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Kirsty Nathoo

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29
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2015-09-28
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2015-09-28
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  1. “I mean, I think really it's more in the sort of the types of investments. It's absolutely fascinating some of the biotech companies that we're doing. And we have these companies who are coming in that really could change the world. We've got companies who are coming in looking at being able to identify cancers earlier, looking at being able to figure out what the best cure for Alzheimer's is or for cancer or for whatever. And there's just so much. So much possibility there that of changing the world. And, you know, it's something that YC still gets criticism of that they think that, you know, we have all these companies that are sort of doing ditsy social apps or whatever it might be. But no, we have these companies that are going to change the world. So that's what gets us excited.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Oh, it does, it feels like it's choosing my favorite children. I have like 900 children. I can't, no, I'm not going to pick one out for you. That would be too much.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Wow, that's a really difficult question. Yeah, even if you ask me at the end of a day of interviews, it's kind of hard to say that. I mean, I think the best interviews that stand out for us are the ones where the founders have such a clear vision that they can articulate the answers so quickly and easily that they, you know, we come out with just this, wow, we are blown away with how amazing these founders and this idea is.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “I think the thing that we worry about the most is that the best companies won't want to come through YC. So I think the biggest challenge is that those companies decide they want to go somewhere else or do something on their own without having YC's help.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “We have various different ways. One, the most important thing is whether they've invested in YC companies previously, but then we also have a lot of other people asking to attend who we will give the benefit of the doubt to and we'll invite them for one or maybe two demo days and then hope that they invest in some of our companies.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “This is something we talk about a lot, not necessarily why I see Europe. We think about China and we think about India a lot. It's something that we haven't figured out quite how it would work yet. But in our immediate timetable, we want to focus on what we do best and what we do best is getting the best companies into the program and helping them to become the best companies in the world.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “No comments, unfortunately. You know, there's a lot of new things going on where, you know, we're still looking at funding all of our companies. To the 120k that we put in, we're looking at growing potentially that. We have our new YC Fellows program that we're trying out that's just kicking off. We have lots of new things in the pipeline.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Of the sort of financial side of things, but because it's part of the financial health of the company, it still needs to be known.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “I think there's two things. I mean, the two main things are setting up payroll and making sure that you get tax returns filed. There's a huge amount more that can be done. Those two are the kind of almost external reporting things. Obviously, there's a lot of internal reporting. You know, the founders should be able to tell off the top of their head at any one time how much money they have in the bank, what their runway is, what their growth rate is, what their burn is, you know, and so their burn being the net of how much money they've got in compared to how much money is being spent out. So there should be tools for them to be reporting that and know that just every day they should know that. They should be looking at that. So that's, you know, and that's more internal because it depends on the company and, you know, the metrics they're looking at depends very much on the company. So that's less.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “and the first thing the lawyer says is well how much have they paid you? And if the founder said, well, I haven't been earning any money, I haven't had any salary, then the lawyer says, oh, well, we can go against them for employment claims. You're entitled to the minimum wage. And so suddenly the company is under a, has all these problems around all these claims. So, you know, we're very clear that people should pay themselves at least minimum wage, which for San Francisco works out around $2,000 a month and use that for their personal expenses. So that's something, again, that we are very keen on seeing people do. And, you know, there's sometimes reasons why that can't happen, but generally that's our advice to pay yourselves, to set up payroll, don't just pay, you know, don't just transfer money into actually do it.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, you see that's kind of a grey area. It's not straightforward. Generally we say to our founders in the very early stages is that expense the rent for the apartment if you're working out of it, but know that it's not 100% right and know that you're going to have to change it. And as soon as you start raising money, you're really going to need to get your own office. And so you'll be paying rent on the office with your business as money and then you'll be paying rent on your apartment with the money that you pay yourself. And that's something that where we also drill into the founders from very early stages is that they must pay themselves. Everybody must be paid a minimum wage because again we've seen issues in the past where founders are they break up and it's not a happy, it's acrimonious split and the first thing that the departing founder does is go and talk to a law.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Deal with that, and founders have left companies as a result. And we try to explain to founders that there are business expenses that are obvious business expenses. So, you know, your AWS hosting bill is obviously a business expense. But then there's this gray area of things that may or may not be business expenses.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Sure. I mean, we take this very, very seriously. You know, we drill into the founders many times that this is not their money. And the investors have basically, you know, they're expecting miracles out of these founders. They're expecting them to take a small amount of money and turn it into a huge amount of money. And so, you know, we are very, very serious that the founders should be using this money to further their business. And the stories that we've heard where founders have not done that, we have taken very seriously and we've taken steps to stop it. I mean, I guess I would not describe them as funny stories because actually it's really bad if people are spending investors' money on things they shouldn't be. We have had situations where that has happened. And we've taken steps to”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “drives the dilution as much as the amount they actually raise. So we're trying a lot to educate the founders in that. But again, it comes back to this problem of, you know, they see it as being competitive. And so, you know, they see another company raising at an $8 million cap. And so they want to raise an $8 million cap. Again, it comes back to the investors making their own decisions. And at the end of the day, the investors want to be investing in the next Google, the next Airbnb, the next Facebook. And if they believe that this company is going to be that, then they should want to put their money in at pretty much any price because a slice of a huge pie is better than no slice of a huge pie.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “I think it's necessarily easier to raise money. You know, investors know what they're looking for and they know when a company looks like it's going to be doing something interesting. I think what YC does give these companies is it gives them a seal of approval. Somebody has already looked at them once. We've worked through with them to figure out some of their questions, some of their problems. And the investors know that we are always there in the background. We always have the founders back. So it's more of a badge of approval. But then the investors go in and they talk to the founders and they do their own diligence and it's up to them to make their minds up themselves. We don't get involved.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “I think the hardest thing is that people see fundraising as a competitive thing, which it totally isn't. You know, some companies can take 250,000 dollars and get to profitability. And that's great for them because then they're in this amazing situation where they don't need any more money. And then that's exactly when the investors start to get interested in them. Other companies might need three, four, five more million dollars to get to that stage. So it very much depends on what kind of company you're actually making. But the founders definitely compare themselves to each other and see it as they're failing if they haven't raised much money.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Yeah, I mean, there's some elements of looking at run rate. We always say to our founders, you know, have sort of a plan A, a plan B, and a plan C. And, you know, if you raise a small amount of money, this is what you'll do with it. This is, you know, you maybe you'll only hire one new engineer. Maybe you'll work to get to this specific place in the product roadmap. But if you hire a little, if you raise a little bit more, then maybe you can hire a couple of more engineers. And you can accelerate that growth. So it's always a case of figuring out where you are in that spectrum of money being raised.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “They see it fundraising as a sign of success and they say, oh, I've only raised $250,000. I'm a failure. I need to go and find more money to fundraise. And that's actually totally not the case. Back in, again, back in 2010, 250,000 dollars was a successful raise. And so, you know, people spend all their time and effort trying to raise more money and forget about the product and then forget about working on growing the product. And so their growth flat lines. And then investors are even less interested in them because there is no growth there. And so it's very hard to get that message through to people that there comes a point where you just have to say, this is the money I have. I'm going to take that money and I'm going to go back into my product and I'm going to make something amazing.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “You know, I think the biggest mistake that we see founders making whilst they're fundraising is, well, actually it's one of two things. The first thing is not knowing when to stop. You know, there comes a point where the interest dries up. And at that point, the founders should just say, okay, we've raised X amount of money. We're now going to go heads down back into our product, and we're going to take that money and we're going to build something that just has the most, you know, all this amazing stuff in there that people really love. And then as people really love it, the growth will come. And then as the growth comes, it will be easier to raise more money down the road. And we say that so often to the founders. But what the founders do and hear or, you know, don't hear maybe.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Yeah, I mean, it changes fairly significantly with each candidate just because what we're talking about is very different. The kind of questions you're going to ask a company who is working on trying to discover a cure for cancer is very different to the kind of questions that you're going to ask a company who is doing the latest social network. But having said that, the things that we're interested in are all around how big does this get? How do you get your first customers? How do we know that what you're building is something that people actually want or need? So there's a framework there, but then the conversations go off in very different directions. And one of the indicators that we look at at the end of the interview is have we learnt something new? Have the founders thought about it enough that they've told us something that we didn't know before, which is always very interesting.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “And if there's a little seed of determination and toughness in there, we can work with the companies to bring that out, to bring that out of the founders. But if that's not there in the first place, we can't create that for them. So, you know, a lot of it is very much, like I say, the personalities and the founders actual themselves. I mean, in terms of pattern recognition, a lot of it is for us, it's kind of gut feel as well. You know, we have a 10 minute interview and it's amazing how much you can learn in that 10 minutes and how much.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Yeah, I mean we look for specific things when we're choosing the companies that we want to invest in. And I'm involved in the review of those companies and the interviews of those companies. And from our point of view, very much the strongest indicator that we look for is the team. Are the team very close knit? Do they know each other well? Are they determined? Are they going to, you know, we don't want them to give up as soon as things get a bit tough. We want them to say, okay, this is tough, but how are we going to figure it out? And that's so important for us. And obviously, you know, we're looking at companies that are very, very young, very early. And so the idea is important and the market they're working in is very important. But, you know, ideas can change. Markets can change. But teams can't. People's personalities generally don't change that much.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “President, we really accelerated our growth there. We had so many different plans from taking in more hardware startups, from taking in more biotech startups to our new program, our YC Fellows program, where we're taking people in who are sort of slightly too early for YC itself. So we're really focusing on lots of different things now.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “And also, you know, as we've grown, we've taken on more partners, we've got more bandwidth to be able to help more companies. When I started, it was kind of family business, really. Paul Graham and Jessica and then Trevor and Robert, it felt like a small family business. And because they'd started it from this mindset of, oh, we want to learn about startups ourselves. So we'll invest in a batch to kind of figure out what all the problems are and see how we can help. It was a slightly different mindset. So then as we started to grow and take more partners in, it became a different, the mindset and the aim of the organization became very different. Now our aim is to basically help the world by helping startups to do amazing things. And especially when Sam came in as”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Well, the first batch that I was involved in was winter two thousand ten, and that had, I think, twenty six companies in it. So now our last batch we had 114 companies. So it's grown beyond recognition. I think if somebody had said to us in winter 2010 that we would be doing this in five years time, we would all have just laughed them out of the room and said not a chance. So, you know, it's kind of it's grown. Unexpectedly, I suppose. And a lot of that is because startups have become much more acceptable for people to take the risk to do them. And, you know, I mean, a lot of this is, you know, are we the cause or are we the effect? It's a bit of both”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “It was incredible how much trust was placed in me straight away. You know, I had control over all the bank accounts. I had access to absolutely everything. And I think in that respect, when you give somebody so much trust, it makes them more trustworthy. So I took the responsibility very, very seriously. And, you know, I was very keen to make sure that things were right and things were good. And, you know, it became a real. Personal sort of role that you know i wanted to do things properly because they'd put so much trust in me um and then as things grew with y combinator i gradually shed different different responsibilities onto new teams and so we created an events team and we created an operations team and things like that so then i could just focus on the finance side of things”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “And set up in San Francisco. And at the time I was actually not only looking after all the finance for Y Combinator, but I was also doing everything else. I was looking after events. I was dealing with making sure that our Tuesday dinners had food. You know, the whole work taking out the trash at the end of the night.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “So he knew them and he'd spent three months over in Mountain View for the batch in winter 2008 and came back and said we must move to San Francisco. It's the center of the world. We just have to go. And it actually took a while to figure all that stuff out. It was terrible timing in terms of the economic collapse. So it was actually really hard to figure it all out. But luckily, Amir, my husband, was talking to the original YC founders who were just starting to grow, they'd just started to kind of take a little bit outside money and things were changing and getting more complex. And they needed somebody to help. And I had the necessary skills and I was ready to jump on an aeroplane and move over there to start. So I had kind of a three-week window to close my life in Cambridge.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Well, I guess when I moved, the move was not to move to be the CFO at the world's most successful accelerator. It was to move to be, to take up a role kind of doing everything at an accelerator that not a great deal of people had heard of, which is very interesting. I worked in PwC, Cambridge with a lot of tech clients. So I was working with a lot of VC-back technology companies that were spinning out of the university and that were based sort of around the southeast of England. So I was always involved in startups and understood technology and the things that they were, you know, the problems they were having. But the way that I actually got involved with YC and made the move over here to San Francisco is actually through my husband who is a YC founder himself. He was funded back in 2008, his company.”

    2015-09-28 · The Twenty Minute VC · 20 VC 075: Y COMBINATOR WEEK: Kirsty Nathoo, CFO @ Y Combinator · IDENTIFIED FROM THE TRANSCRIPT · source