> all kinds of shenanigans
I don’t understand - why do you care if another company fundraises or not? What’s it go to do with you? YC isn’t some kind of competition is it?
I don’t understand - why do you care if another company fundraises or not? What’s it go to do with you? YC isn’t some kind of competition is it?
2) Herd Mentality: There is subtle signaling if a company being presented right beside you already has 50% of their round closed, vs a company that hasnt received this early interest.
These are not my ideals (I'm a fan of self-funding and sustainable growth), just the reality.
Also, it's not a subtle effect at all, particularly now that demo day is split up into batches with similar companies grouped together. If you're presenting on the same day as some company close to your space that has raised millions, it looks bad. Investors routinely ask who else has invested in your company. If company X has a long list of name investors and you don't, investors want to put their money in company X. It's a downside of the dynamics of the feeding frenzy created by demo day -- investors have little to go on, so they make a big deal out of herd signaling.
Obviously, this doesn't matter for the hottest deals, but most companies in a batch aren't hot deals, and the hot deals don't need demo day in the first place.
That’s not to say that I agree with the premise that it’s a zero-sum game. At the same time I can see eager investors losing interest in hearing from other startups after securing investments in the hot startup earlier on. A lot of startup investing isn’t merit-based, it’s more about hype and gossip than you’d expect.
Also - the first thing many investors asked us at demo day was "who else is investing?" - hard to answer this when you've specifically been instructed not to fundraise yet.