Name: What Investors Look For in Startup Founders from Former YC Partner
Uploaded: 2020-03-28T16:05:33.000Z
Duration: 17 min 8 s
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He is a designer, engineer and founder turned early stage investor, co founding Initialized Capital with Alexis Ohanian in 2013.

The superlative

Their firm manages over $500 million and if invested at the earliest stages of companies like a coin bass, FL Export means the cart and Cruz.

Prior to initialize, Gary spent nearly five years as a partner at Y Combinator, advising and funding more than 1000 companies and founders before why See, he was a co founder of a block platform called Pasha Rhys, which was acquired by Twitter in 2012 for $20 million.

He done worked at Palin Tear as a founding member of the engineering team and fun fact he actually designed to Palin tears.

Logo Gary also holds a bachelor in computer systems engineering from Stanford University.

Very impressive, but I got very lucky by getting in.

And here he is, talking to me a youtuber, the camera, the camera, unless you want to a little bit of a problem.

But yeah, so and I also heard that now your portfolio initialized performance Valley that 36 billion?

And in almost every single case, we were the first or among the first check.

So when the company was worth certainly under $10 million we funded about 200 companies.

So, like coin base, you ever one of the first?

Most of them are from high school Are like college.

Did you do well in high school and college high school?

I aimed for exactly perfect a minuses because I figured out that my our college admissions process, the transcript that the district would send out didn't have plus or minus.

And so every moment I spent on getting a plus or not minus meant that it wasn't optimized.

And what did you do it with theater time?

Because I'm pretty sure you had more time because you didn't optimize for a pluses.

Yeah, and so were growing up in apartments.

I mean, I wanted to grow up in the house and I was 14 and I was obsessed with computers and I knew how to make Web pages.

So I opened up the Internet section of the Yellow Pages and Cold called until someone gave me a job for a seven bucks an hour to make websites for cities.

And that was my first job when I was 14 I ended up taking all those earnings over, you know, every summer and winter break for a few years, and we ended up putting down the down payment for the home that I mean, my brother grew up in, so that's amazing.

And so for me, computers just fundamentally changed my life like I grew up, like sometimes food insecure, like I know what it means to be hungry or show up to school, like wearing the same clothes again.

You know, on DSO computers actually really changed my life in a fundamental way, and I would have worked on computers for free.

But it turns out, especially over the past 20 years, it's basically like winning a lot like winning the lottery was being into computers like now and in the past 20 years.

You know, it's funny because I used to work when I was maybe not 14 cause that was illegal.

But when I was 15 I think I worked at McDonald's.

And my dad thought I would got really soft by just working on computers.

He was like, Maybe you should go work at McDonald's.

Now what you're doing, you're VC, all right.

And, um, can I ask you, what kind of companies do you guys invest in or what do you look for?

Uh, we are super focused on the earliest stage.

And then So you know people with Justin idea.

When we met Brian Armstrong, who created coin base, he just quit his job.

A SZ head of anti fraud for Airbnb an Airbnb had just been minted as a $1,000,000,000 company.

Now it's worth like north of 30 billion, which is crazy.

But for him to quit that job at that moment on work on the super speculative thing called Bitcoin.

And then you you guys were one of the first invest, or you were the first invest.

I mean, we funded them at y Combinator and then initialized I was able to invest again.

So that's one of the funnest thing seeing people who are just have this crazy idea.

I mean, Bitcoin was fringe, you know, I read about it on hacker News and dismissed it like a lot of other people.

Um, but for us, it goes back to the founders.

If they are really smart and really great engineers who can build anything, that's the most important thing.

And this is in contrast to how I think most venture capitalists work.

Um, most people just look at the buzzword.

They look at the resume, they look at the buzz words, and they say check, check, check.

Okay, I'm gonna take that meeting or not on.

And I think that that's why start ups suck so bad.

That's why you read about you open up TechCrunch or you open up Twitter and you read about this startup that raised $10 million.

It's like that doesn't sound very good at all.

And it's because a lot of startup investors don't think from first principles.

They're never built a company before or they never built software before.

Like they don't know how to be an engineer.

You rely on your power point watching skills.

I guess so, aside from technical skills are you know what they can and cannot do in terms of personality traits?

The number one thing I think is actually grit around it.

So I mean, just making something that people actually want on and then putting it out there, even if it sucks.

If if there's one person out there in the world who would be happy that that exists, then you did the right thing, right?

If you are putting out software that you're not embarrassed about, then you waited too long generally on Dhe.

Then once you have that out there like you don't have to blast the world but get like at least one or two people using it and relying on it.

And if you can get one or two people to really love it, then that's the kernel of something that could grow a lot faster.

And so that's one thing that we ask ourselves, a lot of meat a founder.

Have they made something that their customers actually truly love?

Because that's more important than all the Stanford and Harvard's and all the Google and Facebook, you know, resumes in the world like you.

You could take all of those and add them up.

And it wouldn't matter if those people can't sit down in front of a user, figure out what they need and then build the thing and then have someone be really happy that that exists.

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What Investors Look For in Startup Founders from Former YC Partner

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