Live data from Hacker News

Ask HN: YC new move will change SV dynamics. Are you sure for the better?

news.ycombinator.com

21–22 of 22 posts

Re: Ask HN: YC new move will change SV dynamics. Are you sure for the better?

#21
$6.45 million on 43 ultra high potential startups, I wouldn't call it a bubble. If anything, I would wonder why others didn't start earlier. I consider this move by DST and YC an innovative pareto optimal solution for both entrepreneurs and investors.

First you have many startup ventures that have limited growth due to the lack of cash, the $150k is a really good booster to achieve relatively high performance for most of the startups in this tech industry. The fact that this is a no cap/discount deal is unheard, which why it is bringing so much publicity. This is a game changer for the industry.

It might be a risky investment, but the odds are not bad since the investment is diversified into 43 talented ventures instead of one. But furthermore I think this investment is more than just money. YC and DST are investing in the future of the tech industry.

Don't think of this as an investment for the current YC portfolio, rather, think of it as a marketing strategy for future YC applicants. With this sort of publicity with DST, as well as connections with other Valley's giant investors (cough Sequoia cough) , all of the great talents across America will start to apply for Y-Combinator. I have a feeling that YC's going to find its Facebook real soon. It's just a matter of time.

Re: Ask HN: YC new move will change SV dynamics. Are you sure for the better?

#22
post #20
post #15

Earlier quoted context omitted.

I mean...this is for sure the right move to help entrepreneurs, but I'm not sure about the near future. How a small angel investor can invest in conv. debt. without cap and discount? Maybe the no cap/discount are only for SV/Yuri but I guess that in any case startups (even if they need more than 150k) will feel more confortable with some nice cash in the bank, thus they will become more picky and will ask for hyper-s…

How a small angel investor can invest in conv. debt. without cap and discount? That doesn't make it any more expensive to invest; it just decreases the eventual returns. But that variation in returns will be dwarfed by the variation caused by which startup you pick. Which means investing with no cap would be business as usual for angels. Not that they would have to in any case. We don't anticipate that the startups'…

it just decreases the eventual returns

That's exactly my fear.

But that variation in returns will be dwarfed by the variation caused by which startup you pick. Which means investing with no cap would be business as usual for angels.

Yes, I agree with the no cap thing. Yet I think smaller discounts mean that you'll get smaller returns whether you pick a "rocket" startup or a "tortoise" one.

Post reply on HN