SPEAKER_00: Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is a recap of the ninth week of startup school. I've cut down the ninth week of lectures to be even shorter and combined them into one podcast. First, we'll have a lecture from Carolyn Levy. Carolyn's a partner at YC. Her lecture covers modern startup financing. Then we'll have a lecture from Jared Friedman. Jared's also a partner at YC. His lecture focuses on advice for hard tech and biotech founders. All right, here we go.
SPEAKER_02: I, like Kevin said, I'm going to talk about modern startup financing. I have only been practicing law for 21 years. So what's old and what's new only spans that time frame for me. But I've seen a lot of changes to the startup ecosystem. YC's been a big part of a lot of the changes to the startup ecosystem in the way that financing is done. So I picked this picture. These are called closing volumes. And every corporate lawyer who does private company or public company financing has a lot of these if they have been doing it for long enough. The legal teams used to get these bound volumes with all of the financing documents in them. They have our names on them and the date. And this doesn't happen anymore. But I just thought this was, I saved some of mine. I thought this was a good picture for this. So a lot of you are going to already know what I'm about to talk about. But since this is startup school, I just want to give some basics. So you have a company idea. And the first thing you're going to do is form a corporation because it's a separate legal entity. And it protects the founders from personal liability. Right, we all know this. You can probably bootstrap it. You and your co-founders can bootstrap it for a little while. But eventually, you're going to want to hire or grow. And you need money to do that. How do you do that? You can go ask your relatives for money. You can go to a bank and ask for a loan. Or what most startups do is they sell a part of their company to raise money. So when you, as founders, you guys will buy common stock. That's how you become owners of your corporation. And typically, you will buy common stock for a fraction of a penny. You may contribute some intellectual property as part of that purchase. But basically, you're going to be buying your stock and own 100% of it for nothing. You cannot raise a meaningful amount of money by selling common stock. So your option is to sell to investors a completely different class of stock called preferred stock. Preferred stock is more expensive. Before another kind of basic thing, I never know what kind of terminology people know. So I thought it'd be really helpful to take a look at this. These terms right here. So first of all, financing and round, they mean exactly the same thing. Preferred equity financing, preferred stock round, preferred stock financing, series A financing, series seed financing, these things all basically mean the same thing. It's fundraising by selling preferred stock at a calculated specific price per share. These terms, convertible round, note round, safe financing, we're going to talk about what the safe is, early stage round, early stage financing, these are all ways to describe a fundraising event where you're not selling preferred stock or common stock. You're selling convertible securities. Convertible securities are the right to get stock in the future. It's not itself stock. It converts into stock later. So I think that there are about three things that have changed a lot over the years. And the first one is structure. And by that, I just mean that the actual document that we use for early stage fundraising has changed. And I'm going to talk about that more in a few slides. The other thing that is hugely different from the old days is access. Because nowadays, you can find fundraising documents online. And they come with annotations and e-signatures. And it's just incredibly easy to get documents. Back in the olden days, the only way you could fundraise was by hiring a lawyer because there was no way to get the documents you actually needed to sell your preferred stock. And the other thing that I think has changed a lot over the years is focus. I just remember, I don't ever remember anybody ever noticing how much time it took to do these financings in the past and how much focus it took away from founders building their company. Like I don't remember an investor or a founder ever saying like, gosh, this is taking a month and a half. I'd so much rather be building my company. I think today, people notice and have figured out that it's not in anyone's best interest for people to be spending a lot of time fundraising. So it's much faster. So what hasn't changed? Preferred stock financings are no longer the way that companies do their first fundraising. But that process and those documents themselves really haven't changed over the years. And I'll talk about that a little bit more in a second. But that's pretty much the same. It's just the when that's changed. The other thing that hasn't really changed is I think there are two things that are super important to investors and to founders when they're fundraising. And those two things are valuation and dilution. So valuation is just the value of your enterprise. And dilution is stock, like how much of your company have you sold. So if you are selling investors a percentage of your company, you previously owned 100% of it. After you sell some, you're not going to own 100% of it. That's dilution. And then the last thing I just really wanted to add in here, because I think it's really important to get this point across to people who are starting startups. Communication with investors has always been important because this is fundamentally about a relationship. Investors are giving you money, and you are being expected to take their money and turn it into a billion dollar business. Whether or not you are succeeding or failing at that endeavor is so critical to communicate with your investors about that. So I think that that's something that has not changed over the years. It's still super important to communicate. So as I mentioned before, the old way of raising early money was to do a series A preferred stock financing. A is the first letter of the alphabet. So the first time that a startup would fundraise, it would be called a series A preferred stock financing. OK, how did it work? So you take the valuation of your company, which is the overall value of your enterprise. You would divide it by the number of outstanding shares of capital stock. That's mostly for a series A financing, just be the stock that the founders owned. And that gets you a price per share. You take that price per share, and you would sell your preferred stock to your investors. So now, well, back then, angel investors, I'm sure you guys have heard about angel investors. They used to aggregate into consortiums. And so they would tend to all band together and write one big check. So for your series A financing, you would have maybe a couple of angel groups, and you would raise about $1.5 to $2 million in your series A preferred stock round. Angel groups now write individual checks. Doesn't really happen in consortiums anymore. Anyway, then you would negotiate the terms of the preferred stock. The lead investor and you, the company, would have you each get your own legal counsel. The lawyers would go back and forth. They would negotiate the terms of the preferred stock, which means voting rights, liquidation rights, pro rata rights. And then you'd end up with a set of documents that go in those closing volumes. And there's about five of them. This took months, and it could cost anywhere in legal fees from $25,000 to $100,000. OK, so what's broken about that? Well, that's pretty elaborate, right? Takes a long time. It costs, I just told you, it could cost $25,000 to $100,000 on legal fees to do this. So it's kind of a big deal. But I think that the thing that was most broken about it was how inflexible it was. Jared's probably going to touch on this. The cost of starting a company has decreased a ton over the years. Not so much for software and e-commerce companies. I'm sorry, not so much for hard tech companies. But software and e-commerce companies, the price of actually starting these startups has way decreased. And as a result, companies actually don't need to raise $1.5 to $2 million just to get off the ground. And having to do these long, elaborate, expensive financings was not worth it. So it just wasn't at all flexible. So when a company would do a big Series A round for its first round, and then it was waiting to do its Series B financing, sometimes it would run out of money in between. And so oftentimes, the company would then go to its lead finance, its lead investor, rather, in their Series A financing. And they would ask for a bridge loan. A bridge loan is a debt bridge between two financings. And these involve the note purchase agreement and a convertible promissory note. And sometimes there would be common stock warrants that would go with it. But basically, it was a stopgap measure in between financings. Now again, keep in mind, these financings I just told you were long and expensive. So you aren't just doing them all the time. And this is where bridge loan financings came in. At the heart of the bridge loan was this convertible promissory note. And a convertible promissory note was a loan. It had an interest rate. It had a maturity date. It was a real note. But it also had a mechanic that would cause it to automatically to convert into shares of stock when you did that next round. So if you got a bridge loan in between your Series A and your Series B, your convertible promissory notes would convert into shares of Series B when that financing happened. But along the way, and I honestly don't remember how this all came about, but people started to realize that just the convertible promissory note, not necessarily the no purchase agreement or the Comstock warrants, but the convertible promissory note itself could actually be used as a standalone document. And you could use it to fund companies. And you could use it to fund not as a bridge, but actually just the very first time that a company needed money. So this became a very appealing way to do your first fundraising event. Because instead of having all those documents I described in the Series A financing, instead you just had a convertible promissory note, which was obviously gonna be a lot faster. It's only one document. People still hired lawyers for these convertible notes, but only negotiating one document and you're only negotiating maybe maturity date and interest rate, lots cheaper and lots more flexible because now instead of having to do this elaborate financing process and probably wanting to raise a couple million dollars to justify all that effort, you could just raise 50K from an angel. You could raise 100K from an angel or even less. But it's still a promissory note and a promissory note is still a loan. So it's debt. We then at YC decided that we could modernize even the convertible promissory note and what we did is we came up with something called the SAFE. The SAFE is an acronym. It stands for Simple Agreement for Future Equity. And like the promissory note, it is one simple document. It is a convertible security. So when I showed you all those terms, it's a convertible security. It converts into stock when the company raises a priced round. You don't need to hire lawyers to do a SAFE. It's available online and the most important part of it is that it isn't debt, which is why it needed to exist. What was broken about convertible promissory notes? They were only one document. They were cheap, they were fast. Well, because we didn't think it made any sense to use debt to sell equity. Angel investors are not lenders and startups don't really wanna be borrowers, right? The whole point of taking someone's 50K and turning it into a billion dollars is everybody, those investors wanna be stockholders and startups don't wanna be thinking about accruing interest or when is their note gonna be due. So we thought that it made a lot more sense to take all the debt part out of convertible promissory notes but retain all of the convenience of them. So I could do an entire lecture on how to use the SAFE and what it's all about, but I've actually already done that. So there are other startup school video lectures that you guys can watch to hear a ton more about the SAFE. This is the YC page. This is the resources tab. So SAFE financing documents are at the top. We have a user guide that is kinda long but it has a ton of really good information in it, tons of math examples to use to show you how it converts. So please visit that. Then the SAFE is only five pages long. It has a word simple in it, right? It's actually really easy to read. So then the question is when do price rounds happen? They are still the primary way that startups raise money. They're no longer the way that most startups raise their, do their first fundraising, but built into the SAFE and other convertible securities like promissory notes is the whole concept that eventually the company is going to do a priced round and those convertible securities are going to convert into that priced round. So most often companies will do their first fundraising on a SAFE, convertible promissory note, and then they will do a priced round afterward and all of those SAFEs and convertible promissory notes will convert into stock. SAFEs and convertible promissory notes cannot convert unless there is a price run done eventually. So price rounds are still modern. They're just not the modern way to raise your money the first time. And also I should mention priced rounds, even though I was kind of laughing at them because they involve a lot of documents and we used to put them in these leather bound closing volumes for the lawyers to put on their bookshelves, they have actually seen some improvements as well. They are much more standard than they used to be and they are also, all five of the price round documents you can get them online these days. Everyone tends to still hire a lawyer for them. Okay, so did we perfect modern early stage financing by introducing a SAFE and by everybody using convertible securities to raise money the first time? And I would say we've come a long way but I don't think it's quite perfected. And the reason is because, I mentioned dilution a few minutes ago. So convertible securities, because people who hold, investors that hold convertible securities are not stockholders, you actually don't, it's very hard to tell how much ownership of your company you have sold when you sell a convertible security. They're not on your cap table as stockholders, right? You're still 100% owner if all you've ever done is sell convertible securities. But the day of reckoning is coming when you do your priced round and they all, all those convertible securities convert into shares of stock. You have to keep track and there are a ton of resources and tools on how you can keep track but you gotta do the work. There's no excuse for being surprised by realizing you sell 30% of your company to all of your angel investors. So don't let that happen to you. The other thing that has, that is to be aware of with early stage fundraising using convertible securities is because it's so flexible and easy to raise custom amounts of money, you know you can raise 100K and decide that you can bootstrap on that for a while and then maybe in a couple months you raise 50K because you just need a little bit more. It's very flexible but you can end up with a ton of investors and we call that a party round. Used to be that in the old days you'd maybe have six to 10 investors and now you can have 25, 35 different angel investors who've given you money. That's great, you got the money, it's not a bad thing but it can be administratively really challenging because they become stockholders when you do a price round and then you need their consent because corporations have stockholder consents. Kind of hard to chase down all those signatures. Again, not a bad thing, just something you gotta be aware of. And finally, one of the side effects of these convertible rounds is that investors write smaller checks, they tend to, and they don't care as much about the investor. They're not stockholders yet. So they're not quite as invested. This is a double edged sword. Sometimes investors can drive you insane but sometimes they can be really helpful. They will make introductions for you, they'll help you with strategic advice. So having investors who've just written a check and gotten a convertible security as opposed to writing a really big check and being a stockholder, it can mean the difference between how much attention they pay to you. Again, can be good, can be bad but it's just a side effect. This is my summary slide. Okay, so modern early stage rounds of financing are usually done now using convertible securities like the SAFE. Selling preferred stock in priced rounds is still modern, it still happens, it has to happen, it just tends to happen later, it tends to be your second fundraising, not your first. The whole point, as I said before, is focus. If you don't have to spend a lot of time negotiating documents, if you can get the money in the bank really fast, you can go back to building your company, which is what you want, it's what your investors want. Specifically for this crowd, this is not San Francisco, this is Boston. What SAFEs and convertible securities are completely common on the West Coast, I suspect that you guys will find angel investors and other people in your ecosystem out here that are less familiar with doing financings this way. So maybe a little bit of education involved, you may have investors who say, no, I've never heard of this SAFE, I wanna do a convertible promissory note, or you may have investors who are just like, what are you talking about, I don't do convertible securities, I'm buying preferred stock, that's what we're doing if you want my money. Kinda hard to say outside of the Silicon Valley, but for the most part, I would recommend that you approach fundraising with this idea of doing convertible securities just because it can be done so fast and so flexibly. And that is it.
SPEAKER_00: Thanks. Thank you. Thanks. Thanks. All right, now for Jared's lecture.
SPEAKER_01: I am Jared, I am one of the partners at YC, and I'm gonna talk about starting hard tech and biotech companies. Set of curiosity, in the audience here today, who is starting something like a hard tech or a bio company? Okay, a handful of folks, nice, excellent, excellent. Across all of startup school, there are actually over a thousand companies that are doing hard tech or biotech things, which I think is really cool. So this talk is gonna be most relevant for them, but also for other folks who might think about doing a company like this in the future, even if you're not right now. Here is what I'm going to talk about. I'm gonna define what a hard tech company is. I'm going to talk about the two most common hard tech, two most common problems hard tech companies face and how to solve them. And then I'm gonna talk a bit about fundraising specifically for hard tech companies, building on what Carolyn just talked about. So what is a hard tech company? This is my definition, because I couldn't find a good one on the internet. So the way I see it as a hard tech company is a company that fulfills two criteria. One, it will take a lot of time and money to build your first product. And two, even if you had lots of time and money, it's not clear if it would be possible to build it at all. Companies like this are a little bit different from other kinds of companies. And interestingly, it doesn't have to be a physical product. And this doesn't say anything specifically about science and technology. It actually applies to like a pretty broad range of companies. Another way of thinking about this is the difference between market risk and technical risk. So if your company is building a normal website or a mobile app, you probably have mostly market risk, which is to say you have a new idea. It's not totally clear if people are going to want this thing that you're making, but you probably don't have much technical risk because building websites and apps is a solved problem at this point. Whereas with a hard tech company, you're probably doing something that clearly people would want if you could do it. The question is whether you actually can do it. Okay, so starting a hard tech company sounds hard. I mean, hard is even in the name. And I think this scares off a lot of founders who would otherwise start one. And I think this is like non-obvious misconception. So I'm going to try to address it. Here is a quote by Sam Altman that sounds like a complete paradox. So what Sam said is, in many ways it's easier to start a hard company than an easy company. That sounds like it doesn't make any sense. But to explain what Sam, I think it's actually like a pretty deep truth. And so to explain what Sam meant by this, I'm going to tell you a story about a company called Boom. Who's heard of Boom? A few folks. Okay, so Boom is a YC company from three years ago, and they're doing something completely awesome. They're building this. It is a supersonic passenger jet to replace the Concorde. It will fly at Mach 2.2 and take you from San Francisco to Tokyo in five hours. No joke, they're really doing this. The founder of Boom is a guy named Blake. And Boom is not Blake's first company. Before he started Boom, he started a very ordinary company that made a mobile shopping app. And Blake came and he talked to the YC dinner and he reflected on the differences between his first company, the mobile shopping app, and his second company, Boom. And he said something really insightful. When he was building his mobile shopping app, getting the product live was easy. You can build a mobile shopping app in like a few weeks. But then everything after that is really hard. See, it's hard to get press to write about your mobile shopping app because it's not an interesting story. It's hard to get really talented employees to want to work on it. It's hard to get investors to want to meet with you to hear about your mobile shopping app. In short, it's just like hard to get people to care about it. And so while launching the product is easy, turning the product into a really big company is actually really hard. Whereas with Boom, it's exactly the opposite. Building a supersonic jet is like incredibly hard, but everything else around it is really easy. And from the very beginning, back when Boom was like just an idea, Blake was able to get some of the most talented people in the world to want to help him. We are living at a unique time in the world where it has become easier than ever before to start a hard tech company. There is an incredible amount of investor demand to fund really crazy, ambitious ideas like Boom. So while you will have to raise a lot more money to do a company like this, it's also possible to raise a lot more money to do a company like this. And an interesting thing is that the market doesn't seem to fully internalize this yet because most YC applications are not for companies like this and I think one reason that founders don't start companies that are super ambitious like this is because it's like really intimidating. I mean, as you guys know, starting any kind of company is really intimidating but it seems like it's gonna be easier if you start a company that's building something simple like a mobile shopping app. And the counterintuitive thing that Sam realized that I think is true is that it's only easier to get started. It isn't necessarily easier to turn into a really successful company. Not everyone knows how big a part of YC hard tech and biotech are. So I just wanted to give you a few quick stats. At YC, we funded over 250 bio companies and by a couple hundred hard tech companies as well. YC is actually the largest bio seed investor in the world and the largest hard tech seed investor in the world. This includes accelerator seed funds, every kind of investor. And here's something that most people don't know. Hard tech companies that apply to YC actually have about a 10X higher acceptance rate than other kinds of applications. I don't completely know why that is. I suspect it's something to do with certain kinds of founders being attracted to really ambitious ideas. So a really common question that I get from hard tech companies is like, I am starting a biotech company, how much of YC's advice applies to me? A lot of it seems geared towards other kinds of companies. And the answer is actually most of it still applies. I went through the startup school curriculum. This is the startup school 2019 curriculum. And I highlighted all the lectures that are typically relevant for hard tech companies in green and the ones that are typically not relevant, at least at the early stages in red. And as you can see, there is a lot more green than red. And this is my experience working with YC companies that are doing hard tech and biotech stuff, which is that while there are some differences, there are a lot more similarities than differences. Okay, let's talk about the two biggest problems specific to hard tech companies. So if you guys remember Michael Seibel's talk about MVPs, he talked about how some companies have a heavy MVP. That is, it's gonna take them a really long time and typically lots of money to build the first product. This is the case for most hard tech and biotech companies. So if you're in the position where you need millions of dollars to build your first product and you don't have millions of dollars right now, what do you do? The simple answer to this question is you have to figure out some way to make some progress on your idea that doesn't require millions of dollars. That is easier said than done. So to help give you guys some inspiration for how you might do that, I'm going to walk through seven examples of YC companies that were doing hard tech and biotech things that did exactly that. So the first one is Boom. So Boom's hack was they started off by doing a bunch of things that don't really cost any money at all. Here are some of the things that they did. They assembled a team of top advisors in the space to give them credibility. They built computer simulations that showed that they had a design that could work. They built a plastic model, like a couple feet long, that they could take around to people to show them what their vision of this plane would look like. And then they took that model and they went around to a bunch of airlines and they showed them the plastic plane model and they used that to get interest from airlines to show that there would be customer demand if they were to build the plane. And they used basically all of these things in order to raise the money that they needed to actually build the plane. There's a YC company called Solugen, which does something really awesome. They use synthetic biology to produce hydrogen peroxide. So on the left is a photo of their current hydrogen peroxide plant, which is enormous and produces truckloads of hydrogen peroxide that they ship all around the country. Obviously this plant cost a lot of money to build. But on the right side is their MVP. This is what they had when they applied to YC. It is a beaker that can produce about one cup of hydrogen peroxide. But this beaker proved the concept of their new industrial process for creating hydrogen peroxide, which is like the core idea of the company. And basically they just like started with the beaker and then they progressively scaled up to larger and larger installations until they had the giant hydrogen peroxide plant. So AirX is a YC company that originally planned to make their own medical device. Making a medical device is really hard. Their original plan was going to take like several years and millions of dollars in order to get FDA approval for this new device. Then they realized that they could launch a basic version of the same core service that they hope to launch by using an existing medical device that was already approved and writing some software around it. Now it's not as good as like eventual long-term vision, but it was like a good hack to build like something simple that worked well enough. And because of this plan, they were able to get live during YC in less than three months with no FDA approval. Notable Labs is a YC company that is developing new drugs for cancer. Developing new drugs for cancer is super expensive. It takes a super long time. And so the way they got started was by providing services to screen tumors to pharma companies. The services that they ran enabled them to generate both revenue and data that they're now using to develop their own drugs. Astronas is a YC company that builds telecommunication satellites and launches them into space. That is obviously not a cheap thing to do. It turns out actually that the cheapest telecommunication satellite that is useful costs like at least $10 million to build and launch. And so Astronas's hack was to start with a test satellite. The satellite in this photo was their first satellite. They built it in less than three months during YC and for less than $50,000. Now this satellite doesn't do anything really useful, like you can't sell it, but by launching an actual fully functional satellite into space and showing that they could do that, they were able to generate the credibility that they needed to go and raise the money to launch a full scale useful telecommunication satellite. Last example, Ginkgo Bioworks is a YC company that does genetic engineering of organisms. And in order to engineer their first organisms, they were gonna need like millions of dollars. And so their hack was they went around to some large companies and they closed contracts to create those organisms before they had actually made the organisms. The contracts basically said, if Ginkgo makes these organisms, we will pay you lots of money. And they used those contracts and they took those contracts around to investors as proof of customer demand. And they used that to raise the millions of dollars from investors that they needed to actually make the organisms that they had promised to customers. So basically they sold it before they made it. And this is a very generalizable technique that a lot of hard tech companies use in one form or another. Okay, so that brings me to the second most common hard tech problem, which is how do you prove people will want your product if you haven't built it yet? This is important for you to prove to yourself because the last thing you wanna do is spend years working on some product only to find that people don't actually want it at the end. But it's also important to prove it to investors. And so here are a couple of ways that you can do that. The best way is through presales. So ideally you just sell your product before you build it. This is what people do on Kickstarter. A good example of this is a company called Jetpack Aviation from two batches ago, which is building the flying motorcycle in the picture. And what Jetpack Aviation did was they ran a presale campaign and they basically sold flying motorcycles to a bunch of people on the internet to prove that people would want them. Unfortunately, doing presales is not always possible. If you're doing, for example, if you're doing something medical that requires FDA approval, it's actually illegal to do presales. So don't do that. So because of that, we created something called a letter of intent or LOI. And a letter of intent is a non-binding contract to buy your product when it's ready. Now a non-binding contract seems like kind of a silly idea. Like non-binding contract is kind of like a paradox, but it turns out that it's actually kind of very clever construct because it's not binding. It doesn't actually commit the customer to buying, but because it looks like a contract, customers take it really seriously. It's easy when you're talking to a customer for them to like be polite and casually say like, sure, I'd buy your thing if it ever worked someday because it's like no commitment for them. But if you ask them to sign an LOI, you'll find out if they're actually really serious about buying your product and investors know that. So here's just some quick advice about LOI. So if you decide to go down this route, the more specific the LOI is, the more valuable it is. A good LOI includes all the following information. The cool thing is if you can get a customer to sign an LOI like this, it literally gives you a roadmap for what you need to build in order to generate revenue from your product. Okay, the last thing I wanna talk about is fundraising for hard tech and biotech companies. Most hard tech companies will not be able to bootstrap. They will typically have to raise money from investors. So part of building a hard tech company is coming up with a smart fundraising plan. And sometimes hard tech companies will come to me at the beginning of the batch with a fundraising plan that looks something like this. This fundraising plan is like, hey, I have a really good idea. I need $50 million to go and build it. So I'm just gonna go pitch to a bunch of investors until somebody gives me $50 million, and then I'll be all set. I don't recommend this plan. When I see a plan like this, it makes me think of this guy who's just like standing in front of a wall, staring up at the wall. The wall is like the $50 million like impossible fundraise because the fact is it's just like impossible to get investors to give you $50 million for an idea. You have to make some progress first. And so what you wanna do is a fundraising plan that looks like this. This still gets you to $50 million, but it splits it into five discrete races that start very small. And the key thing here is that for each of these fundraises, you wanna have specific milestones that you hit. So like you start off, you wanna be able to make some progress with your company before you raised any money at all, like how Boom did, and then you wanna use that in order to raise maybe like a couple hundred thousand dollars, and then you wanna use the couple hundred thousand dollars to make more progress, which enables you to raise like a million dollars, and then you wanna use the million dollars to make more progress so you can raise $4 million and so on. And while the general principle is simple and easy to understand, a lot of the skill in building a hard tech company is in fine tuning this fundraising plan so that all the steps are as small as they possibly can be, because the most important part of this fundraising plan is that no step should be too large. By the time you go out and start trying to raise a $15 million Series A, you have to actually have accomplished enough that investors will give you that larger fundraising round. Otherwise, you're just gonna hit another one of those fundraising walls. And so really good hard tech founders are maniacal about like pushing down the size of each of those steps so that each step is as small as possible, which makes it as easy as possible for them to achieve the milestones that they need to raise the next round of funding. And that is all that I have about hard tech and biotech companies.
SPEAKER_00: Thank you. Thank you. Thank you. Thank you. All right, thanks for listening. So as always, you can find the transcript and the video at blog.ycombinator.com and if you have a second, it would be awesome to give us a rating and review wherever you find your podcast. See you next time.
