The Secret That Silicon Valley's Top Investors All Share

Dalton and Michael point to investment counts as evidence that prominent firms invest in YC companies. They cite 234 investments by a16z, 139 by Sequoia, and 104 by Founders Fund.

Dalton says VCs often pass because a startup is too early and lacks enough evidence to stand out. YC screens thousands of applications, helps selected startups stay funded, and advises them on sales, pitching, and pivots, giving later-stage investors more signal.

Michael compares YC to a supplier that selects and prepares ingredients for restaurants. The speakers say VCs may prefer to meet founders first, but limited deal capacity, conflict concerns, and lack of early data make it difficult to invest in every promising startup at the earliest stage.

The speakers say seed funds often seek substantial ownership in a startup’s first round, their main chance to invest before later rounds dilute their stake. They note that startups after Demo Day may command valuations of $15–25 million, compared with $5–10 million for companies found earlier.

Dalton advises founders to consider whether someone giving fundraising advice is actually offering to invest. A concrete offer deserves serious consideration, while advice to delay or avoid other investors may reflect the adviser’s business incentives. He suggests comparing investors’ actions with their public comments.