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Comment by k-mcgrady | Hacker News Reader

>> ""Did you apply to and get rejected by YC?" must be a common question many investors now ask of companies that aren't YC alumni."

Is this a guess or do you have anything to back it up? It seems really strange to me. An investor shouldn't be judging you based on the judgement of another investor.

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>> An investor shouldn't be judging you based on the judgement of another investor.

Hah!

You're right of course, but this happens all. the. time.

Investors and VCs are far from immune to herd mentality.

There is the chance the other investor knows something you don't know, etc. which means it isn't necessarily zero-information.

Rarely. It's mostly a game of "i'm too chicken to make decisions on my own."

VCs love love love the joke of "We're supposed to be all about new unproven dynamic ventures and insight into the future, but we're so risk averse! lol!!!!"

I've absolutely had this happen. Potential VC called us out for not being in YC. Obviously it was not a good fit for either of us!

It's just a guess, which is why I said "must." But it doesn't seem strange to me at all - investors tend to move in herds. They tend to be much more interested in companies that other investors are also interested in. That's why communicating that there's great interest from other investors is key to raising money - it creates FOMO in the investors.

Oh yeah totally agree with the FOMO. I took it more as 'you didn't get into YC - I'm not interested'. In that case letting another investor make your decision for you seems like a pretty easy way to miss out on good companies.

Yeah, and most venture investors are pretty bad at their job - the majority of the industry loses money. But that's irrelevant to startups raising money, because a dollar is a dollar is a dollar.

An investor shouldn't be judging you based on the judgement of another investor.

Why not? Personally, when a company gets into YC, my opinion of that company goes up. Seems like that is just the rational Bayesian-updating thing to do.

> An investor shouldn't be judging you based on the judgement of another investor.

You are of the opinion that this should not be the case, which may be correct. Nonetheless, this happens all the time.

Really? I would have expected social proof to play a significant (maybe not huge, but measurable) part in valuations of companies, no different to valuations of most other things.

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