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Sam Altman: ‘Too many’ Y Combinator companies raise money

venturebeat.com

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Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#51

Post by beambot »

sama wrote: post #28
jpao79 wrote: post #10

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.

This could be an interesting (end-around) way to create a US Inc, as you discussed in your UBI interview: https://spectacle.com/001/sam-altman-interview-universal-bas...

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#52

Post by JSONwebtoken »

jpao79 wrote: post #10

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…

Wow imagine a UBI concept that has a barrier to entry dependent on one's merit and qualifications and stipulates that the recipient contributes a certain number of hours per week to a pursuit that generates a positive economic input. This is a brilliant idea, if only somebody had come up with this earlier.

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#53

Post by simonebrunozzi »

sama wrote: post #28
jpao79 wrote: post #10

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.

Sam,

let me offer one humble suggestion.

1) UBI (or anything similar) in Oakland is expensive. Back of the napkin calculation: $1,000/month/person = $12,000 = you need about $0.5M in capital to maintain that level of basic income without reducing the capital over time (I am applying the usual 4% interest on capital, for passive income - the number might be wrong or might change in the future (see Piketty) but let's use it for now). Instead, UBI in other regions of the world can be a small fraction of it (I can easily imagine 1/10th of what it costs in Oakland = $50,000).

2) You have ~15,000 YC alumni. Ask each one of them to commit at least 50k each (or multiples of it), to offer UBI to 15,000 people in a developing country. In exchange for that, you might give them a tiny share of YC (not equivalent to 50k, but perhaps a smaller amount). It shouldn't be seen as a great investment for them; it should be instead done mostly out of altruism.

3) UBI provided to 15,000 people (or possibly more) is the right type of experiment, at a big enough size. It's essentially a big village, or a number of small villages. It's also good to see this applied in a developing country: the impact can really be seen and observed properly.

4) I am pretty sure that there would be a number of volunteers willing to commit their time to observing and measuring the experiment, wherever it will be (however, I suggest to pick an English-speaking developing country, as it makes many other things easier).

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#54

Post by benatkin »

ukulele wrote: post #26
benatkin wrote: post #23

Earlier quoted context omitted.

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,…

By this logic, YC is investing even before the point that others shouldn't be investing, which would make even less sense.

Hmm, I was going to say that at YC they're investing on the team more than the product, and they can afford to do that, but I think investing primarily based on the team is common after the seed round too. So I concede that it doesn't make logical sense that the YC startups are too early to invest, if you have the right investor, that is going to play a similar role to YC.

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#55

Post by sillysaurus3 »

JSONwebtoken wrote: post #52
jpao79 wrote: post #10

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…

Wow imagine a UBI concept that has a barrier to entry dependent on one's merit and qualifications and stipulates that the recipient contributes a certain number of hours per week to a pursuit that generates a positive economic input. This is a brilliant idea, if only somebody had come up with this earlier.

It'd be funny snark if it were true, but the point is that the only qualification is to be a member of YC. Nothing else matters, including how much or little effort you put in.

Also, members of YC are members for life unless they get excluded. It doesn't matter if their company fails.

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#56

Post by muzani »

ukulele wrote: post #27
sjbp wrote: post #22

Earlier quoted context omitted.

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.

But YC is already making the claim that every company in the program is ready for investment. It's doing so by investing in them.

They invest based on very little data. It's more a gamble, but they gamble at scale, with good odds.

It doesn't mean every one of them is good. They don't know which one is good with the data they had, but are wise enough to accept they know little and instead chose to invest in several.

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#57

Post by sillysaurus3 »

cperciva wrote: post #37

This seems like a signalling problem. If a YC company looks for funding at some point after demo day, the first question VCs ask is going to be "why didn't you raise money at demo day?" -- so there's going to be an incentive for companies to go after money at demo day even if they're not ready simply because it will be much harder if they wait. I wonder if it would be effective to tell YC companies that they can part…

This is one reason ICOs will hopefully disrupt VC strangehold. It's senseless for the fate of good companies to be determined by bogus social dynamics.

I get the regulation argument, but protecting stupid people from themselves is a losing battle. Everyone will know not to mortgage your house to invest in a new startup the same way everyone knows not to do heroin. Some people will anyway. But they already can participate in ICOs illegally, so it's a pretty decent analogy.

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#58

Post by [deleted] »

sama wrote: post #28
jpao79 wrote: post #10

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.

[deleted]

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#59

Post by [deleted] »

soared wrote: post #50
jpao79 wrote: post #10

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…

Not even remotely what UBI is.

[deleted]

Re: Sam Altman: ‘Too many’ Y Combinator companies raise money

#60

Post by JSONwebtoken »

sama wrote: post #28
jpao79 wrote: post #10

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.

The quotes you provided in the article weren't clear on this: did you mean to say that some of these companies don't deserve funding or that it would be a better choice for them to continue to grow and operate without raising capital?
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