Elizabeth Yin
Appearances
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So just lots of mistakes everywhere, but you live, you learn, and it just makes you stronger.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Well, I did have a number of awesome mentors around me, especially later. In the first couple of years, I would say I didn't really have many people. But once we were able to raise a little bit of money, a number of my angel investors were extremely knowledgeable about this journey. I learned a lot about fundraising from Andrew Chen, who's now a partner at Andreessen Horowitz.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
I learned a lot about being seed strapped or whatnot from David Hauser, who was another angel of mine who started a company called Grasshopper. So I did learn a lot of things about specific areas from specific people who are really good at that. But I wish that I had had actually more of that knowledge and mentorship even earlier.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
It has certainly changed the ecosystem, but I'll give you an example. When I started this entrepreneurship journey, Eric Ries and Steve Blank were not even talking about lean startup yet. This is how sort of dark ages this was.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But now every founder I meet has at least heard of Lean Startup, if not gone down the rabbit hole of reading everything or watching all these videos about what Lean Startup is. How do you de-risk the things that need de-risking the most? How do you build the minimum viable product you need to get some...
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
level of validation, these kinds of concepts or strategies were just not talked about or around. So I was just shooting in the dark for a while the first couple of years before either some people came into the picture or actually I really just latched on to the lean startup philosophy once they did start writing about that.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Yeah, the mergers and acquisition process, I would still say is very opaque. There are not many people who talk about that on the internet. So that I think is an area of opportunity to spread more knowledge for sure. I would say that it's very akin to a fundraising process in that there's that old adage, whatever companies are bought, not sold.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
It's very hard in that you're not trying to go out and actively sell yourself. But at the same time, To create optionality, you do have to build relationships. And this is why I say it's a little bit akin to fundraising, except even harder. Because for fundraisers, at least you know all the investors you're talking with, at least for VCs. You know they're going to invest their money in somebody.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
It just may or may not be you. For M&A, that's not necessarily the case. A company may decide not to acquire anybody, right? And priorities change and They're not just acquiring you because they think this is the best ROI on their money. They're acquiring you because there's good fit. It's got to be good strategic fit with product or culture or all these other things.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
There are many reasons why companies acquire other companies, but that is not a guarantee and not necessarily what companies are actively looking for.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So I think to the extent that people want to maximize their optionality on M&A, one of the best things that they can do, and I've certainly heard this validated from other portfolio companies of mine over the years, is to build relationships even early on with other people in the ecosystem.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
These relationships can be with other folks who may be potential partners for you, in which case it is useful for your business. You're not just wasting your time. But over time, like if those partnerships end up becoming very fruitful and you like the people, then you may end up exploring something bigger. And that's typically where M&A comes from.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
On occasion, M&A also comes from companies who are looking to get into a strategic area and they realize they have no expertise in that area. And so they're trying to actively meet people. That's another way as well. But I think ultimately thinking about it from a partnership perspective is the best way to thinking about how to meet lots of people and why you're meeting them.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And it's under the pretense of can we work together even as a separate entity right now? And maybe down the road it leads to something, but maybe it doesn't. And so that's how I would approach it.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Thank you for having me, Alana.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Going specific. Specifically to the LaunchBit acquisition, and again, building off of this idea of partnerships, LaunchBit was acquired by a company called BuySellAds. They are a seed strap company, but at a very high level. They own a lot of ad networks and media properties. And we had actually been partners with them for quite a long time.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And so again, going back to that, I had known the CEO for years. We had worked with that team. We were already... I had a monetization partnership all prior to the acquisition. So post-acquisition, it was actually quite easy. And as part of the agreement on that, they had actually wanted my co-founder and myself not to work there. We were not in handcuffs.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But there was a time period where they wanted us to essentially provide support for them as they figured out how to run this. As it would turn out, actually, after I think about day two, they didn't need us anymore because my business partner, who is really thorough and great at documentation and had been writing all this documentation over the years, had handed them this handbook.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
It was this huge handbook of everything about how do you run the LaunchBit business. So she said, even on day one, here, start using this. You need help, ping us. But then they never pinged us. So they never pinged us. It was very effective. And so actually, we didn't really need to do anything with them. So at that point, I was trying to figure out what to do and how to spend some time.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Yeah, I think I'm really a result of time and place. So I'm originally from the San Francisco Bay Area, still am here. You know, I'm kind of dating myself here, but I was in high school during the 90s. And so during the 90s, you had the dot-com boom. I was in high school starting in late 96. and graduated in 2000.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And 500 Startups was the accelerator program that I had gone through with my own company. So that's how I knew them. I had been so heads down in the ads world. I didn't know everything that was happening at that point in time. And this is a time when Bitcoin was just kind of becoming a thing. Drones were becoming a thing. AR, VR was also becoming a thing.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Obviously, 10 years later, we now know what ended up really becoming a thing. And many things also did not. But the world was very new. And I thought, gosh, I really need to learn. If I want to start another company, which I wanted to... I need to learn about what is happening in the world. So I went to 500 startups. What year is this? This was in late 2014, early 2015.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So if anybody bought Bitcoin back then, I'm sure you're doing great. And so I was trying to learn about what was happening. I didn't go to 500 Startups to learn how to invest or become a VC. I wanted to know what startups were being built and what people were working on and kind of mentor and give back. That was the initial driver.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But then their accelerator manager ended up leaving and there was this vacancy. And they asked me, since I had nothing else going on, whether I wanted to run it. And although I didn't really know how to invest, I took the job and learned how to invest. I wrote about 200 checks for them out of that fund.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I left as a result of some changes in the organization or changes that I felt needed to happen in the organization, I should say. So I left in 2017 and started Hustle Fund that summer. But I think for the first couple of years, it was a pretty stable place. I mean, obviously, there's always a lot of chaos with startup accelerators in general.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But I learned a lot in those two to three years or so, just about how do you invest? What do you look for? What are all the things that can go wrong? The good, the bad, the ugly.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So that was that perfect time when all the wave of companies took off and then I was in college during the bust. So I think from my perspective, startups looked rosy all throughout high school. And that honestly actually was a big draw for me in getting into tech in the first place. And it's not like my family was in tech, they were not entrepreneurs or anything like that just by being here.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
There are many schools of thought on how to invest. Certainly, there are a lot of VCs who have very concentrated portfolios. They write large checks, they sit on boards, and they don't have that many positions. Accelerators tend to be the exact opposite. They write small checks, they go in very early, they don't sit on boards.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
It's much more of a community feel because the partners cannot spend that much time with each company. It's more about how do you help each other out in a cohort. They are night and day models, but both can work from a returns perspective. So I was very much in this world of the high frequency model.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And so I got to see a lot to your point, which I think was very helpful for my own career in terms of, I think my takeaways were, you cannot tell after four months who is going to be a winner or how big that winner is going to be. But I learned a lot about, I What I've found over the years in my best founders is that they are very focused on one thing at a time.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Typically it's revenue, but it could be whatever. They are very experimental. They will execute with speed on an experiment, regroup, run another experiment, et cetera. That speed of execution is so, so important. And when people ask me, well, what do you mean by that? An example is if I see a company doing customer development,
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Maybe they're doing 100 calls in three days or another team might be doing 100 calls in three weeks. There's a difference between the two teams, right? So the best teams just really do move fast and they are still like have high quality work and throughput during that fast time.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So that's actually why we call ourselves Hustle Fund, because we are looking to back those founders who have speed of execution. Hustle to me doesn't mean like burning the midnight oil. Actually, many of our best founders don't work all the time. But when they do work, they're very focused and they're focused on that one thing.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I think that that's something that I found at 500 Startups, at least in comparing founders.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
I think there are three buckets of founders. There are certainly people in that bucket that you're talking about where it's just like, oh gosh, they are really not focused on the right things. They move too slowly, whatever it may be, all these issues. But the other
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
two buckets of founders, like the difference between a great founder and call it okay or good founder, there isn't really much correlation in outcome. And the reason for that is the actual business idea or business matters just as much as the founder, if not even more.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
I've seen founders whom I would say are they're good or they're OK, but they happen to get extremely lucky in landing on this thing that everybody wants. And they can really grow their company quite well. And that can work. So, I think that is something that a lot of investors will disagree with me on. They will say, oh, we only want to invest in the best founders.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But the reality is the idea actually matters a lot. And I would say it matters more and more every year that goes by because the world is getting more competitive. So I have backed a number of people whom I would consider great founders, but they just had the wrong idea or an idea that was in such a competitive space they couldn't maneuver or grow that quickly or grow that well.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I think there's just a lot of luck around the idea that has to be factored in here. It's not just all about the founder.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Yeah, raising a fund is definitely not easy. I think if people hate fundraising for their startup, they will absolutely hate raising money for a fund. If you do not love fundraising, I would not recommend raising a fund to anybody. I think actually that is probably one of the things that people need to consider in deciding to start a fund. How much do you love fundraising?
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Because you will be spending years of your life just focused on fundraising. I think I felt fortunate in that I had done fundraising before I got a lot of my learnings about how to fundraise as a founder. So in raising money for our fund one for Hustle Fund, certainly it was hard, but I was not thrown for a loop because I was not surprised.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Like I had all the things that you go through, people ghosting you or trying to iterate on your story or trying to close people. All those issues that you face as a founder in fundraising, you also face as a fund, if not like 10X fold. And the reason why I say 10X fold, it really is a factor of when you're a fund one, you're like a pre-seed startup.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So a lot of institutional investors will not touch you. They may meet with you, but nobody is gonna be writing a big check. And this totally makes sense, right? If I'm meeting with a pension fund that is trying to invest teachers' retirement money, they're not going to invest in my fun one. They're not going to take that level of risk with somebody's money like that, right?
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But they may want to meet with me. So that way down the road, when I've proven myself, then they'll write a check. So that means that the big money is more or less off the table. And now you're going to effectively the equivalent of angels. And many of these angels whom we went to are people who are also angel investors in a number of other startups that I have invested in as well, right?
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And so they're 25K checks. In some cases, we took money from friends at the 5K level for our fund one. But the thing is, you're not trying to raise half a million dollars or a million dollars. You're trying to raise 10 million or more. And so that was really the issue with the fund. It's just a longer process as you take all of these small checks.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Well, I think it comes back to how badly do you want to be doing this? And especially as it became popular to raise a fund, I think a lot of people just flippantly decided to raise funds, not really understanding what was involved. But if you love fundraising enough...
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
and you know it's a numbers game, like go in with the mentality of, okay, I'm going to do 2,000 meetings on this fund and it's just a numbers game, then I think it's fine. On some level, you can actually see light at the end of the tunnel. Like, all right, we're only at meeting 500. We're just going to keep going. So that makes it easier, I think.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I think also this general question of why are you doing this It's something that I think a lot of people should ask themselves for whatever it is they do, whether it's raising a fund or starting a company or whatever their job is. For us, building Hustle Fund was not really just to play VC here, which is, I think, something that a lot of people thought we were trying to do.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
For us, it's a big mission and my life's work. When Eric and I, my business partner, decided to start Hustle Fund, we had a lot of conversations around... what did we want the world to look like? Not just are we going to be a VC, but one of the things that's really important to us at Hustle Fund is we want to really have a lot of impact.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I think not just on the portfolio companies that we invest in, but on the broader entrepreneurial ecosystem. I think one of the things that we had struggled with in our own journeys was this idea of There really wasn't a lot of content, as I kind of mentioned at the earliest stages. That has changed a bit now. There really wasn't a lot of help from a network's perspective.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So I'll actually give you a very specific story of something that happened to me in high school, and then I'll go into that. So during high school, my best friend Jennifer in ninth grade asked me if I wanted to help out her cousin Tony during winter break with his startup. And I didn't know what a startup was, but I also didn't have anything going on during winter break.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And there really wasn't a lot of funding at what I would call pre-seed. There was some funding at the seed stage once somebody got to maybe $10,000 per month in revenue. But at pre-seed, nobody wanted to take a bet when we started Hustle Fund. I could count maybe a handful of pre-seed funds on one hand. Now there are more. But back then when we started Hustle Fund, pre-seed was not... Thank you.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Thank you.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Thank you. Thank you very much. Thank you. Thank you. Thank you. Thank you.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And so we took the Caltrain up to San Francisco and we went to this nondescript office and there was nobody there for probably a good hour because everyone sauntered in late and all these people who were maybe 22, 23 years old coming in. The office was a mess. It was chaotic. People were running around. There were important-looking people coming into the office, leaving the office.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Thank you. Thank you. Thank you. Thank you.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
There was just a lot going on. But I loved that energy, and I loved that Tony and his friends were kind of doing everything, and they could eat all the pizza they wanted. It was the dream. And I didn't really understand how startups make money back then. But fast forward, Jennifer's cousin, Tony, ended up selling that company for a couple hundred million bucks to Microsoft.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Thank you. Thank you. Thank you.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
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Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But I think what more people here may know him for was actually he later became the CEO of Zappos, which was one of his.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And that was the late Tony Hsieh. So he actually had a very big impact on my life as a mentor over the years as well. But I think what I saw on that day was just sort of this new way to work. Back then, corporates were very structured, right? There were cubicles and you dressed up to go to work and people interact with their boss in a certain way.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
where, you know, you have this guy who is very successful in just about everything he touched. And frankly speaking, he was very, very good at running companies and almost everything he touched in life was a success, even from when he was a child.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And so I think a lot of people wonder, this is crazy. Like how can somebody who is so successful and he was also a very kind person as well, always wanted to help everybody. And it just seemed like somebody who had everything going for him. How can you devolve into that? issues with drugs, and his life kind of just sort of spiraled a little out of control.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And ultimately, when he died, it was related to that. How does that happen? And I don't know the answer to that. And I think it's something I've certainly thought a lot about over the years. But what I do think about is, I think it's really important for people to have, you know, coming back to this idea of like, why is it that you're doing the thing that you do? What is your purpose?
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
I think that is so, so important for people, whether you're successful or not, because I think ultimately there is only so much that money can get you. And here's an example of somebody who had just about all the money you could have ever wanted in the world. But you need to have that mission. You need to have the thing that keeps you going that is beyond yourself.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I think that that is something that I really have doubled down in thinking about over the last few years.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And it's so important, I think, going back to this idea of your identity is not your entities, etc. A thing I often see founders go through, even if they've had a successful exit, after the exit, they actually get really lost. And I feel like I had a little bit about that for myself, which is, you have this feeling of emptiness. The thing that I had been working so hard on for years is now gone.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Obviously, much of that has changed even at large tech companies. But back then, it was a big breath of fresh air. And I absolutely love that. So that was the initial draw to startups. and a big driver for wanting to also study engineering in school. Fast forward, I think one of the things that happened when I graduated was the market actually was not great. I graduated in 2004.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
I don't know who I am. I don't know what I'm doing, like what is going on. And I think actually that is a feeling that many people do not expect to have when their company is going to be acquired. People think, oh yeah, my company is going to be acquired. I'm going to bring out the champagne and celebrate or whatever. But that emptiness is a real feeling that I see a lot of people go through.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And so this is where I do think there needs to, to the extent possible, have this separation between this is your company. This is you. Whatever happens to your company, good or bad, is not you. Because I think that can cause some problems when people get too tied up in the thing that they're working on. Then all of a sudden, the thing they're working on is not there anymore.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
There are a few different things. One is on the financial front. I learned about angel investing through a couple of friends of mine who were startup founders. And this was actually when I was still building my own company and my friends were too. They had not yet had exits or anything like that.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I learned that they were writing angel checks, really small, like $1,000 in some cases, but they were starting to build a portfolio. And that's not something that is really talked about very much at all. In my mind, I thought an angel investor needed to be, I don't know, writing checks of $100,000 or $25,000 or whatever it is. And I thought you needed to be super rich to be able to do that.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But here were my founder friends doing this. And I didn't learn about this until... fairly late into the startup journey. And certainly I was in my thirties by then. I wish I had known about this much earlier in my twenties. And it's kind of for twofold. One, I actually believe that to build a good investment portfolio, it's not about investing in startups.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
You have to have good foundational things like index funds, et cetera. But I do think that if you are in the startup world, you're meeting a lot of great people and maybe you have some level of taste because you're meeting amazing people and it is a good sort of kicker as an investment and you get to learn. And then the second thing is it actually helps you build network.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
How do you invest? What do you look for?
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So outside of the ROI of the actual investment, if you think about it as the equivalent of an MBA degree or whatever, or some sort of degree, that network actually ends up becoming very valuable. It allows you to meet other angel investors who could potentially invest in any of your ventures, et cetera.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And that was just something that I wish I had learned a lot earlier that I think some people were already doing, but probably most people don't talk about or know about.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
We were in a recession still. A lot of people were even wondering, is software even still a thing? That was very unclear. Obviously, that sounds absolutely ludicrous now, but it really was a fear, certainly in 2001. But even by the time 2004 rolled around, that was a big question mark about whether startups were going to come back. So I went to work in big tech for a while.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Well, likewise. Thank you so much for having me on your show.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And, you know, I think as part of that soul searching journey, I realized that I had done almost all of my schooling in the Bay Area within like a five mile radius. middle school, high school, and college were all basically in the same place across the street from each other. So I really wanted to leave and go very far away to see what was something new.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And that was how I ended up interning at CERN or interning at Infosys or wherever, or spending a year working at a multimeter company in Japan. So that was the driver to learn something new. And even to this day, actually, I would say that some of the things I've learned, especially on the cultural side, but even just in terms of how seeing some other places operate.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
You know, we look at a lot of international companies and it has informed a lot of my thinking around investing internationally as well.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Yeah, I think perhaps many people who have immigrated to places, if you're watching this, can certainly relate to that. I think what it is, at least for me, is it ends up being all the little details added up that kind of bombard you all at once. I can't get a bank account or I don't know how to get a bank account and I can't get a cell phone and I can't get this and I can't get that.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And each thing in isolation doesn't seem like a big problem, but somehow they're all circularly connected together and it does affect your life. So I think there's the combination of language, but also the combination of understanding what works with what in a society. And that does shape you. But it was good philosophically for me to go through and learn more about myself and who I am.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Google had phenomenal people. That was probably the number one thing that I loved about Google. They hired amazing people. Many of those folks have gone on to either start companies or other amazing things now. That was the best part about it. But I think that aside, I also had many frustrations, admittedly. It was a very big company even back then. and certainly is bigger now.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
The bureaucracy was just really starting to get to me. I just felt like it wasn't meant for me. I needed to go to a smaller place and that's how I finally landed on this idea of, okay, maybe I need to just start my own thing. That was my problem, not Google's problem. I left in late 2008 after spending just over a year at Google.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
At that time, there had been a TechCrunch article that had just come out weeks before I decided to turn in my notice. It said, rest in peace, good times. It was all about how Sequoia was battening down the hatches. They were not going to invest in startups and everyone should be prepared for a downturn. And that gave me a moment of repause, like, okay, maybe I should not leave.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
In the beginning, I had no idea what I was doing. I couldn't raise any money, but I also didn't know how to run a company. We did 20 versions of our pitch for our fun one. And by the 20th one, it was way better. The first pitch, I'm almost like embarrassed that I thought that that was good. That's also part of the process in getting rejections.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But then my second thought was, well, if I don't leave, what would I be waiting for in order to leave? And I couldn't answer that question. So I decided to leave. And I think that ended up actually being one of the best decisions I made and also one of the scariest at the same time. In the beginning, I had no idea what I was doing.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
I couldn't raise any money, but I also didn't know how to run a company. And the next two years really taught me a lot about all the hard parts of starting a company, including the major one, customer acquisition, like how do you get customers. At Google, even if you just...
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
wrote about something, every news outlet would pick that up and amplify it because everyone wanted to be part of Google's story. But that was not the case with my startup. Nobody cared. And that was a learning, but it also shaped a lot of my thoughts on how I invest as well.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
A hundred percent. And actually isolating on this decision of when is the right time to do something. I actually think there is never a right time to do a lot of things, whether it's starting a company or having a child or whatever it may be. So I think the way that I thought about it was there's never a circumstance where anybody wants to take no salary.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And as you move on, maybe there's this point where, okay, you've accumulated a whole bunch and you have a bigger safety net, but also you may have more responsibilities and more expenses. So I think there are these trade-offs. At that time when I decided to take the leap, I was young. I was single. I had no dependents. I was living with my parents.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
I didn't really have much by way of expenses and I didn't have much by way of responsibilities either. So from that perspective, it was actually a very ideal time, even though the markets were not great. If I had waited to take some of my savings or whatever, maybe other things would have come into play that I would have needed to consider, right? Like getting married, having a child or...
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
you know, now caring for somebody else and we need more space and now we're off on our own paying rent. I didn't have those things.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Well, my mother's often still asked me when I'm going back to Google. I think it was less from the perspective of what are you doing? And it's not like I left to go and do something totally foolish that was out of my area of understanding. I was still in tech. It's not like I was going off to become an actress, which I know nothing about.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
You learn, you adapt, you change your messaging, you address the concerns and you get better at it.
Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So I don't think they cared that much from that perspective. But what they could no longer say is, oh, my daughter works at Google. No.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
It was very humbling. And I think to your point, I felt like I knew some things and then it was a process of learning, okay, I actually don't really know anything. And I often feel like actually once people are comfortable with the idea of I don't really know anything, but I'm here to learn and I'm going to learn as fast as I can, that actually positions people well.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And I would say that that is a really good attitude to go into as a first time founder and CEO. Because a CEO's job is to learn just about every aspect of the job. And most people, unless you've been an entrepreneur before, have never done that. Like you've done your one thing, maybe you do it really well, but you've never done the 10 other things you need to do.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
And then your job changes again, like once you start growing and you have people on your team and you have to learn different skills. And I think that is a position that I like to try to have, even to this day as an investor. And in fact, every year that goes on, I hate to admit it, but I would say that my impression of investing is every year that goes on, I realize, I don't know. I have no idea.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But I think that is actually a good position to have.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Well, a lot of it was just reading a lot and making a lot of mistakes, honestly. So in the beginning, I didn't know how to acquire customers. So you just sort of start trying things. And some of the trying things is just like, okay, well, I can email 10 people. Now that I've exhausted my network, maybe I can start to send emails to people I don't know, cold email people, right?
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
So you just take these baby steps and then you also read about what other people are doing and then you try those yourself. I do truly believe that to the extent possible, people should not reinvent the wheel. So if there are things working for other people, borrow them and do the same thing and see if it works for you or modify it. And so that's how I learned just about everything on the job.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
The problem is you're constantly learning so much about everything. So it's really like the old adage of drinking out of a fire hose. But I would say it's like, as the company goes along, then you're learning the next thing that you need to know. And you're just trying to stay a step ahead of it's too late. So you shouldn't, like you should have learned that five months ago.
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How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
But that was really the process on everything. And I think it wasn't actually a very pretty streamlined journey. There was a lot of zigzagging, a lot of mistakes that I made. Everything from tactical mistakes, like customer acquisition mistakes, to working with people. I was also a first-time people manager, so made lots of mistakes in that as well.