Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Elizabeth Yin of Hustle Fund was recorded in October 2020.
Elizabeth Yin is General Partner at Hustle Fund, a pre-seed investment firm.
Sramana Mitra: Let us get you acquainted with our audience. Tell us a bit about your background.
Elizabeth Yin: I grew up in Silicon Valley. I worked at Big Tech for a while. My last large tech job was at Google. Although I felt that it was great, it was way too big for me. I decided to start my own business in late 2008.
I have wonderful timing. I left my job to start my own company, but I couldn’t raise money at all. It was a hard time, but it taught me how to build a business. I built an ad network called LaunchBit. I sold that company in 2014 and I have been on the investing side for the past six years.
Sramana Mitra: What is the investing thesis of Hustle Fund?
Elizabeth Yin: We call ourselves a pre-seed fund. We invest in software startups at the early stages. Our sweet spot is companies with a product, but we don’t care about traction at all. We can make that decision within 48 hours of a conversation with a founder. I can dig into the model, but that is the gist of it.
Sramana Mitra: We will dig in on the model. What check size are you writing usually?
Elizabeth Yin: Our first check in almost all cases is $25,000.
Sramana Mitra: How big is the fund?
Elizabeth Yin: Our fund was $1.5 million. Our fund two is unannounced.
Sramana Mitra: What do you look for in terms of validation? Anybody can put together a product. What is it that you are looking for? What sector and business model? Is it B2B or B2C? What determines what you like to write your checks for?
Elizabeth Yin: There are a couple of considerations. The number one is your fund size strategy. For smaller funds, there are certain things that you can do and certain things you cannot.
For example, when you are writing a smaller check to mitigate and down-size risk, we look for companies that could potentially generate revenue immediately. Even if we are coming in early and the company cannot raise any more money, we expect them to survive and thrive even without additional VC funding.
We tend to invest in mostly B2B. We have done some fintech and consumer digital health as well. People often ask me what sectors I like. It’s not about the sector at all. I’ve been an entrepreneur for a long time and I’ve done a lot of marketing myself. The biggest problem today is customer acquisition.