Investor School / Class 04 of 11
The Brilliance in “Bad” Ideas?
Credits: Y Combinator
Y Combinator Partner: Paul Buchheit Paul Buchheit is the creator of GMail and co-founder of a social app Facebook bought in 2009– their biggest acquisition to date.
Key Takeaways
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The best ideas often look like… really bad ideas. But this makes perfect sense– if the ideas were so obviously good, big companies with the money and the manpower would just do it themselves. If breakthrough ideas were obviously good, the opportunity wouldn’t exist. |
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Seek out founders who excite and energize you because they’re smarter than you! If you meet with a founder and think that you could easily do what they’re doing, don’t invest. You should sense that the founder has an expert-level understanding of the market and their place in it. |
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Truly driven founders aren’t derailed by roadblocks– insane ambition is a promising sign that a founder will do big things. |
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If a founder can simply explain a complicated, technical idea, it reflects a mastery of the topic. It also suggests a founder will be able to advocate for, or evangelize, their product with ease. 
On Wefunder, investors can use pitch videos, profile information, and investor panels to get a sense of how well a founder communicates the premise of their company. |
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Don’t cancel meetings with founders –it’s disrespectful to the founder and will damage your investor rep. Of course, you also might be missing out on a huge investment opportunity. |
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When you feel solid in your decision to invest in a company, seal the deal ASAP! You will miss amazing opportunities if you drag your feet. Plus, companies that you are able to string along have much less potential to be the next massive success. |
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While a bargain is always tempting, you’ll hardly ever see a return on value purchases. Value investing seems like it should work but it’s a mistake more often than not. |
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If you are really excited about a company but taken aback by the price, don’t immediately write them off. The price may be high for a good reason and it isn’t a reason to discount a startup you’re floored by.
On Wefunder, this may look like an investment minimum of $250 or $500 rather than $100. If you have the financial capacity, try not to write of companies crowdfunding with one of these higher minimums. |
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Say what you will about the world of returns, but it seems to encourage optimism; it’s often more profitable to invest in the future you hope to see rather than the one you fear. Keep your cynicism at bay when investing. |
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Market size, current monthly revenue, and celebrity endorsements mean zilch without a superb founder and team. A top-notch founder is able to communicate clearly and concisely. They execute quickly and accomplish a lot with a little. They bring new meaning to the word “ambitious” and seem to churn out ideas nonstop. They attract the best talent and their product is something people really want. Lastly, they are fearsomely determined and committed to seeing their venture thrive.
Some of these traits are obviously quite a bit trickier to pick up on virtually rather than in person. But Wefunder tries to provide investors with as many data points as possible to get a sense of how well founders fit this description: founders particularly have the chance to shine through pitch videos and investor panels. |
More, please!
Class 05
Credits
In March of 2018, something big happened: the best startup investor on the planet shared its entire playbook. This investor also happens to be the world’s most famous startup accelerator, Y Combinator. From Airbnb to Doordash to Dropbox to Stripe, YC has funded many of the biggest startups you can name.
We wanted to put YC’s Startup Investor School videos right at the fingertips of our favorite people out there, Wefunder investors. To that end, we put in some crowdfunding and Wefunder-specific tid-bits, too.
While we are a YC Alum, Wefunder has no current affiliation with Y Combinator. So, many thanks to Y Combinator for all of the video material used on this page! They produced and own all of these wonderful videos while we wrote the summaries.
1) These numbers include startups currently live on Wefunder if they pass their minimum target.
2) Some startups use two different laws at the same time (i.e., Regulation D and Regulation Crowdfunding).