Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
1–10 of 44 posts
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#2Thanks, I'll forward this the next time they ask for money. A shotgun approach to investing other people's money in tech startups is fine, but drawing down the $__B endowment in 2008-2009 to avoid salary freezes was too risky.
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#3I wonder if YC's seed investment being LP money changes the incentives/advice on the part of the partners. (?)
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#4Thanks, I'll forward this the next time they ask for money. A shotgun approach to investing other people's money in tech startups is fine, but drawing down the $__B endowment in 2008-2009 to avoid salary freezes was too risky.
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Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#5>Each startup that goes through the three-month program now receives$120,000 in cash — $20,000 from Y Combinator, plus $100,000 from the outside investors – in exchange for 7% equity in their company.
$120k for 7% in a company!? Is that really a favorable term to startups? There's no way I would ever, EVER sell 7% of my company for a such a small sum. Who would sell out their passion for such a pittance?
It's very possible I'm missing something here, because my impression is that YC truly tries to act as a partner with founders. I just can't see giving a go at a startup - with all that entails - for an idea I believe is worth only $1.7M (even at the nascent stage).
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#6>Each startup that goes through the three-month program now receives$120,000 in cash — $20,000 from Y Combinator, plus $100,000 from the outside investors – in exchange for 7% equity in their company. $120k for 7% in a company!? Is that really a favorable term to startups? There's no way I would ever , EVER sell 7% of my company for a such a small sum. Who would sell out their passion for such a pittance? It's very p…
Pretty sure it used to be <$20k for the same ~7%. The main value of YC has always been the training, network, and vote of confidence, not the funding. Not everyone finds it worth it for their particular situation, but many do.
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#7>Each startup that goes through the three-month program now receives$120,000 in cash — $20,000 from Y Combinator, plus $100,000 from the outside investors – in exchange for 7% equity in their company. $120k for 7% in a company!? Is that really a favorable term to startups? There's no way I would ever , EVER sell 7% of my company for a such a small sum. Who would sell out their passion for such a pittance? It's very p…
You are wrong. So, so, wrong.
If you were allowed to, the best thing you could possibly do for your early stage company would be to go take $100,000, nay $500,000 plus 30% of your stock and give it to Paul Graham in exchange for being let in to YC.
It's not just the education you get, nor the peer pressure of being in a 'class' with other companies, it's also the social cache, the network of other YC funders, the access to investors, and lately, the benefits of YC punishing investors who treat their portfolio companies badly.
Good/Great investors are all people you would always pay to have on your board, and gunning for your company. The money they give you helps keep the lights on and grow, but it's really a proxy for getting (and holding) their attention and focus on what you need to succeed.
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#8>Each startup that goes through the three-month program now receives$120,000 in cash — $20,000 from Y Combinator, plus $100,000 from the outside investors – in exchange for 7% equity in their company. $120k for 7% in a company!? Is that really a favorable term to startups? There's no way I would ever , EVER sell 7% of my company for a such a small sum. Who would sell out their passion for such a pittance? It's very p…
It's a business decision. When it doesn't make sense as one or when the criteria are something else, then it shouldn't be done. On the other hand, when it makes business sense, it makes business sense.
Anyway, my understanding is that those terms are relatively favorable in comparison with those oft times offered by other investors.
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#9>Each startup that goes through the three-month program now receives$120,000 in cash — $20,000 from Y Combinator, plus $100,000 from the outside investors – in exchange for 7% equity in their company. $120k for 7% in a company!? Is that really a favorable term to startups? There's no way I would ever , EVER sell 7% of my company for a such a small sum. Who would sell out their passion for such a pittance? It's very p…
Think again: the _first_ valuation of your company - that is not even incorporated - is 1.7 million and you keep 93%. If you know about a better deal then please let us know! :)
Re: Stanford, Michael Bloomberg Now Back Every Y Combinator Startup
#10You know what would be really awesome / disruptive / game-changing? If YC funded the program via crowdfunding (eg. JOBS Act) monies so that normal peons (sorry, "non accredited investors") could realize gains from a fund of early startups while effectively locking out all these institutional investors.
This would be a real coup for people who believe in Basic or Guaranteed Minimum Income [1], like Sama.
[1] http://blog.samaltman.com/technology-and-wealth-inequality