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Is Y Combinator worth the money?

news.ycombinator.com

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Re: Is Y Combinator worth the money?

#201

Post by robocat »

pcthrowaway wrote: post #185
robocat wrote: post #145

Earlier quoted context omitted.

YC only invests in companies that aim big, and have a big opportunity. So you would have to lie to get them to invest, and they likely would catch you out lying. http://paulgraham.com/growth.html and http://paulgraham.com/mean.html gives you some idea (also see http://paulgraham.com/articles.html ). Giving 7%, but getting say 20% extra when you sell, could be financially sensible (depending on your other costs and be…

I have no intention of lying, I'd rather bootstrap or shop for other investors who don't have the same expectation of 'growth potential'. The YC model is.. it's own thing.. seems like in the current economy, they need every company to be a potential unicorn, which works out for them because they're doing it at scale, and the ones that deliver, deliver outsized returns. But possibly doesn't work out as well for the fo…

Agree. I have yet to see YC publish figures on founder returns - they mostly talk about the successes. https://jaredheyman.medium.com/on-the-life-and-death-of-y-co...

Amazing video on bootstrapping: https://youtube.com/watch?v=otbnC2zE2rw

There are funds trying to succeed at the many-small-successes model of investing - personally I am skeptical (from my own experience) because the natural failure rate is so high (before stressors due to investors). Edit: and there is a strong negative selection bias - small software businesses asking for money is a loud signal that they are much less likely to be successful at all IMHO. Relevant article about Mittelstands ”We need a middle class for startups”: https://neilthanedar.com/we-need-a-middle-class-for-startups... and my comment https://news.ycombinator.com/item?id=31350478

Re: Is Y Combinator worth the money?

#202

Post by r12343a_19 »

hassy wrote: post #25

Did YC S21 which was an all remote batch. my 2c. YC is 100% what you make of it. It's not a lean back experience. I did not meet most of the companies in my batch but I've gotten to know many founders through YC that I would not have otherwise. Founders that have been source of advice and support. Network of clients - yep don't go into YC expecting to sell to other YC cos. It is easier to get warm intros through the…

> YC is 100% what you make of it

This is 100% what survivor bias sounds like.

Every party is what you make of it. Every job. Every business. Every interaction.

Except, you know, when this other thing is overhyped and one hopes getting there helps and it turns out... it's not any different than anything else?

Re: Is Y Combinator worth the money?

#203

Post by jedberg »

vmatsiiako wrote: post #158
rvnx wrote: post #135

Earlier quoted context omitted.

According to the contract, in exchange of 375K USD (+/- salary for 1.5 developer) you agree to this when you sign the MFN: == If the Company issues any Subsequent Convertible Securities with terms more favorable than those of this Safe (including, without limitation, a valuation cap and/or discount) prior to termination of this Safe, the Company will promptly provide YCombinator with written notice thereof, together…

What I'm saying is that you can issue the exact same $375k YC MFN SAFE to other investors (with a different $$ value). This will not trigger the MFN because the terms are absolutely the same

Most small angels, like myself, will not do an uncapped SAFE. It's too risky when I'm only putting in $25K. I'd like to know at least very roughly how much I will own when it converts.

I don't want to be in a situation where they never raise again and then exit for $100M five years later and I only get my small little piece with no benefit for being in early.

Re: Is Y Combinator worth the money?

#204

Post by ntonozzi »

tschesnok wrote: post #177

Wow. In the footnote they mention they shut down right after demo day? Perhaps I'm old school but I always had a huge feeling of indebtedness to my investors. So here they lose all the money within 3 months and write a scathing review to boot? Is it not a two way street?

Typically and hopefully they would have to return the money that they did not spend, and it's better for the investors to get that portion of their money back than to have founders run it into the ground.

Re: Is Y Combinator worth the money?

#205

Post by dang »

b112 wrote: post #197
b112 wrote: post #7

Earlier quoted context omitted.

When a woman is pregnant, the fetus tries to grow as large as possible, while to womb/woman works to restrict growth. Too much of either is not good, so perhaps the same is true here.

Cannot even remotely understand the logic in this getting flagged. People are upset with the idea, that the mother and the fetus form a feedback loop, to ensure the baby is as large as possible, while still being able to exit the womb?? Yeah, horrible, flaggable idea. Even if one disagrees, what is the logic in flagging? "Ew, ick! Birth!"?!? Bizarre.

> the mother and the fetus form a feedback loop, to ensure the baby is as large as possible, while still being able to exit the womb

That's quite different from what you said in the GP comment. This is a more neutral way to put it.

I've turned off the flags on the GP comment now, but I'm leaving the subthread collapsed because it's off topic.

Re: Is Y Combinator worth the money?

#206

Post by acecreamu »

tschesnok wrote: post #177

Wow. In the footnote they mention they shut down right after demo day? Perhaps I'm old school but I always had a huge feeling of indebtedness to my investors. So here they lose all the money within 3 months and write a scathing review to boot? Is it not a two way street?

That's why we did it, instead of spending money dragging the decision or even taking more money and spending them while building mediocre company, we wind up operations in a shortest term, and returned everything, to minimize damage for investors. We even cancelled the checks which were about to get wired.

How to perceive it—is up to you, we sleep well because we did the best we could in that situation.

Re: Is Y Combinator worth the money?

#207

Post by solveit »

Dylan16807 wrote: post #166
lazide wrote: post #164

Earlier quoted context omitted.

that you got advice for the particular areas you needed and it was not always bad is actually a pretty major step up from what you’d otherwise be dealing with, in my experience.

If you could find a source of advice for areas you need that is always bad , that would be amazingly useful. Each piece of advice is another pitfall you can confidently avoid.

Eh, I know you're being facetious but the opposite of bad advice is not good advice. Things are more complicated than that. Which is why even a 20% hit rate (say) could be very impressive.

Re: Is Y Combinator worth the money?

#208

Post by ushakov »

acecreamu wrote: post #206
tschesnok wrote: post #177

Wow. In the footnote they mention they shut down right after demo day? Perhaps I'm old school but I always had a huge feeling of indebtedness to my investors. So here they lose all the money within 3 months and write a scathing review to boot? Is it not a two way street?

That's why we did it, instead of spending money dragging the decision or even taking more money and spending them while building mediocre company, we wind up operations in a shortest term, and returned everything, to minimize damage for investors. We even cancelled the checks which were about to get wired. How to perceive it—is up to you, we sleep well because we did the best we could in that situation.

You sound like a very self-reflected founder to admit this!

Wish more YC founders could learn from you

Re: Is Y Combinator worth the money?

#209

Post by acecreamu »

jawns wrote: post #156

At the very bottom, in a post-script: > The constant comparison and growth benchmarking triggered us to look differently at our business and we decided to wind up its operation right after the Demo Day. What happens in this scenario? YC gave them $500K in exchange for 7% of the business, and then they immediately shuttered the business? Did they get to keep the $500K?

We didn't take 375k in fact. In W22 batch they were optional, and would trigger MFN for many. As for the rest of money, we returned what has been left. That's why closing so rapidly - to be able to return more.

Re: Is Y Combinator worth the money?

#210

Post by alfl »

We were W22. It was a HUGE batch and we were raising at a large valuation, during the boom, so the YC standard deal didn't make financial sense for us.

IIRC as soon as we signed the deal they would have 10x'd.

Overall, I think not signing was a mistake. But YC is very expensive.

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