The formula for the perfect Y Combinator startup pitch

Ready, set, pitch.
Ready, set, pitch.
Image: Marko Djurica/Reuters
We may earn a commission from links on this page.

Two and a half minutes. That’s how much time the influential tech incubator Y Combinator gives startup founders to deliver a perfectly crafted pitch to an auditorium packed with investors and journalists.

With a record 114 startups in its current class, Y Combinator split its startup demos into two days at the Computer History Museum in Mountain View, California. After sitting through 59 pitches yesterday—with almost as many to go today—we noticed there’s a formula many startups rely on to succinctly and effectively get their points across.

Y Combinator president Sam Altman says there’s no set structure to startup pitches, but founders work with different partners to help hone their speeches. “I understand some of them sound similar,” he tells Quartz. “We custom tailor [the presentations] to every company. The key is to figure out the most important points and articulate it well.”

That said, there’s something uncanny about the trajectories of the pitches, which typically go as follows:

  • One-sentence introduction: “Hi, my name is [first name], and we’re [company name], [insert tagline of what startup does].” It’s common for startups to use the taglines to compare themselves to better-known services or companies. During demos yesterday, the delivery startup Magic referred to itself as “the Uber for everything.” To unbundle the complexity of its data science platform, Yhat called itself ”the AWS for data science.” (AWS is short for Amazon Web Services, Amazon’s cloud hosting platform.)
  • Background: Explaining the origin of the idea, or a founding story, can help investors understand why they should bet on your team. For example, the founder of HigherMe, a startup that helps retailers hire hourly employees, opened with his own hiring challenges as the owner of seven ice cream stores.
  • What’s wrong with the status quo: Illustrate the problem your startup is trying to solve. Kuhcoon, a company that automates and optimizes ads on Facebook and Google, kept it simple in its pitch: “People suck at paid media.”
  • Industry size: From there, it’s a natural segue into the market opportunity. InsiteVR, which builds virtual reality software for companies, crunched the numbers for investors: At $800 charged per project, and with about 8 million architectural projects last year, it calculates a $6.4 billion opportunity. This is a good time to throw in the word “disrupt.”
  • Run rate/growth metrics: Show investors the progress you’ve made so far. How fast are users, revenue, and/or app installs growing? Many companies prefer to withhold actual revenue figures and instead talk about growth as a percentage increase. (Save the nitty gritty for later, when negotiating terms with potential investors.) Y Combinator startups are in their early stages, so triple-digit increases are unsurprising. Small margins or growth numbers, however, tend to draw skepticism.
  • Early customer case studies: This is a perfect time for that obligatory slide of logos. Y Combinator is famous for its network, and alums, such as Airbnb, give back by testing early versions of products from later classes. Sometimes, early customers also include large consumer companies such as Nike and GE.
  • Once more for good measure: Investors are sitting through a marathon of pitches, so repetition never hurts. Recap with your company name, tagline, industry size, and/or growth metric.
  • (Extra credit) Talk about what you’re wearing: If you’re wearing pink pants—like the team at Slidemail, an email app that reduces inbox clutter—briefly point it out to investors at the end of your presentation. The more memory tricks you use, the more likely you’ll stick out.