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Twice a year, the crème de la crème of Silicon Valley flocks to the Computer History Museum in Mountain View to listen to 100 or so startups deliver carefully curated pitches at the widely popular Y Combinator (YC) Demo Days.

To select the batches, the accelerator program reviews countless applications from various sectors and countries. According to YC partner Adora Cheung, these were some of the trends that stood out this year: artificial intelligence and machine learning (especially in health care), tools for machine learning engineers, augmented reality, cryptocurrency products, personalized consumer packaged goods (CPGs), “and also lots of biotech,” Cheung wrote, in an email to VentureBeat.

When asked whether the accelerator program is seeing an increasing number of female-led startups, Cheung replied: “Yes, but I can’t tell if the lift is just a random blip for now because it’s small. We have a lot of work to do to get to a statistically significant change.”

The accelerator program already has an annual Female Founders Conference, where female YC alumni take the stage to share their experiences and progress.

Internally, YC is also doing a great job at promoting gender equity, as one-third of its partners are women. This includes founding partner Jessica Livingston, partners Cheung, Carolynn Levy, Kat Manalac, and Kirsty Nathoo, and, more recently, Anu Hariharan, who joined the accelerator as a partner of YC Continuity, a growth fund for later-stage startups.

VentureBeat checked in with Hariharan to learn more about Continuity’s recently launched Growth Stage Program, the difficulties of raising a series A, and what investments she and partner Ali Rowghani are eyeing for 2018.

(This interview has been edited for clarity and length.)

VentureBeat: You oversee the Continuity Fund with Ali. What are some of the challenges that startups face when raising capital post seed?

Anu Hariharan: Raising a series A is quite different from raising a seed round. The series A process tends to be more structured and formal, and potential series A investors expect you to pitch using a deck because they are interested in the story about your company. Your ability to convey that story is equally important because it demonstrates your ability to recruit and attract the right senior execs as you scale the company. It also demonstrates your ability to fundraise in the future, especially as you start interacting with growth investors. The deck at a high level should touch on three to four key elements:

  1. Market opportunity
  2. Product/market fit: What pain point are you solving, and what are the proof points of an early product market fit?
  3. Team: Why this team and why now?
  4. Use of proceeds: How much are you planning to raise, and what milestones do you plan to hit with that cash?

VB: Are you hoping that with the Growth Stage Program, startups will be better equipped when scaling?

Hariharan: One of the common mistakes we see founders make post-series A is that they fail to scale as a CEO. The transition from being the “doer-in-chief” (pre-series A) to “company-builder-in-chief” (post-series A) is extremely important. Once you have 30 employees, you have to spend more time leading (recruiting, building a team, directing activities of others) and less time doing the work yourself (coding, answering support tickets, etc.). This is often hard to do. Our hope is that the growth stage program can help our founders make that transition by learning from each other and from expert practitioners who share their lessons.

VB: What types of investments is the Continuity Fund targeting for next year? Are any non-YC startups piquing your interest?

Hariharan: Continuity invests in two ways. The first is pro rata investing. We exercise YC’s pro rata investing rights in all follow-on priced financing rounds up to a certain post-money valuation, beginning with a company’s first priced round. Second, growth investing. We look for companies with a strong product market fit, a clear business model, and a customer traction demonstrating they have the ability to scale. Our primary focus is YC startups, because why wouldn’t it be?

VB: Some argue that while VCs invest in cutting-edge technologies, the traditional VC investment model is antiquated. Is YC trying to stay ahead of the curve by integrating AI-powered softwares in deal sourcing, due diligence, etc.?

Hariharan: One of the most time-consuming tasks is reading applications. We’re building AI to read alongside us and point out things in the applications we may have missed.

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