Startup Investor School Preview with Geoff Ralston

So why don't we just start with the basic facts? So what is Investor School?

Yeah, so Investor School is a four-day class that we're teaching for the very first time here in Mountain View, across the street and in the original Y Combinator of building 320. It's a school that's gonna teach the basis, the basics of startup investing. We hope people come in person. We think there's a lot of demand, so we think we're hearing a lot of folks who want to come. But we're also doing a live stream, and we're going to make it a MOOC, a massively open online course, just like we've done in the past with Startup School. So we're really excited about the potential to give back a whole bunch of the knowledge that we've gained at YC over the years and how to be a really effective angel investor to the community at large.

So we create more, better, happier...

And what gave you the impression that folks needed a school?

Well, what gives us the impression that folks need a school is we've seen lots of, shall we say, not so effective behavior and approaches to angel investing. We're not being conceited and thinking that we've only seen it in ourselves. Sure, most of us have at one time or another in the partnership at YC been angel investors, and so we know all the missteps. We've done them ourselves. I personally have made so many mistakes angel investing that I feel, if nothing else, qualified to tell you a whole bunch of things you shouldn't do. So we're trying to help people avoid a lot of the pitfalls. There are ways to be a better investor and ways to be a worse investor, and we think we can help teach people those. So again, make them better at their job, even if it's not a job, better at the discipline of angel investing, and that makes it better for the companies in whom they're investing.

And is there a particular type of person you're looking for to participate in Investor School? Like do they need to have, you know, been an engineer and had an exit, or do they just like have some cash that they want to invest? Who are you looking for?

Well, the one qualification is that you're an accredited investor. Okay, and the SEC has a set of rules as to what comprises accreditation, you know, in terms of income and wealth. As long as you're accredited, we want everybody. In fact, we actually think this is an opportunity to add greater diversity to the ranks of investors. So yeah, anyone who's accredited, which is a little bit the equivalent of what you said, is you have some spare cash to invest that you can afford to lose. You know, you have to be honest about this; this is a very high-risk investing paradigm. So if you're going to invest in startup companies, you have to be prepared for extraordinary upside, but also perhaps more likely downside.

And are you giving anyone a certain criteria of what they should think about? It's like, is this an approximate amount of money that if you're gonna get started angel investing in the valley, you should be ready to start putting down, putting to work? Is there a number that you have in mind?

I think we'll give some guidelines as to how to think about creating your portfolio. Think about doing asset allocation across that particular portfolio. But how much you invest is a very personal thing. It's sort of how much you will care about losing; how much upside you want to have; what percentage of a company it's important for you to own if you think about it that way. So I think the amount that people invest is incredibly variable. There are some minimums. You know, most people aren't investing $5,000 when they do angel investing. That does happen, but it's unusual. Yeah, it sort of tends to be a minimum in the tens of thousands of dollars, up to a maximum of, you know, hundreds of thousands of dollars usually.

Okay, so maybe we ought to walk through the curriculum and, like, broad strokes. So we're day one. What are you guys gonna start with?

Well, day one we're gonna start with, as you might expect, the basics. Yeah, sort of how and how you should start...