Hi there π I'm Elizabeth co-founder and General Partner at Hustle Fund. AMA
Elizabeth Yin
87 replies
I co-founded Hustle Fund, a pre-seed fund for software entrepreneurs. Previously, I was a partner at 500 Startups, where I invested in seed-stage companies and ran the Mountain View accelerator.
In a prior life, I co-founded and ran an ad tech company called LaunchBit (acq .2014).
Let's talk about startups, founder mindset, and more.
AMA π
Replies
Ryan Hoover@rrhoover
Product Hunt
Elizabeth! You know I've admired you and the Hustle Fund's approach for a while. I'm curious how your strategy or process has changed since starting (and scaling!) the fund.
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Hustleverse
@rrhoover Thank you Ryan -- that's really kind! And likewise, I admire all you've built w/ this site and Weekend Fund!
Because we now have a lot of portfolio companies (300+), we've had to spend a lot of time on scaling. Processes, technology, and scope. In the beginning, it was @ericbahn and I running around kinda doing everything haphazardly and working w/ our companies 1:1. That was fine when we had even say 50 companies but then it got really challenging.
We now do a few things at scale:
-we encourage founders to help each other on Circle and we'll weigh in too
-we run programs / workshops to help a lot of ppl at once (mostly with growth via our Redwood School)
-we do a lot more async; I record a ton of Loom videos that seem to address people's qs in a faster way
-we hacked together our own technology platform to keep track of things in a more systematic way. Our principle Will Bricker built our triaging system to triage deals quickly and also our system for doing deals quickly. With just a few clicks, we can send out a SAFE, a clear to wire email, and collect onboarding docs for our auditors.
There have been growing pains along the way esp when each of these initiatives were in it's infancy, but it's neat to get scale as a VC.
Product Hunt
@elizabeth_yin1 appreciate you sharing. I knew you had a ton of investments but 300+ is wild!
Tettra
Are there any cornerstone lessons you learned as a founder that you make sure to pass onto every one of your portfolio founders?
Hustleverse
@andygcook Ooof -- so many tough lessons! Probably the big one is around people management -- esp when you're pivoting or experimenting with a number of things. Employees feel whiplashed around, and no one likes their work thrown out, when you're pivoting or are not sure what the right direction is. Spending a lot of time communicating this framing is really important when you're pivoting for team morale sake.
Hi Elizabeth, good to see you starting it here. I am following your work for many years now, just dropping in to say Hi. :)
Hustleverse
Hustleverse
@elizabeth_yin1 Talked to my mom just now, she is disappointed you didn't become a doctor, like your mom.
Is there an ideal timeline for startups to go from pre-seed to seed that investors look for when deciding to invest?
Hustleverse
@leeconstantine No hard and fast rule, but the fastest companies tend to go from product to $1m in < 1 year. More typical for good companies, $1m in < 2.5 years. So working backwards, if you raise a pre-seed at no revenue, under this timeline, you might be raising a seed in 6-12 months.
But, again, there's no typical, and sometimes it takes a while to figure things out. If you have to pivot, I would say your "start time" on the idea was post-pivot and don't incl all the other time you spent on other ideas.
Love the fund structure @elizabeth_yin1. Read through the guidance & FAQs (do you know you get a mention π
) and it feels like you're taking a much more qualitative, partnership approach. Weirdly it seems very close to AmplifyChange's approach tbh (totally different kind of fund ofc)...
My question:
> Once you've settled in with a new startup - say 3-6 months - what's the one trait that tells your gut whether you've backed a winner?
Hustleverse
@jimbomorrison I think 2 things are impt. Founding team and more importantly market pull.
In 3-6 months, you can learn a lot about the founding team. Do they execute with speed? Can they hire well / attract talent / do ppl want to work for them? Can they learn new skills? Are they focused on 1-2 things? etc.
But you can't always learn about whether the idea has market pull. It may require a lot more learnings and pivots along the way which could even take years. Market pull is a combination of understanding why customers buy? If the problem is really dire / urgent to warrant this solution? And if there is a seemingly repeatable channel to get more of that customer.
@elizabeth_yin1 Fascinating, thanks Elizabeth. Really appreciate you taking the time to come back to me. Best of luck with the fund! π
Seeing what's happening rn in the world many American funds turn away from Russian and other post-soviet founders. Do you personally count nationality such as Russian being a red flag?
Hustleverse
@ivandothetrick We do not hold Nationality from anywhere against a founder. We cannot invest in Russian incorporated companies.
Hi @ivandothetrick π I am Moiz, founder of https://grandeur.dev. Barging in the conversation because I have been there (almost, originally based out of Pakistan).
In my experience, nationality doesn't really matter (we raised from multiple US VCs). But the location of core team matters. For starters, incorporate in USA. It will open so many doors for you (particularly, if you are a global company, like targeting US users). But if you are solving a local problem (e.g. Uber of Russia), then it is actually much better to raise from local VCs. Because local VCs will help you solve a lot of regulatory problems in long run.
@elizabeth_yin1 I meant Russian founders in the US obv. Not investing in Russia-based enterprises. But I guess I got the answer. Hope to see more talents from post-soviet space in your portfolio then β
@moizhusnain We are the venture studio based in New York scouting at post-soviet space and trust me I've seen it all. My question here is based on experience of hundreds of founders I met in person. Post-soviet founders is highly underrepresented cohort not even recognized here as one and now it's getting even worse.
I think @elizabeth_yin1 told the truth, at least the one she believes in. But I will truly believe in it when I see these talented founders among The Hustle funds deals. So far the % of founders coming from post-soviet countries getting here pre-seed funding is catastrophically low.
Great to meet you, Elizabeth! @elizabeth_yin1
I'm Stefani, a PM at Ultralytics. We're creators of YOLOv5, the state-of-art AI for object detection, used by hundreds of thousands of developers in the world! https://youtu.be/Zgi9g1ksQHc?t=44
We're preparing to launch Ultralytics HUB, a YOLOv5 no-code deployment platform, and are actually planning a Seed round soon.
I'm curious to hear some memorable situations that have stayed with you during pitch sessions throughout the years. It could be good or bad, whatever you'd like to share. :)
I'd love to stay connected!
Hustleverse
@stefani_kovachevska this is probably the most unusual pitch I've received as an investor: https://twitter.com/dunkhippo33/...
@elizabeth_yin1 Awesome, they really did their homework and connected the dots creatively :) Thanks for sharing!
Hi Elizabeth! Thank you for starting this wonderful startup life thread. I'm always telling folks: you never lose when you launch a business. Entrepreneurship is the best personal development program out there! You tap into your brilliance... level up your skills... and build strong resilience, tenacity and persistence muscles. If the business doesn't work out, you'll try again OR you'll bring these outstanding transferrable skills to your next gig.
Hustleverse
@andelyons Thank you, Ande and yes! Lots of ups and downs (and mostly downs), but so much personal development and growth I wouldn't trade for anything else.
Elizabeth. Your fund looks amazing and your story is really cool. Having been a founder and then a seed stage investor will make you a super start pre-seed investor. Plus you cant go wrong with "Hustle Fund" as a name. I would love to set up a call to discuss your fund.
Eddie
Hi Elizabeth. Thanks for connecting. I think we follow each other on Twitter.
What are you working on at present?
Mark
Hustleverse
@imarkphillips Building out Hustle Fund! Hustle Fund is fundamentally a company. We started with our VC firm, but we now have many other business lines run by other GMs. Our mission for the company is democratize wealth via startups by impacting capital, knowledge, and networks.
We have 20 people now working on programs like Angel Squad (our angel program), Hustle Fund Scale (our late stage angel program), Redwood School (our growth school) 3 crypto initiatives, and more to come. It's fun!
Nook Calendar
Hey Elizabeth! Thanks for doing an AMA :D What are some personality attributes you look for in founders you're thinking of backing at the Seed stage? Is that a factor in decision-making?
Hustleverse
@sanja_mitar Re: founder traits - hustle (as I define as execution with velocity), focused on just 1-2 things, experimentation mindset, customer-centric, able to learn new skills, and frugality.
How should founders be thinking about mental health?
Hustleverse
@bradley_miles_ This is a big topic and probably not one I can do justice to here! :)
That said, I think it's impt to schedule time to rest + reflect to help with mental health (and burnout). I believe that founders should take (most) weekends off (obviously there will always be sprints).
Cut back a LOT to focus on just 1-2 that matter.
And also schedule in time to rest at least 1 week per qtr. It doesn't have to be a fancy vacation. Just time to think about other things and decompress.
I think this helps a lot with mental health. When people are exhausted, they don't have the fortitude to overcome challenges. (This is also why depression is linked w/ lack of sleep).
I'm no therapist, and I realize that all of what I just wrote above is tough to do, but I do think if founders add it to their calendar, it will force ppl to do it -- just like any other meeting.
Hi Elizabeth, I've been following you on Twitter and YouTube. You're awesome π
Hustleverse
@evgeniyantoshkin Thank you Evgeniy! That's really nice of you!
Undefeated Underdogs Podcast
Thanks for doing this AMA, Elizabeth!
As an investor, you must have gone through a million pitch decks and talked to many founders so what mistakes do you think they can avoid?
Hustleverse
@5harath Haha -- too many. At this point, I've seen 30k-40k pitch decks in my career - yes.
However, the big buckets of pitfalls:
-sell the dream but be honest (sometimes ppl will put logos on their slides for customers or investors when they haven't closed yet); make sure it's clear between what has been done vs what you are working towards
-don't dive into too many details on your deck; you can always answer investor questions in a conversation but you don't want some minutia detail to prevent you from getting a mtg; e.g. I'm raising $2m (when you'd be open to raising $500k) -- an investor just may say it's out of scope
Hi there Elizabeth! One question I always ask at the end of any pitch or discussion I have with potential investors (and more often, customers) is: What do you need to see from us/me/my product in order to have conviction to buy/invest.
From your/Hustle Fund's perspective, what do you look for in a company or founder to build such conviction enough to invest or start helping them?
Hustleverse
@aleksdahlberg I basically take guesses on whether the idea will have market pull in the long run.
More here on how I make that guess:
https://twitter.com/dunkhippo33/...
We invest at pre-seed, so there's rarely a situation where we will say no and re-evaluate and invest a few months later. My guess could just be completely wrong (and often is) and I won't know for years.
That said, from time to time, we may change our mind a few months later if there's been strong uptake in customers, and if we were already on the fence about whether there could be market pull the first time we evaluated it.
@elizabeth_yin1 Awesome thread thanks a lot!
Great to connect with you Elizabeth! I will definitely check out Hustle Fund π
Hustleverse
Hi Elizabeth - I think it's awesome that you have experience as a startup founder yourself. How has that experience impacted how you invest? Which role is harder - founder or investor?
Hustleverse
@webb_knudsen1 Oh gosh - I think both are hard (with the caveat that the investor role is as an emerging VC fund manager). For both, you have to do 2 things that are particularly challenging:
1) Marketing / customer acquisition.
2) Fundraising
Both are just hard activities to do. As a founder, I thought that being an investor would be way easier, but we do way more fundraising mtgs than any of our founders. And our B2B lead generation process is very similar to what I've done before as a founder.
One thing that I think is a lot easier in being a VC, though, is that you don't have to manage people or as many people. And that's also really hard. For startups who get off the ground and get to scale, people management (and recruiting) becomes a real nightmare...because well people... :)
@elizabeth_yin1 great and honest answer. Thank you!
Thanks for sharing about you @elizabeth_yin1 . We have launched a startup(buy/sell app) and we have crossed 80K downloads now. With growing users, we want to scale our startup but we haven't developed our business model yet. We are still bootstrapping the product but we want to pitch it to the investors. Can you please share how to develop a business model for the platform? You can search GilgitApp on Play Store for more details. Thank you.
Hustleverse
@ehsanullah_baig Unfortunately, this isn't something that I can answer. This has to be founder-driven based on your own customer development and talking w/ your own customers / users.
I think in most other models I've seen of marketplaces, they charge a % in between, so perhaps that's a model to explore. But you can explore all kinds of models -- SaaS model for power users. Or maybe your own token if you make this app decentralized.
Regardless, I would message 20 of your customers and call them to learn why they picked your app, what they hoped to succeed with it, and learn about their willingness to pay (and in what way). Just my $0.02.
Hustleverse
@edgar1 I would take a step back and think about:
1) Are you still excited about doing a startup?
2) If so, are there other problems (with the world wide open) that you are excited about solving?
3) if so, perhaps do customer development in those other areas
Sometimes people need to take a break, make some money, and then get back at it. Finding product market fit is hard (and a lot of luck IMO), and sometimes you just need to reset a bit.
@elizabeth_yin1 Thanks for your answer! I will definitely get to thinking this weekend. Definitely still excited about doing a startup just need to think about everything