• Having Won Over VCs, Y Combinator Turns to LPs

    y_combinator_logo_400-400x220Last week, Y Combinator ran investors through 105 presentations by early-stage startups in a two-day show it calls Demo Day. The pace of deal-making for such events, staged every summer and winter, has grown so feverish that the incubator introduced a new wrinkle: backers could commit to plowing millions into a company by simply clicking the equivalent of an “easy button” via an online dashboard that Y Combinator created.

    Many local VCs seemed too busy to notice. Brian O’Malley of Accel Partner was walking around on his phone. Jon Sakoda of New Enteprise Associates made the rounds. Hunter Walk of Homebrew looked to be taking a couple of meetings, too.

    Yet there were other, more surprising guests. There, in the front row, was “Stevie” Cohen, the famed hedge fund manager. Elsewhere in the audience, a money manager for Major League Baseball sat rapt, listening to the procession of startup presentations.

    Perhaps the most interesting category of attendee, though, were more traditional limited partners, who typically invest in venture and private equity funds.

    Indeed, while it used to be that VCs treated their LPs a bit like mushrooms, keeping them mostly in the dark, today’s LPs want to be closer to the action, and for them, Y Combinator is Ground Zero.

    More here.

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