#60 - Startup Investor School Preview with Geoff Ralston

**Craig Cannon** (0:00)
Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with Geoff Ralston. Geoff's a partner YC, and before that, he co-founded Imagine K12.
So I met up with Geoff to talk about Startup Investor School. Startup Investor School is a free four-day course designed to educate early-stage investors interested in investing in startups. And if you're interested, you can sign up at investor.startupschool.org. All right, here we go.
So why don't we just start with the basic facts. So what is Investor School?

**Geoff Ralston** (0:34)
Yeah, so Investor School is a four-day class that we're teaching for the very first time here in Mountain View, across the street and in the original Y Combinator building 320 And it's a school that's going to teach the basics of startup investing.
So we hope people will come in person. We think there's a lot of demand, so we think we're creating a lot of folks who want to come, but also doing a live stream. We're going to make it a MOOC, a massively open online course, just like we've done in the past with startup schools. So we're really excited about the potential to give back a whole bunch of the knowledge that we've gained at YC over the years and how to be a really effective angel investor to the community at large. So we create more, better, happier angel investors.

**Craig Cannon** (1:27)
And what gave you the impression that folks needed a school?

**Geoff Ralston** (1:32)
Well, what gives us the impression that folks needed a school is we've seen lots of, shall we say, not so effective behavior and approaches to angel investing. And we're not being conceited in thinking that. We've seen it in ourselves.
Most of us have, one time or another, in the partnership at YC, been angel investors. And so we know all the missteps. We've done them ourselves. I personally have made so many mistakes, angel investing, that I feel, if nothing else, qualified to tell you a whole bunch of things you shouldn't do. So we're trying to help people avoid a lot of the pitfalls. And we're also, you know, there's ways to be a better investor.
There's ways to be a worse investor. And we think we can help teach people those. And so, again, make them better at their job, even if it's not a job, better at the discipline of angel investing. And that makes it better for the companies in whom they're investing.

**Craig Cannon** (2:34)
And is there a particular type of person you're looking for to participate in investor school? Like, do they need to have, you know, been an engineer and had an exit, or they just like have some cash that they want to invest? Who are you looking for?

**Geoff Ralston** (2:46)
Well, the one qualification is that you're an accredited investor. And the SEC has a set of rules as to what comprises accreditation, you know, in terms of income and wealth. As long as you're accredited, we want everybody. In fact, we actually think this is an opportunity to add greater diversity to the ranks of investors.
So, yeah, anyone who's accredited, which is a little bit the equivalent of what you said, is you have some spare cash to invest that you can afford to lose.
And, you know, you have to be honest about this. This is a very high-risk investing paradigm. So if you're going to invest in startup companies, you have to be prepared for extraordinary upside, but also a perhaps more likely downside.

**Craig Cannon** (3:40)
And are you giving anyone a certain criteria of what they should think about? It's like this is an approximate amount of money that if you're going to get started angel investing in the valley, you should be ready to start putting down, putting to work.
Is there a number that you have in mind?

**Geoff Ralston** (3:54)
I think we'll give some guidelines as to how to think about creating your portfolio.
Think about doing asset allocation across that particular portfolio.
But how much you invest is a very personal thing. It's sort of how much you will care about losing, how much upside you want to have, what percentage of a company it's important for you to own if you think about it that way. So I think the amount that people invest is incredibly variable. There are some minimums. Most people aren't investing $5,000 when they do angel investing. That does happen, but it's unusual. It sort of tends to be a minimum in the tens of thousands of dollars, up to a maximum of hundreds of thousands of dollars usually.

**Craig Cannon** (4:44)