Is a Demo Day Pitch Enough Info?

I disagree with a much believed topic in Venture Capital. 

Most investors argue that the standard Demo Day pitch does NOT have enough information to make a good investment decision. For Boost VC, the time limit has shrunk from 7 minutes, to 3 minutes, to roughly 90 seconds. I think YC might even have shorter times now. In the digital era, demo days have changed and shifted, but even online, founders get 60-90 seconds to describe their company.

So, is there enough information in a 90-second pitch? Can you make a decision after 90 seconds?

With nearly 100% accuracy, my Dad is able to view a YCombinator Demo Day, and choose which companies will not succeed.

I found this out in 2017, when I was cleaning out my apartment to move to a house. I stumbled across the list of companies from YC demo day in 2012, and it had my Dad’s handwriting all over it. 

My dad had given each company a number: 1,2, 4, or 5. Across his 35+ year career, he’s created a shorthand for grading pitches: rate them from 1 to 5, no 3s. So, I did what any person who’s cleaning up in order to move does… I decided to figure out how well my Dad performed.

There were 66 companies that pitched on YCW12 Demo Day.

  • My dad ranked 24 companies either a “4” or a “5.”

  • In his 5s: Amplitude, Gusto, Make Games With Us

  • In his 4s: Wave, LendUp, Rescale, MatterPort

Taken together, these “4” and “5” companies now make up nearly $2B in funds raised. And that list doesn’t include some of the smaller exits that also ended up in that upper tier, including SocialCam and Swiftype.

Now, here’s the part that makes me think a demo day pitch has enough information in it: my Dad was very quickly able to filter out two-thirds of the batch, immediately making the pool  more approachable and easier to digest. In the 44 companies that he filtered out (with a rank of 1 or 2), he only missed on Plangrid (acquired for $850M). So, with nearly 100% accuracy, my Dad was able to filter out the founders who were NOT ready for one reason or another.

Of course, my dad’s 35+ years of venture capital experience probably gave him some algorithmic edge. But the point is, yes, in every 90-second pitch, there’s enough information to filter for success.