Elizabeth Yin realized she had a problem. She wanted to be a founder, but couldn’t think of a problem she wanted to spend decades of her life working on. After soul searching, she remembered the one thing she did care about: helping other founders.

She took that passion and turned it into Hustle Fund, which focuses on offering capital, knowledge, and networks to “hilariously early-stage” software startups. She also angels invests in non-software D2C companies. She’s invested in over 800 startups, with two of her most notable being Webflow and Mejuri. 

We chat with Elizabeth about why valuation matters if you have a smaller fund, why she thinks certain hot spaces like AI might not yield the types of returns investors think they will, and what happens when founders misbehave (and commit fraud and flee to Russia). 

Elizabeth invests $150k checks into idea-stage B2B software, digital health, and fintech companies through Hustle Fund. 

Highlights: 

• When Elizabeth says she invests at an early stage, she means it. Hustle Fund invests in founders who have an idea and are pre-revenue.

• Elizabeth talks about the difference between small sub-$100M funds and large multi-stage funds. As a smaller fund, you need to make your checks count by deploying them into startups where they’ll make a true difference. Multi-stage funds are investing early to have the option to write a bigger check in later stages. 

• Higher exits usually mean higher entry points for investors. If you’re not a multi-billion dollar fund, you probably want to focus on investments with lower entry points and in return, lower multiples. In the end, both lead to similar quantified outcomes.

• You don’t want to invest in overcrowded spaces because your chances of realizing alpha decreases when there are more hands in the pot. Finding unpopular spaces with less competition is where Elizabeth likes to focus.

• (00:00) - 13: Elizabeth Yin of Hustle Fund has seen over 50,000 companies and made 800 investments – usually in just 30 minutes
• (01:36) - Launching LaunchBit: Getting started as a founder and helping others at the same time
• (09:30) - The first investment: Lessons in customer acquisition
• (11:48) - Valuation: Why it matters at every fund size
• (18:43) - Making checks count: Are you an option or an investment?
• (28:37) - The best investment: Lessons in learning to play the long game
• (30:59) - Entries and exits: Elizabeth's framework for evaluating investments
• (39:39) - Ignoring the crowd: Staying out of too-hot spaces like AI
• (49:52) - AI: What’s Elizabeth doing in this space?
• (53:23) - Speed round