In the last year, YC companies have raised over $550mm across 62 Series As. Near as we can tell, that’s the highest number in any portfolio anywhere in venture investing. We expect that number to go up each year as we fund more companies.

While looking across those rounds, we noticed that the only unifying theme was a lack of best practices. Each time a founder reached out about starting a process, it felt as if we had to start from scratch. Even when we looked at some of the most common pieces of accepted Series A wisdom, such as “you need to be at $1mm run rate,” the data proved otherwise. These often-discussed milestones have led a lot of founders to believe they’re ready to raise when they’re not. That’s problematic because fundraising is a huge distraction, and when founders kick off a raise at the wrong time, they can severely damage their companies.

Even worse, we often see founders spend all of the money from their angel round while chasing the wrong goals. They then kick off the Series A process because they are out of cash, whether or not they’ve hit their perceived milestone. This strategy rarely works and has been addressed in the excellent Default Alive essay by PG.

This confusion is roughly what the seed market looked like 11 years ago, before YC started. One of the things I noticed when going through YC was that the process by which a seed was raised had become more of a science. There was a bad way to talk to investors, and a good way. There were numbers to focus on that would make your company look good, and numbers that would confuse investors. You can see a lot of these lessons in the way YC companies build their demo day decks. We’ve tuned that over the years to best communicate what investors need to know to decide whether or not they want to have another conversation.

Now we’re going to experiment with turning the Series A process into more of a science.1 Our goal is to increase the rate of successful Series As for YC companies while improving the quality of those rounds.2 At the same time, we want to make sure that VCs are hearing the right pitches from the right people, at the right time. We’ve talked to plenty of investors who complain that they’re getting half pitched by founders who don’t really know what they want. That’s bad for everyone.

While we’ve only just started running companies through this program, we’ve already started to see results. We don’t yet have enough data to quantify the impact of what we’re doing, but our early anecdotal evidence – seen through speed of process and quality of outcome – is significant and positive.

Not all YC companies will go through this program. Naturally, participation is optional, and companies will be able to engage with some or all of the pieces we’ve built. Some companies will just look at our deck library, while some will spend time with us over months to create the best outcome possible.

The way we run this program will change and improve over time. We’ve seen that even a little bit of thought at the beginning of raising a round has a big impact, and we’re hoping to have an even larger one as time goes by. As we expand the program, we expect that this focus will improve the overall quality of companies raising As. We think that’s good for founders and for investors.

Notes
1. FRC has been doing something similar for a while with their Pitch Assist program. We think they’ve done great work, and hope to build something that works at our scale.
2. Where quality means better investors and better terms.