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A New Standard Deal

blog.ycombinator.com

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Re: A New Standard Deal

#41

Post by molsongolden »

joshpadnick wrote: post #33

Our startup is profitable, scaling, and in the single-digit millions of revenue per year. We don't have any investors but are still capital constrained. The default YC valuation of $125k/0.07 = ~$1.8M is way too low for us, nor do we want the requirement of having to meet with other startups once a week since we're already quite busy. Does YC have a "funding offering" for startups at our stage?

I'm not affiliated with YC and they might still be interested in your startup but I'm curious why you are interested in YC at this stage. Is it for the cap table signaling?

Your description sounds like you are beyond the accelerator/seed stage so the standard deal valuation and funding amount are too low. You also mention being too busy to take advantage of the networking opportunities provided by the program.

Being profitable but capital constrained, have you looked at debt financing opportunities? Do you need investors and a network or do you just need cash to accelerate growth?

Re: A New Standard Deal

#42

Post by joshpadnick »

molsongolden wrote: post #41
joshpadnick wrote: post #33

Our startup is profitable, scaling, and in the single-digit millions of revenue per year. We don't have any investors but are still capital constrained. The default YC valuation of $125k/0.07 = ~$1.8M is way too low for us, nor do we want the requirement of having to meet with other startups once a week since we're already quite busy. Does YC have a "funding offering" for startups at our stage?

I'm not affiliated with YC and they might still be interested in your startup but I'm curious why you are interested in YC at this stage. Is it for the cap table signaling? Your description sounds like you are beyond the accelerator/seed stage so the standard deal valuation and funding amount are too low. You also mention being too busy to take advantage of the networking opportunities provided by the program. Being…

See my reply to sibling comment for what we're looking for. Re: debt, we've considered it, but our goal is to expand knowing the economic environment might hit us harder than expected. So equity feels like a better fit.

In the end, we're looking for advice, support, and cash.

Re: A New Standard Deal

#43

Post by lacker »

rsweeney21 wrote: post #39

This is great for YC, not great for YC backed startups. By giving each company $25K less, they can now place bets on 3,000 more companies. Less money for you, less risk for them. I wonder if their success rate has declined as their batch sizes have gotten larger. YC has become less and less attractive to me over the years. Is it just me?

25k doesn’t seem all that relevant. Yeah it’s slightly better to have another 25k in the bank, but it just seems like normal fluctuation with the economic times, to me.

Re: A New Standard Deal

#44

Post by sroussey »

headcanon wrote: post #4
vikramkr wrote: post #2

A big reason they said they were raising the deal previously was the cost of living in the bay area and increased cost of starting a company today[0]. Are they anticipating that those costs are going to come down now? They suggest that this decreased amount will allow them to fund more companies, and hint that it has to do with economic conditions as well. But, if that amount of money is still needed to live in the b…

If cost of living is so high, I wonder why they wouldn't invest in a dorm-like living space for founders? I'm not familiar with the area, so I imagine there's reasons for it, but being able to focus on work instead of life-maintenance details seems like it would benefit the organization.

Boost.vc does this.

Re: A New Standard Deal

#45

Post by sroussey »

joshpadnick wrote: post #42
molsongolden wrote: post #41

Earlier quoted context omitted.

I'm not affiliated with YC and they might still be interested in your startup but I'm curious why you are interested in YC at this stage. Is it for the cap table signaling? Your description sounds like you are beyond the accelerator/seed stage so the standard deal valuation and funding amount are too low. You also mention being too busy to take advantage of the networking opportunities provided by the program. Being…

See my reply to sibling comment for what we're looking for. Re: debt, we've considered it, but our goal is to expand knowing the economic environment might hit us harder than expected. So equity feels like a better fit. In the end, we're looking for advice, support, and cash.

Just find the right VC, that’s what they do.

Re: A New Standard Deal

#46

Post by cannaceo »

vmception wrote: post #34
dmor wrote: post #16

Earlier quoted context omitted.

Rents in San Francisco’s SOMA neighborhood dropped 9% in May https://www.google.com/amp/s/sf.curbed.com/platform/amp/2020... My guess is that the departures will continue as unemployment rates grown and that when federal and state payments run out we will see a further decline. I think companies will soon have to justify why they can afford to have an office with remote as the better (and cheaper option). Other than…

Rents dropped 9% but landlords are also offering 8 weeks free Which really means an annual lease has dropped 25% quite steep, you could probably offer something closer to 38% lower.

It’s unrealistic to project those incentives in to future years

Re: A New Standard Deal

#47

Post by unknown2374 »

dmor wrote: post #16
vikramkr wrote: post #2

A big reason they said they were raising the deal previously was the cost of living in the bay area and increased cost of starting a company today[0]. Are they anticipating that those costs are going to come down now? They suggest that this decreased amount will allow them to fund more companies, and hint that it has to do with economic conditions as well. But, if that amount of money is still needed to live in the b…

Rents in San Francisco’s SOMA neighborhood dropped 9% in May https://www.google.com/amp/s/sf.curbed.com/platform/amp/2020... My guess is that the departures will continue as unemployment rates grown and that when federal and state payments run out we will see a further decline. I think companies will soon have to justify why they can afford to have an office with remote as the better (and cheaper option). Other than…

Non-AMPed link: https://sf.curbed.com/2020/6/2/21277355/san-francisco-rent-p...

Re: A New Standard Deal

#48

Post by jayparth »

joshpadnick wrote: post #40
alehul wrote: post #36

Earlier quoted context omitted.

In this case, why would you be interested in YC? What would it offer you? It seems disappointing that YC's value is no longer qualitatively good advice for early-stage founders and a close-knit community of hackers. Maybe I'm just jaded, but it appears increasingly corporatized every year. Sometimes it feels like YC might as well be a certificate — just a stamp of approval that provides access to a network of investo…

> In this case, why would you be interested in YC? What would it offer you? It's a fair point. The irony is that because our startup is doing well, we'd rather spend our time talking to customers and building the product than pitching to investors. Maybe what we're really looking for is a next-gen take on capital that would look something like this: * Minimal time needed by us to reach a decision on whether they'd li…

Sounds like you'd get what you want via a large round from an angel investor.

Re: A New Standard Deal

#49

Post by _jal »

headcanon wrote: post #4
vikramkr wrote: post #2

A big reason they said they were raising the deal previously was the cost of living in the bay area and increased cost of starting a company today[0]. Are they anticipating that those costs are going to come down now? They suggest that this decreased amount will allow them to fund more companies, and hint that it has to do with economic conditions as well. But, if that amount of money is still needed to live in the b…

If cost of living is so high, I wonder why they wouldn't invest in a dorm-like living space for founders? I'm not familiar with the area, so I imagine there's reasons for it, but being able to focus on work instead of life-maintenance details seems like it would benefit the organization.

Because only a subset of a subset of founders would tolerate living like that?

I wouldn't. Even if I wanted to live like that, this starts seeming... a bit offputting. 'Come live and work at nerd camp..."

Re: A New Standard Deal

#50

Post by _jal »

kortilla wrote: post #17
stellar678 wrote: post #7

Earlier quoted context omitted.

Among other things, I'd expect this is because YC is trying to break free of the idea that the only way to be a successful startup founder is to be a young, single, attachment-free man. Successful startups are created by all kinds of people in all kinds of different life situations, and YC needs to be careful to be inviting to as broad an array of people as possible. At the same time, I agree that dorm-style living (…

Are women unable to live in dorms?

Many women have obvious, easily predicable concerns about sharing living space with unknown men.
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