Elizabeth Yin Profile picture
@hustlefundvc. Democratizing wealth via entrepreneurship. Entrepreneur-investor. SF Bay Area native. Sign up for my email newsletter at https://t.co/0huHlmbFJP
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8 Apr
Today's tweet thread is about how LPs (fund investors) make money (or don't) by investing into funds.

When do they send the money to the fund? When do they get money back? What are the fees ppl should be aware of?

thx @zsilvs303 for the topic!

Read on >>
1) First off - what is an LP? A limited partner is an investor in a fund.

@HustleFundVC for example, we have raised money from individuals, families, companies, and fund-of-funds. This is the money we use to invest in startups.

They are our LPs.
2) Next, what is the process to becoming an LP in a fund?

Today almost all US funds (if not all) require LPs to be at least accredited investors in order to invest. ($1m+ in assets or $200k/yr in salary)

A VC fund $10m+ can have 99 LPs max. Under that, 250 LPs is the limit.
Read 26 tweets
8 Apr
Today's tweet storm is on the strategy for testing customer acquisition channels.

Should you try a lot of channels? Should you try to make them all work? Which ones do you double down on? What happens if they stop working?

Read on >>
1) Yesterday I referenced a conversation w a portfolio co that is seeing great results w 1 cust acq channel.

Today I had a call w them about this strategy as well as what to do about their other cust acq channels.

2) At a high level, the most *ideal* situation is that you have just 1 customer acquisition method & channel. 1 playbook. People specialize & focus on the same thing day in & out.

That's the ideal. It doesn't work out that way, but that's what you hope will happen.

Why?
Read 24 tweets
7 Apr
PSA: If you are looking for your first shot of the Moderna COVID-19 vaccine, here's one way to get it

Note: no restrictions on pre-existing conditions or age brackets or citizenship

Read on >>
1) Some counties in Texas have a TON of extra doses but not enough people to vaccinate.

If you're willing to go to Lumberton (population 11k) which is < 2 hours drive from Houston is taking walk-ins for 18+ yrs old
2) At the Journey Community Church

1534 Highway 96 South
Lumberton, Texas

1:00PM – 4:00PM, on Wednesday, April 7 thru Friday, April 9.

Only a certain # of ppl can be inside the clinic at a time, so if too many arrive at one time, they may have to wait outside
Read 7 tweets
7 Apr
Today I was talking with a @HustleFundVC portfolio founder about how aggressive they should be with customer acquisition spend.

What customer acquisition cost (CAC) should they aim for? Payback period?

A thread on this topic >>
1) First off, I think a lot of founders think about what number they should aim for for their CAC.

I think this is the WRONG way to think about it. There's no holy grail number. But there are good and bad ways to think about CAC.
2) At a high level, your CAC must ALWAYS be less than your lifetime value (LTV) at scale - in order to have a real business!

The problem for startups is that you often don't know what that lifetime value is, so it's a moving target of what your best guess is. Refine as you go.
Read 14 tweets
4 Apr
Sometimes it’s fun to look back at what I wrote about the fundraising landscape of just a couple yrs ago and see what has changed.

A reflection on the fundraising landscape in the past 3 yrs >>
1) I wrote about ICOs, SAFEs, and crowdfunding in 2018 and my hopes for how it would evolve and change:

elizabethyin.com/2018/01/24/wha…
2) At the time ICOs were hot! Super easy for companies to raise.

I think today’s “regular SAFE” fundraising is like the ICO market of early 2018.
Read 14 tweets
30 Mar
Today's tweet thread is on cohort analysis. What are they? Why should you care?

tl;dr cohort analyses is a good way to know if you are actually getting better or worse with your business.

Most ppl look at revenue. Or product improvements. But cohorts are the way to go.

>>
1) What is cohort analyses?

It's a way to put your customers (or users) together in mini-groups and see if as a group your company is getting better or worse over time.
2) So for example, here's what a cohort analysis graph looks like:

Read 15 tweets
25 Mar
Yesterday, @MacConwell, @jefielding & I chatted about valuations yesterday on Clubhouse.

Some thoughts & takeaways from the discussion.

tl;dr: Valuation is NEVER about how much your co is "worth". It's about the price of your equity that you and investors agree upon.

More >>
1) As I like to say, valuations are about supply and demand. Supply of your round / tranche. Demand of investors. It's your job as a founder to generate that demand.

That's what allows you to command a higher valuation. Investors don't just naturally offer you a high valuation.
2) Investor demand increases when you have lots of investors circling AT THE SAME TIME.

It does no good to have 1 investor look now and then approach another investor later. Investors need urgency.
Read 13 tweets
19 Mar
Tonight’s short tweet storm is about pricing your product. (Assuming not free consumer app)

How do you know what price to set? How can you change it later? Etc

Read on >>
1) tl;dr

In the beginning don’t worry about optimizing your price. Just make sure you cover your costs.

Eg if there are manual onboarding costs, charge for your time
2) In general, setting a price - any price - is a huge leg up from no price.

Eg This is why I’m a big fan of paid pilots vs free pilots. Even if it’s a cheap pilot, it’s way better than free. Why?
Read 11 tweets
17 Mar
Today's tweet storm is on perseverance.

The path to growth isn't just up and to the right. There are often *lots* of plateaus along the way. Those are where ppl get stuck and want to give up.

This applies to your personal life and to your company.

Read on >>
1) We've all faced plateaus in our personal lives. E.g. Learning a new language but can only say hello. Or a new instrument or sport.

Or learning anything. Fun to try new things & get good at the easy bits. Chapter 1 in a textbook is always easy. The rest of the book is daunting
2) The same applies to startups and companies. The beginning is fun. You get some customers. Build a product. Get some learnings.

Getting that first $ in is always exciting!
Read 20 tweets
16 Mar
Yesterday I talked about my vision for crowdfunding -- where it can go, how the system can be really great, and how we can democratize fundraising.

Today, I'm going to talk about all the pitfalls that will happen before we get there.

Read on >>

1) Retail investors will get hosed.

There are two ways to get hosed.

a) The companies didn't succeed
b) Retail investors were not set up to succeed
2) A common q / critique I often hear about crowdfunding is "has there ever been any CF company who has done super well?"

And the answer is that honestly most startups *in general* don't do well. I do think we will see some CF companies emerge as big winners.
Read 25 tweets
15 Mar
Happy Monday! - today marks a point in history for crowdfunding. You can now raise up to $5m in the US as of today via crowdfunding.

Today's thread is about crowdfunding -- where do I think it's going? What does the future of fundraising look like?

>>
1) But let's first take a step back.

When you're building a co and you're looking to bring in a co-founder or employees or contractors, you're looking for a team of ppl who can help you advance the co the most.
2) Ppl don't normally think about it this way, but what you look for in investors is identical. Instead of trading time equity, investors trading money for your company's equity.

But money in itself is a commodity. One person's money is the same as anyone else's.
Read 16 tweets
13 Mar
Friday thread on email and how I get to Inbox Zero almost everyday.

On ave, I receive 200-300 emails per day. Here's how I process mine.

>>
1) At a strategic level, I use the Yesterbox email system.

tl;dr - I look at emails that came in yesterday today. So you only have a finite # of emails to process. (but sometimes I "rescue" impt emails that have come in today and answer them today :D)

2) To implement Yesterbox, I use @boomerang to pause my inbox. It holds all emails that I'm not looking at today in a different folder. When I unpause, it brings all those emails into my inbox.
Read 13 tweets
11 Mar
Thursday thread about focus

As my business partner @shiyankoh likes to say, "Startups die from indigestion not starvation".

Meaning - founders often take on too much at the same time and are not focused on enough.

>>
1) As a startup, it's tempting to want to take on EVERYTHING. New features. New markets. New products. New types of customer personas.

People often think they need to raise a lot of money to tackle all these things.
2) The truth is it's much better to limit the scope of what you're doing.

One customer persona (to start). One simple product that does one thing.

And not much else.
Read 17 tweets
10 Mar
Some Wednesday thoughts on geography.

As we come out of the pandemic, I don't even know what "geography" means anymore.

What does it mean to be focused on investing in US companies? What does it mean to be a US company?

Some thoughts >>
1) Even before the pandemic, we did all of our interviews over video conf and most of our companies are located all over the US, Canada, and Southeast Asia.

There are so many founders we've backed whom I've never met in person even to this day!
2) That being said, we've always had a specific mandate to invest in startups in the US, CAN, and SEA.

These days, though, I have no idea where our founders are. During the pandemic, so many ppl have moved and everyone went remote.
Read 14 tweets
9 Mar
Received a number of requests for this one -- a Tuesday tweet thread about co-founders.

Do you need one? What should you look for? Can you bring in a co-founder later?

Read on >>
1) Let's get some myths out of the way. A lot of VCs don't like to invest in companies w solo founders.

(Not all - @HustleFundVC we invest in a lot of solo founders!)

But the truth is you are not more likely to succeed with or without a co-founder.

techcrunch.com/2016/08/26/co-…
2) But there may be MANY reasons you may want a co-founder. You can:

-Go faster
-Share the weight of company building
-Provide morale for each other

Building a company is hard, and having a great co-founder can help w/ your psychology
Read 15 tweets
9 Mar
A lot of people are always so floored when they hear about a bootstrapped / near bootstrapped company achieving high levels of revenue. How is that possible?

A (very) quick Monday thread >>
1) It's actually WAY MORE COMMON than you think. This shocks other investors when I tell them about these types of companies.

You just don't know / hear about most of these high flying capital efficient businesses. And they're not usually household names.
2) Here's a co I met in Sweden yrs ago and we invested back then w/ my old firm.

The startup is called @Mentimeter - they make interactive software for events and presentations.

They just published their most recent updates today.
Read 6 tweets
7 Mar
Today's Sunday tweet thread is on when to give up on your startup and options for giving up.

This is a topic that I don't think is discussed enough, because founders don't want to think about giving up & investors don't want them to give up.

Read on >>
1) Yesterday I talked about tenacity as a top trait in the most successful entrepreneurs.

I ended by saying, "If this is the path you want to take..." then just keep going, and you'll be successful.

But what if you discover it's not the right path?

2) There are two ways that it could not be the right path.

1) Entrepreneurship in general is not the right path for you.
2) This particular idea / business / team etc -- the details of your current journey -- is not the right path for you.
Read 35 tweets
6 Mar
Some Saturday thoughts about tenacity...

1) Yesterday I had a call w/ a portfolio founder - he was going through really tough times. He was running out of cash & had to let go of a lot of his employees. The pandemic has not been easy for him. His mental health is in a rough spot
2) Today I saw the latest markup on a company I backed in 2015. 76x net paper markup! I could not be happier for that founder & company & was thinking about the two situations.

They're actually more alike than you might think.
3) My past portfolio co, like so many, couldn't raise any money. Didn't have fast growth for 4+ yrs. Had a couple of restarts. Insane scrappiness. Tearful conversations even.

In fact, they retain a lot of equity, BECAUSE no one would back them for so long.
Read 12 tweets
5 Mar
Friday tweet thread about Board Seats.

What are they? Why should you care? Who should have them? How to think about all this as a founder?

thx @zsilvs303 for the suggestion!

Read on >>
1) Whether you realize it or not, your startup has a Board. It's likely just you (and your co-founder).

Your Board is a group of people who oversee governance of the company and look out for the shareholders of your company.
2) When your Board is just you, you're not only the management team running the day-to-day, but you are also the governance of the management team.

This is fine in the beginning, because you also probably own the whole co.
Read 16 tweets
4 Mar
Today's tweet thread is on

What the *(&%#*(@&%(* is going on in the market???

This is my take, but I'm often wrong, but you get what you pay for. :)

Read on >>
1) First some context - last March, public stock prices plunged as we braced for the pandemic in the US.

Personally, I thought it was going to continue plunging, but it stopped & ended up rising to almost pre-COVID levels for sectors that had been HIT HARD (travel etc)
2) And for companies that THRIVED in the pandemic (Zoom, Shopify, et al), they had an enormous run in 2020!

Meanwhile, the private markets had a slightly different trajectory. In the spring & early summer of 2020, VCs basically halted investing.

techcrunch.com/2020/07/13/sec…
Read 16 tweets
3 Mar
Today's thread builds off a question I've been hearing a lot about in the last 24 hours.

As a founder, what do you do if investors tell you they're committed to investing if there is a lead?
1) First off, let me tell you how EXCITED I was when I was told this when I was raising for my past startup. I thought that it was so great that I was getting commits.

And I would often respond, "Ok! I'll come back when I have a lead!" This was a big mistake.
2) It turns out most of the time when investors tell you they are committed to investing if there's a lead, it's not a lie, but it's also not a real commitment.

It's the easiest way to tell a founder no without actually doing so.
Read 11 tweets