Learning from Y-Combinator
I was a part of the Y-Combinator VC syndicate. So what that did was we invested in every single company coming out of Y-Combinator, so we did that for about 2 years and as part of that we would do office hours and mentoring for startups. As a venture capital investor, it is a great opportunity. Even though we won’t invest all the time, getting to know the startups and getting to know the founders at the acceleration stage is a great mutual benefit. They get some advice from us. Also, they get to know them a little bit earlier. I’ve helped mentor companies at Y-Combinator as well as SparkLabs and other accelerators programs around the world. It is a great experience and what we constantly encourage startups to do as they think about being at an accelerator or when they are in an accelerator program is to grow.
I realize this is a very simple thing to say but often people might approach the acceleration as “hey if I go then I can start to grow”. Well, no one does anything for you. Even if you are a part of an accelerator program. Therefore if you have a growth mindset, to begin with, that even without this program you will grow and get traction. I think that mentality is what we continue to encourage entrepreneurs. As they enter accelerator programs then they can even go faster with that mindset, to begin with.
Mentors in Accelerator Programs
The mentors in an accelerator program are very important. Whether you are at Y-Combinator or SparkLabs that do diverse startups, they will have someone who might specialize in your area. Whether you are in security, healthcare, hardware, or etc. There will be someone within that program. Therefore getting to know who that person is, is very important. Unlike a vertical accelerator like MOX, a startup might have to do a bit more digging when it comes to a more diversified fund. Both have their mutual benefits for both models, but I feel it is really important to understand exactly who specifically you will be working with during that program.
Goodwater Capital
We at Goodwater Capital feel our relationships with accelerators are very important and meaningful. We treat them with a lot of care. This is because it is a repeat game and you just want to treat people well in the ecosystem. I think that what we are seeing more and more is that it takes many people to sail a ship. You need lots of different investors around the table. So having a diverse investor set that includes both an accelerator and traditional venture capitalists in very important.
In addition accelerators like Y-Combinator are raising their own venture funds. Therefore you are increasingly seeing more convergence between venture capital and seed or accelerator funds. Those lines are blurry. But what I think is great about it is that it is not an “or”, working with an accelerator, it can be an “and” to then also work with venture capitalists. So I think it is just philosophically, we are very open to it. They are very important relationships in that we can work together for the benefit of the startups.
