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Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

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Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#121

Post by nickpp »

pclark wrote: post #113
nickpp wrote: post #98

Earlier quoted context omitted.

Read up on AOL's position during the .com boom.

can you just explain it?

Startups made "collaboration deals" announcements with AOL then got funding based on those "perspectives". Large part of that funding would go to AOL to buy a front-page add.

They say that the only limit to AOL's revenue from this was the amount of space on their website first page, not the number of interested startups.

Basically the valuation of the giants stayed up for as long as easy funding was available to .com's. Their spending habits, without being backed by actual revenues, were more than enough to sustain the stock prices of the few big ones selling to startups whatever they needed (ad space, big iron or aerons).

They all fell together when the crash came and easy funding dried up.

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#122

Post by brc »

peteforde wrote: post #97
hugh3 wrote: post #66

Earlier quoted context omitted.

Fair enough. I was just wondering whether there were any legal barriers built in to stop people doing these sorts of dodgy deals.

The SEC or IRS would probably consider this some variation of conspiracy to commit fraud. I'm not an American, so I am guessing.

Pretty sure the SEC is nowhere near these deals as all are private, probably under some type of 'sophisticated investor' rule anyway.

IRS couldn't care who ripped off whom as long as they get their pound of flesh.

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#123

Post by brc »

patio11 wrote: post #76
nostrademons wrote: post #53

Earlier quoted context omitted.

My first thought is that there must be a ridiculous amount of money floating around in the capital markets right now...

Much like I look at "200,000 visitors! Whoa!" and think it is a big number, and you guys might think "Hmm, perhaps there was something interesting going on that second.", I think we collectively share a borked perception of what constitutes a big amount of capital. $150k is a meaningful amount for an early-stage startup. Multiplied by 40, that is $6 million. $6 million is, seat of the pants calculation, two orders of…

You could also look like it this way : $6mm is about how much each set of ads in the superbowl probably costs. (just guessing)

If you compare to that, it doesn't look reckless at all.

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#125

Post by jacquesm »

pg wrote: post #100
wheels wrote: post #83

Earlier quoted context omitted.

Actually, if we assume that Heroku's post-money valuation in their first round of financing was $10m (reasonable since they raised $3m) and that they took a 30% dillution hit each time, this would have returned $2.88m to someone that got in on these terms, or not even enough to cover the investments for that batch. So either the homeruns have to be further out of the park than Heroku or (as is likely) the median retu…

I know the actual numbers for Heroku, and in that YC batch investors pursuing Ron and Yuri's strategy would have been net ahead on Heroku alone. And that batch also included 280 North, which has already been acquired for a significant amount, and several other startups which are likely to generate returns at some point.

How does it work out for all YC companies that have run and either exited or died to date?

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#126

Post by jacquesm »

nickpp wrote: post #121
pclark wrote: post #113

Earlier quoted context omitted.

can you just explain it?

Startups made "collaboration deals" announcements with AOL then got funding based on those "perspectives". Large part of that funding would go to AOL to buy a front-page add. They say that the only limit to AOL's revenue from this was the amount of space on their website first page, not the number of interested startups. Basically the valuation of the giants stayed up for as long as easy funding was available to .com…

I don't see any such strings attached to this deal.

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#127

Post by Swannie »

peteforde wrote: post #60
bl4k wrote: post #56

Earlier quoted context omitted.

you almost rescued the analogy, but not quiet.

Edits welcome. Where did I go wrong?

Hmm, it's more like investing in/always betting on a solid racing stable.

You know the jockeys they use are great (investor community), you know their horses are from great stock (top applicants), you know that the breeders, handlers and trainers (advisors and partners) are THE most experienced in the area. You know the stable only enter horses into races (markets) where they think the odds of placing are good, or the opportunity cost is so low for a potential outsider.

Sure there are other stables, and sure, some of the horses in this figurative stable are co-owned by people with very different aims from you (boot strapping cofounders?), and some are backed some of your competitors.

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#128

Post by robryan »

nickpp wrote: post #121
pclark wrote: post #113

Earlier quoted context omitted.

can you just explain it?

Startups made "collaboration deals" announcements with AOL then got funding based on those "perspectives". Large part of that funding would go to AOL to buy a front-page add. They say that the only limit to AOL's revenue from this was the amount of space on their website first page, not the number of interested startups. Basically the valuation of the giants stayed up for as long as easy funding was available to .com…

Expenditure is different this time round though, most of these startups aren't looking to blow heaps of investment on advertising and expensive offices and server costs are nowhere near where they were.

Most startups now to know that building an audience isn't enough that they need a revenue model. Many startups being built to are good fits for acquisitions by the bigger players, generally less people getting funding for things that are unworkable.

Also the public is far less adverse to sharing and purchasing online and innovations like the app stores and things like the kindle have opened up many more markets to generate revenue.

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#129

Post by robryan »

axod wrote: post #117
MichaelApproved wrote: post #108

Earlier quoted context omitted.

Maybe the extra 150k can help lower the 1/3 failure rate.

I'm pretty sure more money can actually make things worse not better.

Would be interesting to know how many YC companies failed because they couldn't get even a minimum amount of funding required to sustain themselves and continue. Of course some of these may have just burned through the extra cash then hit the same problem.

Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k

#130

Post by velshin »

nickpp wrote: post #99
trotsky wrote: post #92

Earlier quoted context omitted.

Why stop there? How about $50k to everyone in the greater bay area with 10 slides and a business plan?

Happy times are here again!

Big money to whomever can spot the point the bubble pops this time around!
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