Geoff Ralston's Intro - Startup Investor School Day 1

Welcome everyone to my competitors' startup investor school. If you think you're at a different class, you should leave now.

So it's great to see you all here. I'm Jeff Ralston, and I'm going to act kind of as the master of ceremonies. I'll be introducing the various sessions and the great instructors that we have, both from within YC and externally. This is our first time teaching startup investor school. I think I have a welcome slide, so please excuse any kinks. I guess we've already had some coffee kinks this morning, and as I mentioned, Caltrain was a little bit late, so we're a little bit late getting started.

I will ask that, in general, we get started promptly. Let me just start by talking about the course structure. This is sort of a MOOC, massively open online course. We're live-streaming as well as having an in-person group here in Mountain View. The live stream will take place in case any of you are on here in future days at investor.google.com. The syllabus will all be there along with resources that we deem relevant to the course.

Each day, the doors are going to open here at 9:30 every morning. Some of you came earlier than that; the doors were open, they may be, they may not be, but we're gonna try to be fairly prompt there. We'll have some snacks out, as you'll see, for people here, and we'll have some lukewarm coffee for you. The classes will begin as promptly as possible at 10:00 a.m. I know you're all very busy, so we're gonna try to be on time as much as possible.

There's going to be a brief 10-minute break. I'm sure that's not going to work because anytime I've ever seen a 10-minute break, it ends up being a little bit longer, but we'll try to keep it to around 10 minutes at 10:50, and then we'll have the second part of the course at 11:00. Most of the courses will actually run until 12:30. Today, we're going to end closer to 12, even though we start a little late, so it'll be a little bit afterward.

So each day, except today apparently, will begin promptly at 10 a.m. The way the course is organized, there's a lecture and then there's a Q&A afterwards. So, please hold your questions until the Q&A session at the end, unless an instructor explicitly says they want questions during their talk. We'll also take questions from the streaming audience too.

To ask a question, please use the Twitter hashtag pound YC SIS, and we'll take as many of those questions as we can, time permitting. So there's a mixture here of watching a class of accredited and non-accredited investors. For the accredited investors, as most of you know, we are going to be extending an invite to YC's winter 2018 demo days, which are March 19th and 20th. It's a virtual invite; you can watch it online, but also, as a cool little kicker, we're going to invite randomly ten of you to come in person to YC demo day, which is kind of a pretty special occasion. I hope whoever comes enjoys it a lot.

This is our first time teaching this class; hopefully not the last. We do ask you guys to give us feedback for what worked, what didn't work, what was too obvious or too subtle, what was missing. At the end of the class, there will be a survey. I'll say this again at the end, but please do give us feedback. You can also give us feedback real-time as you like; you can email me at jeff GEO FF at Y Combinator dot com anytime you like. Honest opinions are great.

I want to start off also by pointing out I won't be up here very much. It's mostly a bunch of instructors from inside and outside YC. They're all volunteers, and they're very busy people, and they've been gracious enough to donate their incredible experience and time to us. I'm very grateful for everyone who agreed to do this.

Before we get started, I wanted to spend a couple of minutes talking about why we’re doing this. How many of you have made angel investments before? Could you raise your hands? So you don't need any of this crap; you guys have already done this.

Okay, so there's a lot of experience, and we know there's a lot of experience, but we're doing this for mainly two reasons. One is that angel and seed investors are a critical part of this startup ecosystem. The first money in usually is what allows companies to actually take flight and become real, big, interesting, scalable companies. It's also a little self-serving; we think that more great angel investors and great seed investors are great for YC companies, and we hope you will invest in YC companies.

We also think it's good for you, for people—people who have, all of you who have invested—you know it’s an amazing way to get a window into the future, to be part of this future that founders are really creating, to get a window into what's going to happen. So it's all good.

What are we hoping the outcomes will be? Venture investing has been around for hundreds of years, but really the kind of venture investing that we think of in Silicon Valley for the last 50 years... This guy named George Daurio was an early VC. This firm called ARDC made what we'd consider a seed investment of $70,000 in 1957 into this new tiny computer company called Digital Equipment Corporation, sometimes called Digital, often called DEC. That $70,000 turned into $35 million, which a lot of people found pretty interesting.

That led to what kick-started an incredible flowering of innovation and a lot of wealth creation that has never been seen like in the world, and we hope that some of y’all have that same experience hopefully investing in YC companies. It's still possible, and there are lots of examples, and if we're lucky, some of the folks who are gonna talk to you will give you some of those examples.

We also hope that you all go to be better, smarter investors after this course. I'm sure that's why some of you are here; some of you are here to get some of those insights, and I'm sure also that you will tell us if we achieve that goal.

Lastly, we want to create a permanent repository of this information so anyone can make use of it in future years. So we hope to make the repository better and better. In fact, if there's anything that you all can look at this online, that investors should check out at startupschool.org. If there's anything you think we should add, just mail it to startupschool@ycombinator.com, and we'll look at it, and if we like it, we'll add it.

Okay, very briefly now, we have four days about ten hours, so we can only cover so much. This is going to be about the fundamentals of startup investing. There will be a few deeper dives, but not that many. We want to hit the major points, kind of like an investing 101. I guess we will start off with fundamental questions of why, how, and which companies, and that's today.

Then we'll talk about the mechanics of startup investing. Clearly, many of you know these mechanics, but I think we'll cover it perhaps in ways you haven't seen before. Then we're going to walk through some of the dance that you have to do to make your decisions and to talk with entrepreneurs and founders and to figure out which are the companies that are going to be part of your investing future.

We're going to hear from a bunch of extraordinarily experienced and talented—at least by the results—investors during the course, and then we're gonna complete with a little bit of context and a little bit of a look towards the future of startup investing. Startup investing has changed radically over the last decade, and I think most of us expect a lot more changes in the next decade as well.

In the end, we'll finish up with a conversation about the role that you all can and may want to play as you think about your role as an investor and what that means. I hope you all make it to the end. I think it's going to be really useful, and I think we have a pretty great lineup of instructors that'll be very relevant and useful to everyone.