handshake protocol

Dalton Caldwell explains how investors can build a clear process for evaluating startups, from setting a budget and qualifying companies to deciding when to invest or pass. He argues for independent criteria and personal conviction, and warns against groupthink, indecision, ghosting founders, and making commitments without following through. He recommends founder meetings that begin with basic questions, focus on listening, and assess trust and growing conviction. A mock meeting with Necto illustrates how to understand a complex business, while the Q&A covers practical fundraising and investor situations.

Carolynn Levy and Kirsty Nathoo explain how Y Combinator’s SAFE works as an early-stage investment instrument, including its valuation cap, conversion math, and what happens in acquisitions, failures, or when a company stays private. They walk through a cap table example to show how options pools and later investment affect ownership. They also cover signing and reviewing SAFEs, protecting investor rights, and modeling possible outcomes. Their closing advice is to support founders, tolerate pivots and failure, and be patient.

Geoff Ralston previews Y Combinator’s four-day Investor School, which teaches the basics of angel investing, including evaluating founders, understanding investment mechanics, and building a portfolio. He advises investors to meet many founders, seek deal flow, make thoughtful decisions, and be clear and kind when declining. Good investors respect founders, understand the limits of their own influence, and invest with conviction while accepting that a startup investment may be worth zero. The course also covers changes in early-stage funding, including accelerators, online investment platforms, and ICOs.