[barry-cotter]

Think on the margin. If there’s a particularly good batch of startups probably the amount invested will be greater than average but I doubt it will be exactly proportional to quality. In the long run the ecosystem would adjust to higher quality by attracting more funding. But a company only goes through Demo Day once and they’re all competing for the capital of VCs and angels, which capital is probably medium term flexible but isn’t in the short run.

[chrisseaton]

But again what business is it of yours if someone else is faster out of the gate than you? This is like complaining that another company is better at marketing than you. I guess that's bad for you, but not their problem.

[dhhwrongagain]

I guess the premise of his comment is that there is a finite amount of money to be invested across all YC participants each season and that “back room” deals prevent startups that are less connected from having the same opportunity. Demo day could be seen as a way for all startups to compete for that finite investment on equal terms.

That’s not to say that I agree with the premise that it’s a zero-sum game. At the same time I can see eager investors losing interest in hearing from other startups after securing investments in the hot startup earlier on. A lot of startup investing isn’t merit-based, it’s more about hype and gossip than you’d expect.