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Why I turned down my Y Combinator interview

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Re: Why I turned down my Y Combinator interview

#61

Post by edouard-harris »

m_ke wrote: post #22

These days going through Y Combinator practically guarantees success for B2B/SaaS startups. Their network is so big now that you can hit growth targets that most VCs look for just by selling to other YC companies. Then you can throw the late stage logos on your landing page and use that to lure in enterprise customers.

Among many of YC's advantages, they do signal boost your company in a lot of important ways. But if you don't make something people want, no accelerator in the world will save your company from dying.

Re: Why I turned down my Y Combinator interview

#62

Post by reaperducer »

docker_up wrote: post #7

I think the biggest difference between today and 20 years ago when I first go into Silicon Valley is that most founders are generally already planning their exit. There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc". And unfortunately this is a legitimate play because it leads to quick payouts so it motivates founders and VCs alike. It's a f…

There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc"

Yep. I worked with a startup that, after a few months, obviously had this as its primary motive. They made an app similar to another big-name (at the time) app, with the intent of having that bigger app buy them out.

When the big fish didn't swallow their little fish they blew all of their remaining cash on a big party in New York and flew in all kinds of bold-faced names to bring attention to themselves. And it worked. A few months later they were eaten by another company, everyone lost their jobs, and the founders retired at 31.

The irony is that a few months after that, its only competitor "pivoted" and abandoned the space it was competing in. If the small fish had held on, it would have owned that market.

Re: Why I turned down my Y Combinator interview

#63

Post by p1esk »

scarface74 wrote: post #57
ausjke wrote: post #47

Earlier quoted context omitted.

That. Until you become a founder yourself and know how hard it has been might change your mind. Otherwise we're all just employees. One big difference is that founders take bold moves and risks. I also consider this is capitalism at work.

What bold move are they taking if they are using other people’s money?

The bold move of starting a company, obviously, rather than working for someone else, like most regular people usually do.

Re: Why I turned down my Y Combinator interview

#64

Post by CalChris »

rsweeney21 wrote: post #20
EGreg wrote: post #10

Can someone elaborate on this? It makes no sense to me: The risk profile of your company increases dramatically when you take VC funding. You start spending more money than you are earning, your focus shifts to raising your next round, and your VC now has veto authority over the sale of your company. Your company is now a ticking time-bomb. You can literally NOT do those things. All the VC has is signaling. Theh can’…

VCs purchase a different class of stock than you have as a founder, called preferred shares. It is standard to require a majority of the preferred shares to authorize a sale of the company. See this article for a standard, clean series A term sheet. https://blog.ycombinator.com/a-standard-and-clean-series-a-t...

Approval of the Preferred Majority required to ... including a Company Sale.

However, that is a Series A term sheet. When you turned down YC, wasn't that at the seed stage? You would have still retained control until you converted later.

But are you saying that even only accepting a SAFE puts you on an inevitable path?

Re: Why I turned down my Y Combinator interview

#65

Post by lozzo »

reaperducer wrote: post #62
docker_up wrote: post #7

I think the biggest difference between today and 20 years ago when I first go into Silicon Valley is that most founders are generally already planning their exit. There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc". And unfortunately this is a legitimate play because it leads to quick payouts so it motivates founders and VCs alike. It's a f…

There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc" Yep. I worked with a startup that, after a few months, obviously had this as its primary motive. They made an app similar to another big-name (at the time) app, with the intent of having that bigger app buy them out. When the big fish didn't swallow their little fish they blew all of their…

It's hard to fully appreciate this story without you naming names. Any reason why not to ?

Re: Why I turned down my Y Combinator interview

#67

Post by arthurcolle »

scarface74 wrote: post #57
ausjke wrote: post #47

Earlier quoted context omitted.

That. Until you become a founder yourself and know how hard it has been might change your mind. Otherwise we're all just employees. One big difference is that founders take bold moves and risks. I also consider this is capitalism at work.

What bold move are they taking if they are using other people’s money?

It's not like the money's a gift... you have various metrics presumably that you have to hit once you raise money, especially once you're past the angel/seed stages.

Re: Why I turned down my Y Combinator interview

#68

Post by m_ke »

edouard-harris wrote: post #61
m_ke wrote: post #22

These days going through Y Combinator practically guarantees success for B2B/SaaS startups. Their network is so big now that you can hit growth targets that most VCs look for just by selling to other YC companies. Then you can throw the late stage logos on your landing page and use that to lure in enterprise customers.

Among many of YC's advantages, they do signal boost your company in a lot of important ways. But if you don't make something people want, no accelerator in the world will save your company from dying.

My statement was conditioned on getting into YC, which is really hard to do if your product sucks or has no traction.

Even with a weak product you'll be in a much better position because you'll able to meet with a lot of other founders/potential customers and get valuable feedback.

Re: Why I turned down my Y Combinator interview

#69

Post by idlewords »

tptacek wrote: post #40
docker_up wrote: post #7

I think the biggest difference between today and 20 years ago when I first go into Silicon Valley is that most founders are generally already planning their exit. There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc". And unfortunately this is a legitimate play because it leads to quick payouts so it motivates founders and VCs alike. It's a f…

I've been working at startups since the mid-1990s and building-to-flip was as prevalent then as it is now. I'd say the much bigger change is that randos have a real shot at getting funded today, due to YC and the syndicated convertible debt round. It's hard to overstate how much more open the funding market is now than it was even 15 years ago.

Funny what happens when you have stupid amounts of institutional money pour into a sector for 15 years.

Re: Why I turned down my Y Combinator interview

#70

Post by scarface74 »

arthurcolle wrote: post #67
scarface74 wrote: post #57

Earlier quoted context omitted.

What bold move are they taking if they are using other people’s money?

It's not like the money's a gift... you have various metrics presumably that you have to hit once you raise money, especially once you're past the angel/seed stages.

It’s not a gift, but if they fail, they have lost nothing but time - if they are paying themselves a salary.
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