Is YC become a bubble itself?
Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
131–140 of 199 posts
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#132This is great for YC and the new companies coming out, congrats guys.
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#133I was planning to bootstrap my new startup I have in the works, but now I think I will apply to be among the next batch of startups to be funded by Y Combinator. I just woke up to this news, and what a lovely start to my day.
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#134This sounds like a campus placement scene. If you get in a top college, you wont be even interviewed properly or see how you have changed in last few years/months. We will just hire you with fat paychecks. As shown by history - this does not work in the long run and makes things worse than better. Dont get me wrong - YC is great, pg and rest of the team do an amazing job of selecting startups. But such blanket offers…
"As shown by history - this does not work in the long run and makes things worse than better."
Any evidence for this statement? Because I think the system works just fine.
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#135$150,000 in convertible debt. With no cap and no discount. I suspect all 40 companies will take the money on those terms. You would be crazy not to.
What are the terms of the deal, specifically? How much to startups have to pay back if they take the $150K, and when do they pay it? What about valuation of the startups (ie. $150k for 10% implies $1.5m valuation)? Or is this more like a loan ($150k, pay back over X years, or upon Y liquidity event)?
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#136Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#137One potential issue I see is that YC companies might get complacent. I know that there are tons of factors that lead to the insane productivity that happens during YC, but I'm sure that the fact that many companies need to raise money or fail contributes. Also, the money might keep people working on bad ideas instead of giving up and trying something new. Obviously they could pivot, but $150k gives them the ability t…
It would go a lot farther than a year for a single founder, and even farther than that if they were willing to move somewhere cheaper than the Bay area.
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#138So this investment isn't at a valuation and the valuation is only decided at a future round at which point this converts into an amount of equity based off that valuation? I've read about convertible notes before just a little confusing at first.
In the event of a funding event (or change of control), this $150k turns into $150k worth of stock at the valuation established AT THAT TIME. Example #1: Company A takes the offer and sells for $1m in 6 months. The debt converts to $150k in stock, netting the investor $150k. Example #2: Company B takes the the offer and raises $1m at a pre-money valuation of $3m (selling 25% of the company and establishing a post-mon…
After reading this explanation, it's hard not to acknowledge this as a disruptive gamechanger. I mean, this completely changes the game for YC and every one of their successful applicants.
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#139$150,000 in convertible debt. With no cap and no discount. I suspect all 40 companies will take the money on those terms. You would be crazy not to.
What are the terms of the deal, specifically? How much to startups have to pay back if they take the $150K, and when do they pay it? What about valuation of the startups (ie. $150k for 10% implies $1.5m valuation)? Or is this more like a loan ($150k, pay back over X years, or upon Y liquidity event)?
Its convertible debt, meaning that whenever the startup raises the A series funding, at how much ever valuation, SV angel gets 150k worth percentage stock in the startup.
e.g. If the A series funding was taken at $1.5 Million valuation, the SV share in the company would be 10%. No valuation ceiling, no discount. Lower the A series valuation, better off SV angel are.
Re: Yuri Milner, SV Angel Offer Every New Y Combinator Startup $150k
#140It sucks to be a graduate from Summer 2010. Missed it by 1 term.
Come now, you were admitted into a highly-competitive incubator that attracts a lot of investor attention and puts you in touch with some very valuable mentors.
The next term might be a bit better off, but it certainly doesn't suck to be you.