Lecture, Webinar, Q&A
Startup Investor School Day 1 Live Stream
- An invite to the Y Combinator Winter 2018 Demo Days on March 19th and 20th is expected, featuring a virtual component and the random selection of 10 non-accredited investors for in-person attendance.
- Feedback will be gathered via a post-class survey to identify strengths, weaknesses, and missing elements, with the goal of improving the information repository at investors.startupschool.org over future years.
- The course lineup of instructors is projected to remain highly relevant and useful, while the broader startup investing landscape is predicted to undergo radical shifts in the next decade similar to the previous ten years.
- Investment opportunities with high potential often appear as bad ideas initially; the current market sees more investors than high-quality startups, placing founders in the driver's seat with leverage that is not expected to return soon.
- Founders are expected to utilize reference checks from other founders when selecting investors, while investors who prioritize quick riches are predicted to fail due to the lack of necessary long-term commitment.
- Success factors for founders include obsession, focus, frugality, and love, whereas a lack of deep mission sense is likely to lead to long-term failure; additionally, hard companies are anticipated to attract more helpful interest than easy ones.
- The speaker anticipates that security laws will limit mass crowdfunding through ICOs, with security tokens and ICOs likely changing financings in ways distinct from current mass crowdfunding assumptions.
- Value investing is not considered a winning strategy for most angel investors, and the SAFE document is explicitly defined as not being a loan, not accruing interest, and having no repayment rights at maturity.
- Investors raising via a top-quartile VC-led up round are expected to exercise pro rata rights, while the pro rata right itself will not be in the initial SAFE conversion but may be negotiated via a side letter.
- Standard SAFE agreements do not address lifestyle companies that become self-sustaining without a priced round or acquisition, requiring manual resolution, whereas the Safe for Equity agreement is expected to evolve to reflect timing differences between seed and Series A rounds.
- Most founders are predicted to use the Clerky platform for sending and signing SAFEs, and investors are advised to wire funds immediately upon signing to protect their reputation.
- SAFE documents are not standard with a Most Favored Nation provision, though such provisions are negotiable, and high-growth companies are generally expected to be structured as C-Corps rather than LLCs.
- While SAFEs work globally, they may require adjustment in specific jurisdictions like the UK to align with local tax schemes.