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90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

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Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#11

Post by jpwagner »

corin_ wrote: post #2

Going off on a tangent, one of the comments on the TC article seemed really odd - even by TC's standards for terrible comments. Am I the only one who finds Y combinator predatory? It preys on 20 year old kids who think they're building the next google. Am I crazy? On the actual subject of the article - if any of the four startups that haven't (yet) signed the paperwork don't end up accepting the offer, I hope they sh…

And on a pedantic note: 39/43 rounds to 91% rather than 90%

Maybe they were going for one sigfig. This comment doesn't really add anything, so next time you find yourself typing "And on a pedantic note" press delete 22 times.

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#12

Post by pkrumins »

Can anyone explain the terms "no cap" and "no discount" in "$150,000 in convertible debt. With no cap and no discount."?

I understand what a debt is, so how is "no cap and no discount debt" different from a regular debt?

Also why would you as a startup would want to take a debt?

Another question - what's the point of Yuri giving the debt, it seems he's not even asking for equity in return?

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#13

Post by rmorrison »

brudgers wrote: post #7

The $150k offer reminds me of a rumor about the way in which Subway selected franchise locations back in the 1980's. Subway wouldn't do extensive market research or study traffic counts. Instead, they would see where there was a McDonalds franchise and then open a franchise in the same catchment area. At least that was the rumor (not to compare YC to McDonalds or Hamburger University).

Supposedly the same thing happens with coffee too. Starbucks does the expensive market research, and then other chains build near Starbucks.

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#14

Post by burgerbrain »

corin_ wrote: post #6
burgerbrain wrote: post #3

Earlier quoted context omitted.

Maybe that commenter is being a bit harsh, but I certainly also get that vibe. At the very least the whole thing has a "dotcom bubble, version 2.0" feel.

Seems to me that the people who get accepted by YC (and, most likely, the majority of the people who apply to YC) are the kind of people who would be doing their stuff with or without the help of YC. As to a bubble - without getting into that debate now, even if it later turns out that we're in a massive bubble right now, YC are investing money/time with the purpose of making money, so they're in the same situation a…

Nobody ever wants to see a bubble fail, that's part of what makes them so dangerous. People go to extraordinary lengths to ignore warning signs of events they don't want to happen. That's what happened the first time around, and I fear that's what will happen this time.

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#15

Post by philwelch »

brudgers wrote: post #7

The $150k offer reminds me of a rumor about the way in which Subway selected franchise locations back in the 1980's. Subway wouldn't do extensive market research or study traffic counts. Instead, they would see where there was a McDonalds franchise and then open a franchise in the same catchment area. At least that was the rumor (not to compare YC to McDonalds or Hamburger University).

I heard the rumor about Burger King (combined with the idea that McDonalds would do the extensive market research and study traffic counts and so forth.)

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#16

Post by jcborro »

jpwagner wrote: post #11
corin_ wrote: post #2

Going off on a tangent, one of the comments on the TC article seemed really odd - even by TC's standards for terrible comments. Am I the only one who finds Y combinator predatory? It preys on 20 year old kids who think they're building the next google. Am I crazy? On the actual subject of the article - if any of the four startups that haven't (yet) signed the paperwork don't end up accepting the offer, I hope they sh…

And on a pedantic note: 39/43 rounds to 91% rather than 90% Maybe they were going for one sigfig. This comment doesn't really add anything, so next time you find yourself typing "And on a pedantic note" press delete 22 times.

And on a pedantic note, presumably your cursor would be at the end of the text you find yourself typing, and thus require backspace not delete.

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#17

Post by redthrowaway »

enjo wrote: post #4
burgerbrain wrote: post #3

Earlier quoted context omitted.

Maybe that commenter is being a bit harsh, but I certainly also get that vibe. At the very least the whole thing has a "dotcom bubble, version 2.0" feel.

I'd be interested to hear you elaborate on that. I keep hearing comparisons to the tech bubble (particularly around LinkedIn's IPO), but I'm having trouble seeing the parallels.

I think everyone can agree that it's booming, in much the same way that the housing market was booming. Tech is sexy again, and that's driving investment and throwing money into the ecosystem that otherwise wouldn't be there. That said, the only real test of bubbledom is whether the valuations are sustainable, and whether startups generate profit commensurate with the money being sunk into them.

Google, Apple, and facebook aren't going to continue making $65MM talent acquisitions indefinitely, so at some point the penny will drop. When it does, the question of whether we'll have a popped bubble or an adjustment will be decided on the individual financial condition of the startups in question.

Could the current ecosystem be sustained if Google, Facebook, Apple, and AOL acquisitions were no longer a reality? No. Too many people are investing in features, not companies. Those startups can't survive on their own if there isn't a real possibility of a big exit through acquisition.

Nevertheless, it isn't 1999. Groupon is IPOing with at least some real revenue and exponential growth, and LinkedIn has a solid, if not expansive, userbase. If there is a bubble, it should only affect the startup world, and even then only the companies that can't survive on their own.

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#18

Post by shub »

jcborro wrote: post #16
jpwagner wrote: post #11

Earlier quoted context omitted.

And on a pedantic note: 39/43 rounds to 91% rather than 90% Maybe they were going for one sigfig. This comment doesn't really add anything, so next time you find yourself typing "And on a pedantic note" press delete 22 times.

And on a pedantic note, presumably your cursor would be at the end of the text you find yourself typing, and thus require backspace not delete.

On some systems delete is backspace when you're at the end of a line.

Re: 90% of Y Combinator Startups Have Already Accepted The $150k Start Fund Offer

#20

Post by dstein »

rmorrison wrote: post #13
brudgers wrote: post #7

The $150k offer reminds me of a rumor about the way in which Subway selected franchise locations back in the 1980's. Subway wouldn't do extensive market research or study traffic counts. Instead, they would see where there was a McDonalds franchise and then open a franchise in the same catchment area. At least that was the rumor (not to compare YC to McDonalds or Hamburger University).

Supposedly the same thing happens with coffee too. Starbucks does the expensive market research, and then other chains build near Starbucks.

I thought Starbucks had simply reversed the process. They appear to open a coffee shop on every corner (sometimes several on the same corner) and just close the ones that don't do well.
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