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Unless I am mistaken, literally all YC companies raise money. They do it from YC itself. There are lots of ways you could spin it, but how can Sam justify such a statement when they've invested in all of these companies too?
> I think there’s sort of this halo around being a Y Combinator company, where companies raise money that perhaps shouldn’t. This is such a strange sentiment. YC has invested in all of these companies, then they pooh pooh others that follow their lead?
One useful counterfactual is thinking about what our comments would be if Sam said "more YC company should raise money immediately after the program". I think it would be very hard to defend that every (most?) startup is ready for such a commitment at that very specific moment in time.
Unless I am mistaken, literally all YC companies raise money. They do it from YC itself. There are lots of ways you could spin it, but how can Sam justify such a statement when they've invested in all of these companies too?
Maybe I'm misinterpreting but in a way it sounds like he's saying that YC sometimes (often?) bet on ideas / teams that turn out to be crap. Well, of course that's going to be true. Just they same, prestige or not, track record or not, it's also possible that not all ideas / teams were the right fit for the YC program. That is, yes within YC they were bad bets, but that's not to say things won't change once they're aw…
It's hard for 3rd parties to discern this, when YC has given the very companies being criticized seed money. Pair that with the competitiveness between angels and VCs, plus FOMO; and it gets even harder.
Is there any way for YC to build its prestige and the sense of value it delivers without being a positive signal?
Unless I am mistaken, literally all YC companies raise money. They do it from YC itself. There are lots of ways you could spin it, but how can Sam justify such a statement when they've invested in all of these companies too?
The difference between the first round and future rounds can be significant. Sometimes there's no company, and since there's no company, a company isn't raising money. Often the prospective founders don't start working on their product until they raise, even making it contingent on raising money, which means up until Demo Day the founders haven't tried to build their product and raise money at the same time. Finally,…
> I think there’s sort of this halo around being a Y Combinator company, where companies raise money that perhaps shouldn’t. This is such a strange sentiment. YC has invested in all of these companies, then they pooh pooh others that follow their lead?
I think it's an honest comment about the "Halo-effect" the YC stamp can have on investors. One useful counterfactual is thinking about what our comments would be if Sam said "more YC company should raise money immediately after the program". I think it would be very hard to defend that every (most?) startup is ready for such a commitment at that very specific moment in time.
Was just thinking the other day, it'd be super interesting if YC ran some YC Equity/YC UBI experiments within its own network. Basically in joining YC, each YC member would be granted a percentage of YC's 7% stake in all of the YC companies which would reduce their need to fundraise. In theory, YC members should all be highly motivated achievers and use that percentage stake to move their diverse set of businesses fo…
On another note, it's those investors money to waste, if they want to burn it on companies that don't make it then in the long term this will self-correct because there will be less money available from such investors.
Was just thinking the other day, it'd be super interesting if YC ran some YC Equity/YC UBI experiments within its own network. Basically in joining YC, each YC member would be granted a percentage of YC's 7% stake in all of the YC companies which would reduce their need to fundraise. In theory, YC members should all be highly motivated achievers and use that percentage stake to move their diverse set of businesses fo…
I am interested in trying some version of this! Have been thinking about all the edge cases.