Y Combinator's Group Partners: Inside Their Worst Investor Meetings

A London office. A famous international fund. The investor is eating his lunch with his hands... shoes off, socks off, picking at his feet with the same hands.

While you're pitching him?

While you're pitching him. Then he lights a cigarette, in a closed office, and looks around the room like he's daring anyone to object.

Nobody says anything?

Nobody. He doesn't even finish it. He stubs the cigarette out in his lunch, picks up his coffee, and pours the coffee over the cigarette and the lunch.

Okay, that's... that's performance art. Who is telling this story?

A Group Partner at Y Combinator. This is from an episode of YC's Office Hours, posted August twenty-twenty-three, where the partners sat down and confessed their worst investor meetings. And the thing I want to get to by the end is, why would a grown man do that on purpose?

Wait, he'd done it before?

That's the detail that got me. Someone in the room says, do you think he even remembers that? And the answer is basically, that's not the only time he's done it. For him, that's a Tuesday.

Oh, that's bleak. So it's a routine. A bit.

It's a bit. And here's the setup before it even starts. This fund was known, commonly known, for keeping founders waiting. A competitor of theirs flew to London and was made to wait six or seven hours. Our guy waited one hour and felt like he got off lightly.

Got off lightly. The bar is in the basement.

Second story. Sand Hill Road. Justin dot tv has just had a banner year, and they drive down for the meeting everyone dreams about. Famous office. Stock certificates on the wall from companies that went public.

Intimidating by design.

Exactly the word they used. They sit down, they're nervous, they want to start pitching. And the investor turns to Justin, who's Chinese, and asks... do you speak Chinese?

Oh no.

Justin says, my parents do, I understand a little, I never learned. And the investor says, oh, I'm studying Chinese, do you understand this? And says a phrase.

Please tell me it stopped there.

It did not. It kept going. How about this phrase. How would you say this. Michael Seibel, who's in the room, says it felt like twenty minutes of torture. Probably five. But five minutes in a room with a very high-powered VC.

And they can't leave, because they need the money.

That's the whole asymmetry. That's what makes it a power move instead of a weird conversation.

Is YC just venting here, or is there a point?

There's a point, and Garry Tan writes it plainly. The world is full of status games, and a lot of the financial world still operates not by the truth of products and problems and the ability to build, but by this. Their line is, that just isn't going to work anymore. The best founders will have their pick of builder-focused investors.

Convenient argument for YC to make, though. They ARE the alternative.

Totally fair. But that's literally the founding story. March eleventh, two thousand five, Paul Graham and Jessica Livingston walking home from dinner in Harvard Square. She'd interviewed at a Boston VC fund that was taking forever to make up its mind.

Classic.

And he's walking along listing everything he'd change about the VC business. More investments, smaller, fund hackers instead of suits, fund younger founders. By the time they turn onto Walker Street, they've decided to just do it themselves. He put in a hundred thousand dollars. Robert Morris and Trevor Blackwell put in fifty each. YC started with two hundred thousand dollars. And here's the part that pays off the whole cigarette thing. The partners also confess the meetings THEY bungled. Because they know the selection is mostly guesswork.

Meaning what?

Paul Buchheit, who created Gmail and has made over two hundred investments, says investing purely on the quality of the idea is inversely correlated with success. Great companies are largely indistinguishable from terrible ones on the idea alone.

So all that posturing is on top of a coin flip?

His own example: Michael Seibel emailed him the Airbnb deck. Buchheit thought, air mattress rental, that's a terrible idea. Graham says YC didn't love the idea either. No growth. They funded the founders because of the energy in the room.

And Airbnb had a famous bad meeting too, right?

An investor met them in a cafe and walked out mid-meeting. They thought he'd gone to the bathroom. He never came back. Brian Chesky's line: he didn't even finish his smoothie.

That's almost worse than the cigarette.

They were funding the company on a binder of maxed-out credit cards. One last shot, then quit.

So the barefoot guy in London... is just a man with no information, performing certainty.

That's it. The theatre is proportional to the uncertainty. Nobody knows. Some people cover it with questions, some cover it with a cigarette in their lunch.

So what do I actually do with that?

Take the meeting, take the notes, and take the rejection as information about their bar, not about you. Dalton Caldwell's point: investors say no because they're waiting for something that clears a higher bar, not because they don't believe. And remember YC's own closing line on it... the point of your startup is not to raise money, or impress investors, or gain status. It's to make something people want.

Easy to say when you're the one with the checkbook.

True. But the smoothie guy is a footnote now, and Airbnb went public. The scoreboard eventually stops caring who kept you waiting.