In this video, Y Combinator's Michael Seibel shares tips on how seed-stage startups can successfully pitch investors and raise funding. He points out common mistakes founders make and emphasizes the importance of concise, clear communication. With a particular focus on startups that have not yet found Product-Market Fit, he lays out a concrete methodology for winning investment.

1. Why Is Fundraising So Hard? 😥

Michael Seibel opens by saying that pitching is the most painful thing founders go through. He notes that every founder who has pitched can name exactly the investors who told them "no" — and feels "not hatred, but a special emotion" toward them, along with a burning desire to prove them wrong. 🤣 Seibel shares the know-how YC has accumulated from helping more than 200 companies pitch investors, with the specific goal of helping early-stage startups that have not yet found Product-Market Fit become far more successful at fundraising. He says that much of the fundraising advice founders have learned is probably wrong, and that his goal is to make them forget those bad lessons.

2. Stand Out Through Clarity and Simplicity ✨

Seibel emphasizes that concise, easy-to-understand explanations are the single best way to stand out among investors. Having conducted more than 2,000 YC interviews, he points out that many founders fail to raise money simply because they cannot clearly communicate what their company does.

"If I don't know what your company does, I can't invest."

Many people think pitching requires energy, flash, and showmanship — a "Shark Tank" performance — but he says that is simply not true. Being concise and easy to understand matters far more, and he flatly states: "It won't sound glamorous, but it will work."

He presents seven core elements every pitch must include:

• What do you do?
• Who's on your team?
• What's your traction?
• What do you know that everyone else doesn't — or would disagree with you about? (Your unique insights)
• What's your market size?
• What are you asking for?

3. Winning Strategies and Common Mistakes for Each Pitch Element 💡

3.1. What Do You Do?

The key is to explain what your company does in two sentences and to give a concrete example.

"Airbnb lets any house or apartment owner rent out their place online. They collect payment online and take a 15% fee on every booking."

He follows this with a specific early Airbnb use case: during President Obama's 2009 inauguration in Washington D.C., a waiter living there rented out his apartment — with every hotel already fully booked — and earned two to three months' rent. The example is so specific that listeners can easily picture and understand it.

Common mistakes:

• Using customer language instead of investor language: Founders often use jargon that customers understand but that confuses investors. Different explanations are needed for investors versus customers — and website copy is written for customers, so never read it verbatim to investors.
• Obsessing over 100% accuracy: The goal should be "100% clarity and 80% accuracy." Overloading a pitch with detail in pursuit of perfect precision kills clarity.
• Overly generic examples: Generic examples with no specific facts are forgettable.
• Failing to make the problem and solution clear: A good example should naturally surface both the problem and the solution.
• Not stating what you do on the first slide: Many founders follow a logo-only slide with a dense chart, leaving investors confused. State clearly what your company does on the first slide — and it is perfectly fine to ask directly: "Did you understand what I just described? Would another example help?"

3.2. Team

The purpose of the team slide is to explain who is on the team, their roles, impressive accomplishments and credentials, and — if possible — direct experience with the problem.

"Airbnb's founders were broke startup founders who couldn't make rent. They could talk about building a website for a design conference and hosting three guests to cover their rent. Weaving that kind of first-hand problem experience into your team slide makes investors see you as experts."

Common mistakes:

• No titles: If it's unclear who is CEO and who writes the code, investors won't know who they're entrusting their money to.
• Long personal stories: The team slide is not the place to narrate a founder's life story. Unless an investor explicitly asks, personal stories should be avoided.
• Omitting concrete accomplishments: Founders who have built, say, software for a Mars rover often fail to mention it. Simply saying "I built the software for a Mars rover" is more than enough to impress.

3.3. Traction

Traction is a clear description of what you have achieved since starting the company. Graphs should only be used when they trend up and to the right.

"If you built an iOS app and distributed it via TestFlight to 100 users within one month — even if they don't use it much yet or it hasn't officially launched — that is impressive traction."

Investors know that early-stage companies don't have large revenue or user numbers. What they care about is the ability to execute quickly — momentum. The traction slide must clearly convey what you achieved and how quickly you did it.

Common mistakes:

• Omitting timeframes: Saying "here's what we've done" without mentioning the time period leaves investors unable to tell whether something took a month or two years — and fails to impress.
• Including "fake" traction: Advisory board surveys and other activities that don't actually advance the company are fake work and should be left out.
• Including a traction slide when there is none: If your startup is only two weeks old and has nothing to show, don't manufacture a traction slide and look foolish. Just talking about the team is better.

3.4. Unique Insights

This is where you present an insight about the problem, the customer, or a potential solution that others are unlikely to know or would disagree with. But this section only shines after investors already understand what your company does and are impressed by the team.

"Airbnb's unique insight came from the fact that every other service didn't process payments. In a low-trust environment, having a third party handle payment makes both hosts and guests trust each other more — which unlocks the market."

Common mistakes:

• Insights that aren't actually unique: If more than 50% of the people in the room would agree with it, it is not a unique insight.
• No concrete story: Tell the specific story behind the insight — like the time Brian (Airbnb's founder) went to South by Southwest without a payments-enabled platform, had no cash, and had an awkward experience with his host. A story that explains how you arrived at the insight is far more compelling.
• Lacking numbers and facts: If an insight came from users, back it up with numbers and facts to make it persuasive.

3.5. Market Size

With market size, how you calculated the number matters more than the number itself. You need to educate investors on the potential user count, expected pricing, and the reasoning behind that pricing — using a bottoms-up approach.

"Investors don't know how many customers you can reach or what you'll charge. You've done that research, and it's your job to make them understand it."

Common mistakes:

• Citing reports: Saying "JP Morgan says the online e-commerce market is $120 trillion" teaches the investor nothing.
• Skipping the calculation: Show the math — how many potential users there are and what you can charge each of them.
• Not mentioning comparable products: If your product replaces Figma, explain what Figma charges, and why your product delivers more value and can command a higher price. Comparable products give your pricing a concrete basis.

3.6. The Ask

The single most important — and most overlooked — part of any pitch is simply asking for the money. Seibel says that in a full 70% of pitches, founders never actually make that ask.

He describes three investor mindsets to explain why this matters:

1. Will never invest (the most common)
2. Will definitely invest (the rarest)
3. Will invest if asked, because saying no feels worse than writing a check (roughly 10%, especially angel investors)

"I am hoping the founder does not ask me for money. Because I strongly suspect that the pain of saying 'no' is so much worse than writing a $25,000 check that I'll say 'yes' instead of saying no. Isn't that incredible? 🤯"

To capture that third type of investor, you must ask.

Common mistakes:

• Not asking: The biggest mistake of all.
• Not mentioning social proof: State who has already invested and how much you've raised.
• Only talking about hiring plans: Investors don't care who you plan to hire; they care about what you'll do with the money and what revenue or usage milestones you'll hit. Hiring is a means to an end, not the end itself. Present a clear, compelling 18–24 month goal and then ask for the money.

4. Overall Pitch Structure and Mindset 🗣️

Beyond the individual elements, Seibel offers important advice on overall pitch structure and a founder's mindset.

Common mistakes:

• Saving the most impressive content for last: Arrange your pitch content from most impressive to least impressive. Except for the "what do you do?" and "the ask" slides, the order is flexible. Investors won't stay focused for the full 30-minute meeting, so front-load the important stuff — "you need to earn the next two minutes."

"Don't save good stuff for late in the pitch. That's just stupid."

• Pitching like a book report: A pitch should be a conversation, not a one-way information dump. Investors don't get persuaded by founders — they persuade themselves.

"Investors are convincing themselves to invest. The more they talk, the more likely they are to give you money. 📈"

Once you capture an investor's interest, pivot to that topic immediately and keep them talking.

• Not watching the investor: On Zoom calls, you can see investors' faces up close. Read their facial expressions to gauge their interest and adjust your pitch accordingly. Investors don't suppress their reactions like poker players — "their faces are open books."
• Distracting slides: Slides should be visually boring. Flashy design pulls investors' eyes away from the founder and onto the slides themselves. Designers don't know the core points of your business, so outsourcing the design often means the wrong things get emphasized. "Simple and clear" is what matters — not sexy or sizzling.

5. The Y Combinator Pitch Demo 🎤

Seibel closes with a live demo of pitching Y Combinator itself using the principles he laid out. He explains what YC does in two sentences, uses his own experience starting Twitch through YC as a concrete example, and walks through every element — team, traction, unique insights, market size — before ending with a clear, direct ask: "Apply!" He wraps up by reinforcing the central message: "Less flash. Clear and concise. That's the game."

"That's the YC pitch. Not a lot of sizzle. Clear and concise. That's the game. 🎯"

Conclusion 🌟

This video offers practical, essential advice for seed-stage startups aiming to close funding. Michael Seibel argues that clarity, conciseness, and concrete explanations beat flash every time — and that the key to a successful pitch is drawing investors into a real conversation, staying flexible as their interest shifts, and above all, never forgetting to ask for the money.