SANJAY SAYS
My Best Startup Investment: A Peek Inside Y-Combinator
Dumb luck can be an investment strategy
Sometimes rich people make a lot of money on an investment and go around telling everyone they’re great investors.
Not me.
I’m a terrible investor, but when you invest early in private companies, it’s a lot easier to get lucky.
Back in 2015 I was making a lot of trips to San Francisco, getting excited about Venture Capital, because that’s all anybody down there ever talks about. I was about to sell my company, Audiobooks.com, and VC was what I wanted to get into next.
Many of the primo tech startups in Silicon Valley go through training programs, often run by investment funds. These are called startup accelerators, and the most famous one is Y-Combinator. You know Sam Altman, the guy who may or may not be the CEO of Open AI… he used to run Y-Combinator. It’s kind of a big deal.
Every few months, YC holds what’s known as a demo day. Over two days, a gazillion companies spend literally 1 minute each presenting themselves, and afterwards you get to meet them in an adjacent conference room, shake hands and agree to fork over $25k to $1mm or more, at a ridiculously high valuation, to get a tiny piece of their pie.
