Leap Academy with Ilana Golan
How to Win Investors: The Brutal Truth About Raising Capital | Elizabeth Yin
Thu, 03 Apr 2025
After quitting her job at Google, Elizabeth Yin took a bold leap into entrepreneurship by founding LaunchBit, an adtech company. Despite facing challenges with fundraising and customer acquisition, LaunchBit was acquired. Drawing on these experiences, Elizabeth joined 500 Startups, where she invested in early-stage companies. As co-founder of Hustle Fund, she now backs startups focused on speed and execution. In this episode, Elizabeth joins Ilana to share the challenges of starting a business, how she evaluates founders to invest in, and the realities of fundraising in the competitive world of venture capital. Elizabeth Yin is a co-founder and General Partner at Hustle Fund, a seed-stage venture capital firm that invests in early-stage startups. She has reviewed over 20,000 startup pitches and assisted numerous portfolio founders in raising hundreds of millions of dollars. In this episode, Ilana and Elizabeth will discuss: (00:00) Introduction (01:39) Falling in Love with Startups in High School (05:32) Adapting to Global Work Cultures (07:25) Leaving Google to Launch Her Startup (13:08) The Challenges of Starting a Business (16:28) How Mentors Shaped Her Startup Journey (18:15) How to Approach Mergers and Acquisitions (21:03) Key Lessons From Investing in 200+ Startups (29:41) Fundraising Realities and Strategies (33:36) The Mission Behind Hustle Fund (35:23) Navigating Stereotypes and Rejection (41:13) How to Decide Whether to Raise Capital (45:16) Handling Identity Shifts as an Entrepreneur (51:14) Building a Network Through Angel Investing Elizabeth Yin is a co-founder and General Partner at Hustle Fund, a seed-stage venture capital firm that invests in early-stage startups. She founded LaunchBit, an adtech company acquired in 2014, and was a partner at 500 Startups, where she invested in seed-stage companies. Elizabeth has reviewed over 20,000 startup pitches and assisted numerous portfolio founders in raising hundreds of millions of dollars. Connect with Elizabeth: Elizabeth’s Website: elizabethyin.com Elizabeth’s LinkedIn: linkedin.com/in/elizabethyin/ Resources Mentioned: Hustle Fund’s Website: hustlefund.vc/ Leap Academy: Ready to make the LEAP in your career? There is a NEW way for professionals to Advance Their Careers & Make 5-6 figures of EXTRA INCOME in Record Time. Check out our free training today at leapacademy.com/training
Chapter 1: What inspired Elizabeth Yin to pursue entrepreneurship?
What are all the things that can go wrong? The good, the bad, the ugly. Elizabeth Yen, co-founder and general partner of Hustle Fund. Before becoming an investor, Elizabeth built and sold her own company, Launchbit, and later helped shape the next wave of startups as a partner at 500 Startups.
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.
You learn, you adapt, you change your messaging, you address the concerns and you get better at it.
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Elizabeth Yin, co-founder and general partner of Hustle Fund. I've been following her for a while now. Now, before becoming an investor, Elizabeth built and sold her own company, Launchbit, and later helped shape the next wave of startups as a partner at 500 Startups, which is an incredible startup accelerator, by the way, here in the Bay Area, California.
Elizabeth, I'm just so excited for this show. So first of all, thank you for joining me.
Thank you for having me, Alana.
It's going to be super fun. So take me back in time. How did you grow up? Why engineering grabbed your attention? How did that happen?
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.
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Chapter 2: How did Elizabeth Yin transition from Google to starting her own company?
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.
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.
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.
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.
You know, we look at a lot of international companies and it has informed a lot of my thinking around investing internationally as well.
That's incredible. And I'm sure it shapes you, right? Even just needing to prove yourself in a new place and new languages. How was that? I mean, it's not easy, especially if it was not your nature, right?
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.
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.
I love that you said that. I almost feel like every example that you said, yeah, tick. I've had that tick, you know, like no social security, no history, no phone number. No, it was just like, oh my God. And it was almost like all my advantages back home in Israel now became disadvantages. How is that even possible? And I think it does teach you a lot.
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Chapter 3: What challenges did Elizabeth Yin face when starting LaunchBit?
Every single time there's just this massive learning that needs to happen. So how did you figure it out? How did you raise capital? How did you learn how to be acquired? Walk us through this a little bit, Elizabeth. Oh, gosh.
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?
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.
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.
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.
So just lots of mistakes everywhere, but you live, you learn, and it just makes you stronger.
We'll talk about it because I can see already how much of this you're bringing to Hustle Fund. So we'll talk about it. But talk to me, how much did you lean on amazing mentors like Tony and others?
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.
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.
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Chapter 4: How did mentors influence Elizabeth Yin's entrepreneurial journey?
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.
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.
So in 2017, again, you decide to do something that for most, they would call it suicide to start your own fund. I do think that it's exponentially harder to raise money for your own fund. You did have really good background. So the 500 Startups is a huge background. Being a founder that already sold a company, that's very different. But still, raising a fund is not easy.
Can you share a little bit of that journey of raising the first round for this fund?
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?
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.
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.
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?
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?
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Chapter 5: What are Elizabeth Yin's insights on mergers and acquisitions?
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.
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.
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.
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.
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.
Thank you.
Thank you. Thank you.
Thank you. Thank you very much. Thank you. Thank you. Thank you. Thank you.
Thank you. Thank you.
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