Silicon Valley's most famous startup training program just scrapped its famous 'Demo Day' founder pitches and will instead make startups submit investor-friendly slides
Y Combinator's rite of passage, the famous 2-minute pitch to a room packed with potential investors, is the latest victim of the coronavirus pandemic.
Startups that are part of Y Combinator's "accelerator" program, which includes coaching and seed stage funding, learned last week that this year's Demo Day was going virtual. Instead of presenting their fledgling business ideas in front of a crowd, the startups would submit video recordings of their pitches for investors to watch.
Now, Y Combinator has decided that it will do away entirely with the custom of founders talking up their business at this year's Demo Day and that startups in the program will not even make pre-recorded video pitches. Y Combinator will instead feature individual slides about each startup for investors to peruse on a special Demo Day portal.
"Through the website, investors will have access to a single-slide summary, a short description of the company, and a team bio. They can sort companies by industry and geography, and will be able to export the list of companies to a spreadsheet," Y Combinator President Michael Seibel wrote in a blog post announcing the changes Tuesday.
Y Combinator justified the change as part of an effort to speed up the pitch process because investors are moving fast to make investment decisions.
"As we shared on Friday, we know startup investors will continue to support our newest batch - just as they have for the last 15 years. The activity over the last week has shown us that the community surrounding YC is as strong as ever," Y Combinator President Michael Seibel wrote in a blog post announcing the changes Tuesday.
A sharp break from tradition
Since it began 15 years ago, Y Combinator's startup program has seen some of Silicon Valley's most famous names pass through it, including Airbnb, DoorDash and Stripe. The new format of the Demo Day ritual this year will represent a big break from tradition and a curveball for startups looking to attract the backing of powerful VC firms.
Without prerecorded pitches, many founders have turned the focus back onto their companies instead of working out the perfect pitch. It has also changed Y Combinator's timeline - the accelerator announced that the slides would be available to investors starting March 16, a full week before the originally planned Demo Day and its virtual replacement.
"Demo Day moving online, I really see that as a positive for us," Motion cofounder and CEO Harry Qi told Business Insider. Motion is among the accelerator's current batch and was originally planning to present in front of thousands of investors on Demo Day in San Francisco.
"We have more time to work on the startup instead of having to fine-tune the presentation. I probably would have to spend five hours to make it perfect, but now I can just build and code more."
But both investors and founders have started to question the logistics and value of Demo Day, which had to cover two full days of pitches in September to accommodate the growing batches of startups that made it through the program. In its earliest days, founders would pitch cofounder Paul Graham and a handful of outside investors in small rooms in Boston and Mountain View. As the accelerator's acclaim has grown, so too has its batches of startups. To stand out against the noise, many founders have started pitching investors before Demo Day even begins, and some have signed deals before stepping out onto the stage.
Although Y Combinator has said investor interest remains on par for previous Demo Days, there is a not-insignificant chance that many startups graduating from its most recent program may not see their funding targets either because they were lost in a 250-slide deck or because they did not meet investors before San Francisco became a coronavirus hotbed.
Either way, the fate of Y Combinator's 2-minute pitch format, the likes of which have minted breakout hits like Airbnb, Stripe, and Coinbase, is now up for debate. It will be up to this batch, Y Combinator's biggest ever, to seal the deal.