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This story is part of a group of stories called Uncovering and explaining how our digital world is changing — and changing us. Trey Swann and Jason Wang had a wonky idea about taking personal information out of the databases of stores, hospitals and other types of institutions and securely storing it elsewhere. Turned away from Y Combinator at the interview stage, they were told they needed to figure out who exactly would use and pay for such a thing.
While other YC startups also quickly raised money last week, in many other cases the deals had been in the works before Tuesday, and the money came from venture capital funds rather than such a large pack of investors signed on the spot.
First of all, Swann and Wang took the initial rejection advice to heart.
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Last summer, they decided to focus TrueVault on serving customers in the health care space. HIPAA no longer applies to just hospitals … and because the law changed, make two million quickly startup like us can go after it.
This is your classic hair-on-fire problem.
Ironically, that was the original pitch Y Combinator rejected. Y Combinator teaches startups that raising funding is a distraction from the real task of building their companies.
We just wanted to get money in the bank. Swann said he got advice from a Y Combinator alum to hold his stack of cards in his hand to show how much buzz TrueVault was attracting, but his hand capacity topped out at about We think people should take the time to get to know the investors on both sides.
Swann followed up on each handshake with legal documents sent and signed via Clerky another Y Combinator startup.
Tai was one of the investors from the list that the TrueVault guys had never met before Tuesday. The number of individual investors is now up to This article originally appeared on Recode.
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