Startup Experts Share Their Investor Horror Stories

For this latest episode of Office Hours, the Group Partners are sharing stories from their worst investor meetings. We’ll outline some of the weird plays we’ve seen investors try to pull - but we’ll also confess times that we, as founders, bungled meetings we could’ve nailed.
We’ll discuss what differentiates a truly great investor, and shed a bit of light on something we rarely talk about publicly: the YC Investor Database.
Apply to Y Combinator: yc.link/OfficeHours-apply
Work at a startup: yc.link/OfficeHours-jobs
Chapters (Powered by bit.ly/chapterme-yc) -
00:00 - Coming Up
00:37 - Keeping Founders Waiting
02:23 - Status Games
05:16 - Advice For YC Founders
06:37 - Investors Leverage Before and After YC
07:46 - Have A Game Plan
11:31 - Who Is A Good Investor?
13:53 - Investor Updates
14:34 - Investor Known For Testing Founders
16:09 - Investor Meeting Is A Two-Way Street
16:44 - Who Is The CEO?
18:51 - Awkward Question Crossing Personal Line
20:58 - Worst Investor Meeting: Why You Are Doing A Company Anymore
22:36 - Being Professional
23:53 - Being Smart vs Adjusting Pitch Based On Investor Feedback
25:27 - Outro

[@ycombinator]

What happened in your worst investor meeting?

[@thetrends5670]

It never happened.

[@bibinvmohan]

Asked 70% of the company for their investment. He was not actually a professional investor but a business man.

[@o.h.w.6638]

I love that we have all our hardware ready and investors first respond is “why don’t you completely change your entire strategy!” 😂

[@Anon48657]

simply VC made up his mind before the meeting and was not interested. Totally fine, but than just decline the meeting before. Worst meeting ever because tine waste from both sides. the same investor also rescheduled the call 10x haha

[@KirillZubovsky]

An investor started the meeting by asking me what my top-3 picks from my batch were, and if I thought Zapier was any good ... I don't think it lasted very long. His big mahogany desk and lack of lights in the space was kind of disturbing.

[@Islandvybz96]

@ 20:00 it’s not an inappropriate question to ask imo, founders who are couples, typically husband and wife founders tend to have more chemistry but have low success rates.

[@jsfnnyc]

Talk to customers 1000x more than to investors.

[@ycombinator]

Bingo

[@george_davituri]

yep, and investors will find you on it's own

[@hassansabra9392]

For the founder of Algolia, i think it's kind of normal to ask whether the co founders are dating. Because it might be that their assumption was out of goodwill, and in that investors experience, power couples start and grow startups together.

[@RA-xx4mz]

It makes sense to ask if founders are in a relationship. 🤷‍♀️

[@cherubin7th]

Yes, what if they break up and the business dies because of that.

[@novigod]

Agree!

[@AkireMaru]

Absolutely. And by her answer to the question…they maybe were dating. Obviously heterosexual male/female cofounder teams will get this question more. But our society is so uptight you can’t ask any real questions…

[@mysportisyourpunishment73188]

Exactly 💯

[@kade00]

Not in the first meeting, definitely not as a first question. Female founders already have to go thru a lot, being auto marked as ‘the CXO’s girlfriend’ isn’t good

[@tajtahmeena8635]

the investor is literally putting money into your company, its not inappropriate or out of line to ask if the founders of the company are dating or not, for example they could break up and it would negatively effect the company's future. there are too many potential downsides if founders are romantically involved.

[@brian.webster]

You are correct, but it's weird for that to be one of the first 5 questions. That's more early-stage due-diligence or end-of-first-meeting "Hey just so that there are no surprises, we want to make sure that we understand the cofounder dynamics..."

[@daveb4446]

Believe it or not, these are my favorite videos. It’s way better to know about awkward situations up front instead of sugar coating and overlooking it

[@padeosarran]

When you ask for advice you get money 😂😂😂 - Brad Flora, YC Partner

[@GatlingNG]

Asking whether the co-founder or co-board member are dating or romantically involved is not unprofessional. It is important for governance purposes.

[@honor9lite1337]

Hmmm 🤔

[@dizparkash]

Absolutely agree. Very important to ensure decision making can be as secure and proficient as possible.

[@derschutz4737]

Yeah, very weird that she thought that was too personal.

[@k3fernan]

Only if they ask every set of co-founders, not just women + men pairs.

[@SecretCollage]

Also, many good business are founded by couples.

[@thefocuschic3234]

I love Michael's reactions to the first story 😆

[@lexesco]

Its Softbank

[@thefocuschic3234]

@@lexesco really?

[@jonjeskie5234]

​@@lexescono he said in London? 🤔

[@breaktherules6035]

THANK YOU so much for sharing your advice!

[@soyunkim5380]

Embracing difference is hard work. They did it. Thank you all - as an online volunteer ( I don't like Word, bot )

[@Withlindaandrews]

Love this. Thank you for shining the light!

[@ahmedsabi5143]

Now this is a topic I rarely hear discussed...great listen!

[@peterpaulliggayu]

Thanks for the valuable tips! Need these soon.

[@musicmavericks3790]

Thank you YC!!! Keep it up

[@Play-Date-Care]

Great video, Thank you YC!

[@aryanpolakhare6844]

Why are you guys so good at explaining😅

[@TheCainak]

had a couple of bad ones this month. I really needed this. Thnk you YC!!!!!

[@jonbrown7962]

I had just come off an investor call this morning that didn’t end well, and this video just cut short the spiraling that was nearing. Great video.

[@jonjeskie5234]

​@@jonbrown7962I haven't pitched yet, what are you guys seeing out there?

[@martinstine]

Thanks guys. Nice one YC

[@chapterme]

Chapters (Powered by ChapterMe) - 00:00 - Coming Up 00:13 - The Worst Investor Meetings Ever 00:37 - Keeping Founders Waiting 02:23 - Status Games 02:51 - Investors Process Is Their Products 05:16 - Advice For YC Founders: Believe The No But Not the Why 05:31 - A Grade Investor 05:49 - Advice Summary 06:37 - Investors Leverage Before and After YC 07:46 - Have A Game Plan 11:31 - Who Is A Good Investor? 13:53 - Investor Updates 14:34 - Investor Known For Testing Founders 16:09 - Investor Meeting Is A Two-Way Street 16:44 - Who Is The CEO? 18:15 - You Should Know Who You Are Meeting With 18:51 - Awkward Question Crossing Personal Line 20:13 - Good Investor 20:58 - Worst Investor Meeting: Why You Are Doing A Company Anymore 22:36 - Being Professional 23:53 - Being Smart vs Adjusting Pitch Based On Investor Feedback 25:27 - Outro: Point Of Your Startup

[@emmanuelben1393]

What if we are done building the product at that point and what we need to do is fundraise to continue growing. Shouldn't we focus on it?

[@pranavsjoshi]

Can you make a video on what not to do when pitching ? Pitching horror stories.

[@maximusandsenecagloballlc1209]

9:12:if you have money to fly, you should be able to use that travel fund to build your company

[@sputnik8543]

Love this

[@heramb575]

This is really cool!

[@ashrahman_]

One thing I really don't like about many accelerators and incubators is they make founders feel like investors are some kind of demigods. Whereas this should be ideally investors reaching out to founders.

[@devstuff2576]

welcome to Earth , where nothing is ideal

[@bjonkofficial]

You guys focus on software which is cool but what about hardware? I’d love to know more about that.

[@Rami7605]

Yc focus is Saas.

[@MultimediaPodcast]

In the interviews the other person always has a moment where they drift off when listening to the horror stories as if reliving their own nightmare experiences. The second-hand PTSD is real.

[@vanteworldinfinity]

Desperately need to figure out who the london investor was lol

[@chan90s]

Is there any website or forum where investor experiences are documented? Maybe I can create a reddit thread if there isn't one

[@ycombinator]

Founders accepted to Y Combinator get a robust investor database with detailed reviews and ratings of most investors founders interact with.

[@chan90s]

@@ycombinator ohh. Do you have any plans of making it public? I see that tons of founders waste their time shooting in the dark

[@foggycraw6758]

I don't think they're going to make it public ​@@chan90s

[@ifoundaim]

I love YC

[@Vasectomyjohn]

Was the investor Adam Neumann?

[@Vasectomyjohn]

There is no one in this space doing a roast of the industry

[@maximusandsenecagloballlc1209]

Who trained investors in etiquette?

[@alexav6060]

Great tips in this video! And I don't see anything wrong about asking "Are you guys dating?". Maybe its a mentality thing.

[@MichaelHoward-yv2py]

I think it is fair to ask if two founders are dating. Unless the investor is only asking because they are interested.

[@jakubadamowicz]

How this only has 41k views IDK lol should be 41m

[@sanjiblamichhane]

Please upload one video a day

[@funmilolasopein-mann609]

Thank you for this insight. Can YC talk about Non Profit, what it takes to have successfully Non Profit Company?

[@foggycraw6758]

Its noy what they do

[@Rohit_Singh1000]

Awsm video❤ I need video how to make billion dollar company.

[@VS_42]

Make a million people buy some thing that is worth $1000.

[@anatolynavrotsky1744]

The thing that is completely missing from all your recommendations is the language barrier. Suppose a person learns a language very actively while working on his idea in parallel, what should he do in this case? I can't believe that everyone who is not able to participate in negotiations without help, the door is closed.

[@jonjeskie5234]

Translator?

[@anatolynavrotsky1744]

@@jonjeskie5234 I mean applying to the YC

[@elizabethsflowers723]

Personal questions of whether you and your co-founder are in a relationship or not are only awkward or person if you are. As a female business owner - I wouldn't have even given this a minute of thought. Weak founder.

[@Adrian-op5ni]

She came off as annoying, weak and easily offended. She’s what’s wrong with todays society honestly. Would never want to work with her. Founders that are couples have a lower success rate. It’s a legitimate question.

[@JoaquinTorroba]

👏🏼

[@torkominv2288]

the girl on 19:00 mins obviously cannot think clear of why the investors ask some kind of questions...there are no bulshit woke boundaries when money talks... they can ask any questions ..if you are offeneded uou are not capable of running a company.Dtaing your life partner or someone you cowork with many times lead to bad situation and they want to know that... pure logic... where did true business hard mindset gone ?

[@boringmanager9559]

I honestly with all of my heart believe that VCs are doing the easiest business in the world, but just because most of them are stuck in social norms, they fail to separate weed from chaff. Seeing 5 people sleeping on the floor of a small apartment bc they worked all night is an ultra W and if the idea is sane, that's all you need to know.

[@devstuff2576]

yes risking millions of dollars is an easy job

[@boringmanager9559]

@@devstuff2576 there's no requirement on how well you must do it

[@christopherwillson]

Pretty lame of Horowitz to reject you because you hadn't decided on a single CEO. If the company was promising enough he should have just tried to convince you otherwise. And investors shouldn't expect people who pitch them to have read their work. That's a silly expectation. And it's not like not having thought of the importance of having a single CEO somehow means you're a founder unworthy of an investment.

[@jonjeskie5234]

Agreed. They could have a perfectly viable company but just haven't determined leadership structure yet.

[@esyjournal]

Many of these investors sound like rich dorks happy to have some sense of "power" over those seeking funds. Indie Hacking is the way!

[@aznviet206]

The dating question seems fair. To gauge the dynamic of the business op

[@chan90s]

Let's use this thread to understand your bad investor experience.

[@merlepatterson]

The future of investing should redirect the lion's share of its focus towards physical product startups rather than software startups. AI's will takeover much of the initial progression of new software and digital; systems going forward. Physical production is a different animal and is much more relevant economically with the growing possibility of broken global supply chains. And when I'm talking about "physical production" I don't mean novelty items such as "Fidget Spinners", I mean ball bearings, transistors, gears, filters, tools, etc. the items which are more "requirement" than "recreation".

[@jonjeskie5234]

Why? Physical products tend to have massive growth constraints. Same as legacy industries like energy.

[@merlepatterson]

@@jonjeskie5234 Your home is filled with "physical products" and you get to work in a car which is made from physical products. There is no "growth constraints" on every day required necessities. As I said; "Fidget spinners" we can do without. Ball bearings, shoes, windows, heaters, air conditioners, etc. not so much.

[@sachinknight19]

Cause 😅

[@VANCOUVERHOUSEFINDER]

I hate raising money

[@fayazmaihandost]

I really have great idea need you guys help to bring these to market

[@amorosogombe9650]

Gosh. Some of these people are awful.

[@tigreytigrey8537]

@ 19:40 that ABSOLUTELY VERY IMPORTANT to know if the founders are dating! lol. This chick is slow.

[@BizLytInteractive]