On Adam Hardej & Demo Day Investing

Into the Chaos of Pre-Demo Day Investing

What's it like investing in a YC company during batch you ask? It sucks, it's the worst experience, it hurts, well actually, kinda hurts so good, its kinda fun, I'm kinda into this, who knew this was my thing? This, my friends and assorted people filtered by big tech algorithms that landed here, is what must have gone through my buddy Adam Hardej's mind when he started doing the "Best of YC" mini-funds.

For those who don't know Adam, have lived under a rock with no cell service, and generally hate high-quality niche venture capital memes, Adam is, for lack of a better term, the king of pre-Demo Day investing. You ask, John - I subscribed to your substack because I thought you were cute, and you wrote an article about music and the brain; why are you writing about your other male model friend Adam, who works in a funky offshoot of finance and media? Why, you ask? Adam's job is worth writing about - it is absolute chaos, mania to heights beyond what the Manson Family might have experienced.

Adam's job is to sometimes find hundreds of unannounced startups inside the top accelerator in the world for early-stage companies, known as YC. YC accepts roughly 1-2% of applicants in 6-month "batches", (they get over 10K applications per batch). These companies usually don't announce that they got into YC, so the only way to know who they are is to network your way in. Getting the conversation with a YC company is half the battle; now Adam has to assess all the companies, sometimes in a week or less, and write a check into the ones he believes in. What's the rush? Demo Day. 

Demo Day is when all the companies present, and the best investors in the world are invited to hear the pitches and then invest; at least, that's how it's supposed to work. These days, investors are finding the companies before Demo Day, like Adam, and writing them checks before anyone else can, so when Demo Day comes, sometimes investors have limited options on which companies they can invest in. We investors fight over 50K allocations pre-Demo Day, and some of these startups may only be taking 2M of financing, most of which is already spoken for when you meet! 

Side note: I was once invited to demo day; I called a close friend who does not work in tech or VC, explained I was going to Demo Day, and he said congratulations and asked what I was demoing.

To review: Adam has two weeks to find some of the best startups in the world that have no public information about their affiliation with YC, get meetings with them, secure allocation, aka a right to invest, and then he has to pick which ones he is actually going to invest in. At the beginning of the article, I talked about how Adam's got to have a thing for this, as no sane person would do the job he does? Well, now you understand; at least you get a taste of it. 

Me, you say? I dabble in pre-Demo Day investing, but only when someone calls me and asks me to meet with a company because they want my opinion; I rarely do outreach. I just don't have the desire to put myself through that again; I did one batch, took 60 meetings in 5 days, lost the rest of my hairline, and ended up meeting with quite literal rocket scientists, trying to understand their product (rockets).

Now, I sit in my rocking chair (I'm about to go full Keroac's last paragraph of On The Road), watching the long, long skies over Washington DC, sensing all the rolling beauty that lay in the hills of San Francisco. There's nothing but open roads and fields between here and the immensity of the West Coast. Between here and there are hard-working parents, working long days and even longer nights for their children to get a chance, a shot, at lives unencumbered by limiting societal concepts or personal debts. Between San Fransisco and me lies a land of opportunity, a place that, while all too often unjust and unfair, is our home. In this place, a dyslexic kid like me can grow up to chat with rocket scientists, genetic editing pioneers, and friends like Adam, all while knowing every single person I'm meeting with has earned their spot in our little startup world, they've fought their battles and chosen to pursue both their dream and our shared American Dream of making it on our own merit.