Delian Asparouhov on the YC Demo Day evolution: from 600K seed rounds in 2014 to today's capital-rich environment

that that's reason enough alone to apply to white company group chat. Yeah. Anyway, thank you so much for coming on so much. Let's bring on the next. Do we have uh who do we have next? Oh, Delen, we were just talking about you. What's up? How you doing? Oh, you got the hat on already. Oh my gosh. Let's go, baby. Iron.

I can't believe you hit him with that. We do that when we hear like big numbers. They didn't bring the gong. Should I? Um, so I was a Y comator summer uh 14 company. That's right. Do you want me to go through my summer 14? Give us the page. Give us a pitch. Uh, so hi everyone. Uh, my name is Delian Aspero.

I'm the CEO of Night and Gale. Uh, we build software that helps uh, uh, autism therapists that work with uh, uh, young children to basically help them capture data on those children's behaviors. Uh, put that into reports that you then send off to your insurance companies to uh, get reimbured.

Today, all this is done by paper and pencil, super manual. Takes these therapists like 30% of their workday just doing a bunch of bureaucratic actions. We cut that down, make it super fast. They get reimbured more quickly. Um, and they get to spend more time with the kiddos rather than on a bunch of paperwork.

Cursor for autism. I was about to say curs. It's cursor for autism. So, if you ever wonder where all the autism came from, it's because my first company literally all I did was spend time with autistic kids. And so, you know, I had some in me already. It got amplified. How did your demo day go?

Did you raise like what was it hard to raise back then? It feels like everyone here kind of can put together a million dollar seed round. What was what was like the the comp that you used? A lot of a lot of YC companies obviously like to give something and roll for dog walking. Yeah.

like summer 14 like you have to remember like at the time it's not like there was a ton of like healthcare SAS things that had worked. It's like you had like Epic as like an EMR that were obviously done well Epic the story fully. Yeah. And like we weren't really an EMR.

So honestly I think like you know um I remember like Sam you know at the time cuz he was like the head of YC back then you know two weeks before demo day basically told me like your pitch is [ __ ] trash.

Um and then I went and you know we're going to say this on live stream but um yeah I took some psychedelics on a weekend and like you know really thought about my pitch you know for that weekend.

made a lot of improvements and then Sam afterward told me he was like, you know, relative to where your company's at in like performance. Phenomenal presentation, but phenomenal presentation in 2014 turned into like 600k seed round.

It was a [ __ ] grind to get through like still two months after demo day like you know doing individual calls and it's just like when you look at like the amount of capital that's like you know whatever like the next door building there was there was like a two somebody said there was like a 2hour wait this morning if you tried to show up like right at the start there was like the line was like two blocks down summer 14 like we like filled up like a small little like area like cocktail area and like the computer history museum down in there.

So it's like I if you just if you just given 10 grand to like every batch member with you, you would have a billion dollars now, I'm guessing. Yeah, I think summer 14 did have some hits. I have to go back and remember who summer 2012. My batch had a ton. Coinbase, Instacart. Yeah, it was a good batch.

There were a bunch of good ones. But yeah, it's like interesting to study just like I feel like you can use Demo Day. This is my first time coming to Demo Day in like I think seven years or something like that. Partially like in 2018.

I went spent a bunch of time on it and like honestly just like didn't lead to any investments and so I was like at some point what am I you know sort of doing here then obviously co really killed it off and so um excited to be back but it's also an interesting just like marker of like the like the industries you know sort of maturity of just like the amount of companies what the companies are working on now also the amount of comps that like you can like look at like in 2014 if you had said like my comp is like I would like to be a hundred billion dollar publicly traded company it's like okay there's like basically two of those in the entire history of technology now you have to come because people are doing Varta for X got there was an Indian Va.

So, you know, got to got to track those guys down and figure out how to like acquire them. So, we have like a desi va. Yeah. Uh, have you have you seen any of the hard tech companies yet? Any of the pitches? Gary said like 11% of the batch is hard tech. Yeah. Yeah.

Yeah, it's interesting to see like I mean I remember in like 2018 19 when I was doing like hard tech, industrials, defense, aerospace, it was just like so uninteresting to so many people like they would all like literally like you know we talked about this like ever at my former colleague.

He's just like oh like if anything is like you know negative gross margins and like highly capex intensive send he like said that as a joke and then now everybody's realizing like actually capex intensivity is like the best mode ever because like if you just build software AI slop can you know replicate it basically overnight.

Um so yeah definitely looked at you know handful of them.

I think it's cool to see that like YC's leaning into this cuz it's not something that they've they had a couple hard runs with like Pebble was a big was a really big like hard go because like they got so Sherlocked by Apple with the Apple Watch yeah what are you going to do?

Uh but at the same time like there's been now like Astronis and Oaklo and like a few really even harder tech companies that have made it through and like scaled. So Astronis I do think is like the best like Oaklo obviously like you know you know sort of you trading but like you know hard to figure out.

Yeah, hard to figure out but still feels like it's like it's got some, you know, sort of real like 300 ft down.

I admit though, like look, I think like I mean if you look at, you know, the like YC deep tech, you know, sort of portfolio and like hit rate and outcomes relative to like the FF orelian seed deep tech industrial portfolio. There's definitely one that I would want to buy in the basket of and one that I wouldn't.

And so, you know, I uh I mean, maybe I shouldn't be speaking. Maybe Gary's going to [ __ ] I I I I think like the bull case is that like like it is great to have exactly what YC is, which is an incubator, an accelerator, like a pool for that type of talent to come out of.

And if you wind up picking over at it at some point, like that's fine and that actually part of the ecosystem. And yes, like you're going to get earlier stuff, but it's nice that there's at least an ecosystem. Some of the people that go through YC with hard, they might become employees at these companies.

They might become acquisition or aqua hires.

It opens the Overton window for like the average day for grad to like not just work on How many how many multi-stage VCs have pulled back from from doing de demo day investing at all and just saying you know we're not going to try to go I mean I feel like in like you know sort of 2019 it was like the consensus thing like at some point like everybody was like why are we doing this it's just like way too many companies that like you know sort of seed rounds you know feel like and again you know maybe Gary's going to kick me out for this but it's like the seed rounds felt like they were really overpriced and especially as a multi-stage firm it's like well you can just wait for the series A and like on a risk based it's not like the companies are going to die Oh yeah, there's so many YC specific funds that would come in and just write 100K check into tons of companies.

So like everyone was getting their rounds done. But yeah, I mean yeah, it just speaks to like how they're playing. Also, there's this weird dynamic where YC used to say like I don't know if you got this advice, but it was like don't pitch any investors until YC demo day.

And then everyone was like oh well like the game theory is like if I'm the only one pitching before demo day I should get all the interest I get all the interest.

And so and so like there's still like the I'm sure like you will you will take a pitch with a YC demo day founder a couple weeks earlier because they're inventive and creative and they got to you before. Totally. Totally. You just might not find them through this.

I do think there's some amount of like a lot of the like you know companies have already closed their rounds by like the time this day happens which was very much so not the case in 2014. 2014 is like oh maybe one company in the entire batch.

And by the way, for what it's worth, like if you study those like early batches, there was basically like an extreme negative correlation between like the ones that like, you know, sort of raised early and that actually ended up being like the like, you know, sort of batch returning, you know, sort of outcomes.

I remember there was one company in YC Summer 12 that had a uh super viral video because they were in the viral video making business and so they got a ton of attention and they'd also like kind of ramped revenue by like saying like, "Yeah, well, we'll produce a video for $100,000.

" Like that's not really like like durable, scalable revenue. Clearly the company that made the $60 million round at before demo day and everyone was like what's going on? Coinbase sitting there at eight and it's like did you see that? Did you see that ad? It was a company called Code Tool.

They did like a skit based on the deal rippling thing. No way. Prank on it. You got to see this video hilarious. But they they're in this batch. Yeah. They they they have a they have a service that will monitor Slack chats for Honeypots and create Honeypots for you and do all this different cyber security stuff.

It's great.

I mean, it is I think back on like I just had this memory from 2017 when I was at Coastal Ventures where like um you know, Venode would basically have like the junior team go through and like crawl through the entire batch of like everybody like the week beforehand basically on the Sunday night before like the like you know sort of Tuesday demo day.

We would invite like 15 companies to present at KV of uh on Sunday from like noon until like literally midnight we would be there. Like I remember like letting founders in at 11:30 at night to like come pitch the firm. And it actually felt like we had this like really deep AR. It was alpha. Nobody else was doing it etc.

And then literally it's like like you said now there's like these infinite Ebis YC funds where like I actually just feel like the alpha there on like doing the pre-work etc. getting into it. It's not to say there might not be some good outcomes but like many many more people run that strategy.

And then even the fact that like something like this exists like the idea in 2014 that there'd be like a live show that anybody would give a [ __ ] about and actually want to tune into to talk to us like we could barely get anybody like you know pay attention to any of us let alone the idea that there's like whatever going to be like 15,000 people on Twitter.

So yeah this entire industry has just gotten like you know I mean like this is we we are like the new Wall Street. It's like kids grow up you know in like 2008 being like I want to be like an investment banker. Yeah. I just said I I knew I wanted to join YC when I was 16 and he's 26 now.

So he's like decade in the making. I mean, we talked about this in relation to the like teal fellowship recently where it's like in 2012. The like off track thing to do was to like drop out, build a company, join an accelerator, work in technology.

Now, this is the track and so we like need to practically find there's a high school dropout in this batch. Yeah. Yeah.

I mean, at this point, I mean, there's an article in Business Insider today by Julia Hornstein who wrote the article about the first article about us talking about how uh like not just not even going to college at all is the new dropping out.

It's like just the default versus like in my year at MIT remember there was like three of us that dropped out apply to college get accepted branding be like MIT accept but that's all you I had a whole riff on this is like yeah Delian you dropped out of MIT I knew that I would drop out if I went there so I didn't even apply to college and graduate but it's just like yeah yeah you're a sucker for even having gone for a day I didn't even go to you paid the application you paid the application [ __ ] paid a full year of tuition Godamn want those $45,000 back.

I could have put that in [ __ ] Nvidia and I'd be a billionaire.