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Examples of my success getting into startup deals — YC version

Gumroad founder Sahil recently tweeted he’s raising a new VC fund via AngelList Rolling Venture Fund. I got inspired by his fundraising notes on his success getting into deals, so below I list some fun facts to demonstrate how I’ve won over founders to invest in their startups: from burger dinner, personalized & persistent messages, warm intros, matchmaking stories, “don’t get me fired” plea, lightning-fast wires, and sometimes, love letters (see Twitter DM in the end)!

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I call it “YC version” because these examples are part of my 11 direct investments out of YC’s top 100 list. To state the obvious here, all fundraising numbers are available via public info.

  • Zapier (August 2012 seed, unicorn): the day before YC Demo Day, I took the founders out for a burger dinner* in Mountain View downtown after seeing their Hacker News post when people started comparing Zapier with Stripe “finally someone took away this pain and makes something that makes sense!”. I committed to invest on the spot and also shared how remote-first could be the future based on my observation and experience working at a remote-only company since 2010. The rest is history in the making. In my book, Zapier is 500x in valuation since then!

*Similarly, I took Zeplin founders out for lunch at an Italian restaurant in Mountain View downtown and got very impressed by the female CEO Pelin Kenez and her cofounders so I committed to invest on the spot too. This is yet another high-growth and profitable startup with distributed teams.

  • Cruise (March 2014 seed, unicorn exit): on YC Demo Day, founder/CEO Kyle was nowhere to be found after delivering the presentation, guess he was surrounded by too many investors. The Cruise prototype drove itself from San Franciso and parked right outside the Computer History Museum admired by many pairs of curious eyes. Because I met Kyle a few times from previous social events, I quickly sent him a note to plead to invest with no questions asked! Less than 2 years later, Cruise was acquired by GM as a new unicorn and this exit alone helped launch many VC funds by investors who were early enough to get in the deal!
  • Algolia (March 2014 seed, raised $184.2m): after YC Demo Day, I really chased founder/CEO Nicolas very hard although I was only able to secure allocation for half of my regular check size. I first asked Kyle@Cruise to make a warm intro since they were from the same YC batch; I then begged a french friend to put in a good word knowing they’d both go to a french party in SF; finally when I met Nicolas for coffee, I emphasized how good I was at matchmaking for that french friend and could use similar skills to help him hire! Fortunately, Nicolas didn’t get annoyed by my early passion to work with top founders from Europe and today Algolia is almost a unicorn!

Algolia founder Nicolas and SendBird (2016 seed, raised $122m) founder John both invested in my new fund CapitalX.vc as a Limited Partner.

  • Boom Supersonic (March 2016 seed, raised $241m): during lunch time right before YC Demo, a few PR articles caught my attention that flaunted Boom’s $5billion in LOIs with Virgin Galactic, the highest record in YC history. I quickly ran to YC Demo’s hardware booths and saw their beautiful 3D printed jet engine. You can literally see the determination in founder/CEO Blake’s eyes to make supersonic a practical reality again, a dream since his teenage years as a young pilot. I showed interest to invest, walked around a bit and decided to circle back to confirm “hey If you don’t let me in this deal, I may get fired!” Blake has ever since shared monthly investor updates (similar as Wade@Zapier), rain or shine! I can’t wait for the day when they go public!
  • Proxy (August 2016 seed, raised $58.8m): after emailing founder/CEO Denis (former YC partner) a couple of times, I FB messaged founder/CTO Simon since I met him a few times from social gatherings years ago. To increase the reply rate, I also asked for a warm intro by another Aussie portfolio founder from the same batch. Not sure if it’s for my persistence or my reputation reflected by YC’s internal investor reviews “BookFace”, I finally got in the deal! Read more here to find out how Proxy can make locks contactless in this new era.
  • FlutterWave (August 2016 seed, raised $64.5m): I loved APIs even more after witnessing Zapier’s hyper growth powering API integrations, so FlutterWave’s FinTech APIs instantly felt like a “can’t miss”. At the time I also wanted to start investing in startups from Africa, so when I realized founder GB and E’s exceptional background with previous startup exits, I committed to invest on the spot during YC Demo Day. The founders were too busy to do the handshake email during the day, to make sure I did seal the deal, I even double confirmed with the founders in front of a group of other investors.
  • UpKeep (March 2017 seed, raised $48.8m): one week before YC Demo Day, I called founder/CEO Ryan to quickly discuss why I wanted to invest: 1) it’s about time for the unsexy Asset & Maintenance industry to have mobile CMMS solution; 2) solo founder can indeed succeed; 3) loved his resourcefulness and dedication to learn to code while working full time! What’s sweet is that Ryan let me personally take over partial pro rata in their later round as a gesture to appreciate my early support!

Similarly, I discussed with Armory.io founders via their website chat window and after a few text exchanges, I quickly sealed the deal before meeting founders in person on YC Demo Day.

  • LambdaSchool (August 2017 seed, raised $122m): before YC Demo Day, after reading about LambdaSchool on TechCrunch and googling their online footprint on Twitter, Reddit, Quora, etc, I was already intrigued by their “free until hired” ISA model and founder’s tenacity. So I quickly FB messaged founder/CEO Austen to chat. After a few text exchanges, I committed to invest on the same day. I even wired them money before meeting in person, which was not uncommon on how I sealed deals in the past few years, including BraveCare, Alpaca.Markets and Taskade in August 2019 and many others on this list here.
  • Retool (August 2017, below-the-radar awesome): I must give founder/CEO David a lot of credit for asking me again after YC Demo Day to confirm my investment. Both Zapier and Retool ranked top on the 2020 Enterprise Tech 30 List, #proudinvestor indeed!

These named breakout winners make me look like a top high-conviction investor doing something right, but I may as well look like a fool sometimes especially when there’s very limited traction and success signal at seed stage. I try to be data driven, though! Goal is to keep investing and building a portfolio to let luck come our way, more often!

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Written by

GP at CapitalX.vc, Live on AngelList Rolling Fund!

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