparation can save a lot of meeting time.
One catch with YC companies in my experience is that they rarely have detailed
pitch decks or significant web presences, so there's often not that much to
research before a meeting.

~~~
zillionize
Did you check out The Macro - [http://themacro.com/](http://themacro.com/) ?
Yes the info disclosed by YC for each startup is still limited but better than
nothing in the before.

~~~
lpolovets
Definitely helpful, but AFAIK only about a dozen startups from the 100+
startup batch have been covered so far
([https://www.google.com/#q=%22meet+the+batch+s16%22+inurl:the...](https://www.google.com/#q=%22meet+the+batch+s16%22+inurl:themacro.com%2Farticles)).
I can imagine the coverage will double or triple by demo day, but I'm
skeptical that all startups will be covered. Btw, I love the /data subsection
of your website!

------
beambot
> ...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.

~~~
beambot
Why the downvotes?

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?

~~~
elmar
Who cares about downvotes! just enter the "Aspergian mindset" and write what
you think is right.

If you are looking for social feedback you will never get far on startups.

~~~
Kinnard
Well, users are social feedback . . .

------
DelaneyM
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.

~~~
Finbarr
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.

~~~
DelaneyM
Without knowing how one ranks, though, it's substantially harder to
prioritize.

This doesn't hurt the big funds so much as it does the small ones. If I were
an eCommerce or Logistics company, for example, there are a subset of niche
funds which would be great strategic investors; but knowing they're only going
to invest in one or two ventures would leave me disinclined to prioritize them
when high-frequency investors are in the mix.

I don't want to kvetch here, it's a _much_ better system than the current
free-for-all. But since investors already get the first-mover advantage, it
would be nice if entrepreneurs had more complete information.

To carry the theme of relationship analogues in this thread: knowing who's
interested in me is great, but I'd rather be someone's dream girl than a
fallback or fling.

~~~
Finbarr
We do have a lot of context on investors that can help founders when choosing
who to meet with. In addition, we're going to let investors specify a reason
why they want to meet with each company (optionally). This should give less
well known investors who are highly suited to particular companies a chance to
get noticed.

~~~
DelaneyM
> we're going to let investors specify a reason why they want to meet with
> each company (optionally).

Even better! You guys have really thought this through. :)

------
skrebbel
I really like that they cancel slots when no partners of the VC firm are
present.

------
sachinag
I assume this is using the same or similar algorithm as the NRMP algorithm
uses for U.S. residency match day?

~~~
narsil
Yeah, the Stable Marriage problem provides a solution for matching these
ordered preferences between two sets of people/elements:
[https://en.wikipedia.org/wiki/Stable_marriage_problem](https://en.wikipedia.org/wiki/Stable_marriage_problem)

------
sandGorgon
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.

~~~
steve_taylor
I don't see anything in the description that allows investors to see an
aggregated ranking of YC startups.

~~~
sandGorgon
I said - it might as well be that. They can physically do that now (using
their associates,etc) by checking out the marquee VC activity in the room.

Even if these were individual rooms, you would have significant tailgating
behavior.

People don't realize this, but the most popular question of demo day is "who
else is investing in you"

While earlier every deal was always evaluated in isolation.

------
chicagoBears76
Is there a signaling issue introduced at all?

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
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.

------
BinaryIdiot
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?)

~~~
pc86
If you can't get a single investor to give you 20 minutes after Demo Day
you've got much bigger problems.

~~~
ryanSrich
A few years ago sure, but 2016 has been pretty brutal for seed and series A. I
imagine a small percentage of great companies will lose out as a result of a
cold funding climate.

~~~
argonaut
Seed is roughly the same as it's always been. Even if a lot of VC firms are
retrenching, there are still tons of angel investors and seed funds out there
casting wide nets.

Series A, definitely.

------
loceng
This is extremely valuable data for YC to capture for themselves. I wonder how
they might use it other than for a match-making algorithm..

------
sytse
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.

------
jknz
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?

~~~
cperciva
_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.

------
canistr
Reminds me a lot of Waterloo's co-op matching system, Jobmine.

~~~
udba
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).

~~~
emmett
Why is sharing the rating with students so critical? I can see why people
would be curious, but I'm not sure why it matters so much?

~~~
lihorne
Because students don't know how much a company wants them, and so cannot set
their ranking with that knowledge in mind. For example, Apple could rank a
student a 9 and Microsoft a 2, but to the student it looks like their level of
interest is the same. The student could personally prefer Microsoft, but have
a low chance of getting matched, whereas if they knew Apple was closer to a
sure-shot of having a job, they might be more risk-averse and rank Apple as
their most desired over Microsoft.

~~~
emmett
I still don't see how on average it's worse for students. It might be worse
for student A who would have applied to MS knowing a higher chance of getting
in, but that's then probably worse for student B who genuinely wants to work
at MS and doesn't get the slot that A took.

Isn't it better if everyone expresses their true preferences and then we do
the best matching we can on that basis, rather than having students attempt to
game the system in response to company ratings? Your description makes the
system sound close to optimal to me.

------
koolba
> 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.

------
emagdnim2100
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.

------
RCortex
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.

~~~
mpenn
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).

------
cheriot
"all the companies will be set up at tables to meet with you face to face."

A study on speed dating showed an increased opinion from the person that
approaches the other. Intentional?

------
xarien
If you're interested, please swipe to the right...

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free2rhyme214
This is cool. Good to see YC improving.

------
idlewords
This is so romantic!

------
chollida1
I don't know, your answer very wrong to me. What do you even know about math.

Did you even win the Putnam, if not then please don't be bolder than the
parent poster.

~~~
dang
We detached this subthread from
[https://news.ycombinator.com/item?id=12051967](https://news.ycombinator.com/item?id=12051967)
and marked it off-topic.

