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Why YC went to DC

ycombinator.com

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Re: Why YC went to DC

#291

Post by zacharycohn »

raincole wrote: post #278
jandrewrogers wrote: post #56

Earlier quoted context omitted.

Of these, the Section 174 debacle (software R&D amortization) is arguably the problem that needs to be addressed most urgently.

Could someone elaborate this for an uninformed like me? Does it mean if you (a company) pay $1M as salary this year, only $0.2M can be treated as cost?

Essentially. An extremely oversimplified scenario: On paper if you made $1M in revenue, and had $1M in salary expenses that were all R&D, you would deduct $200k of that salary and be left with $800,000 in "profit" that you have to pay taxes on.

Except you don't have $800k. You have $0k.

Re: Why YC went to DC

#292

Post by sethammons »

guyfromfargo wrote: post #150
jandrewrogers wrote: post #56

Earlier quoted context omitted.

Of these, the Section 174 debacle (software R&D amortization) is arguably the problem that needs to be addressed most urgently.

Completely agree. I am a bootstrapped SaaS owner and we cleared about $1M in revenue, $1,200 in profit, and $90k in taxes. Bootstrapping a tech company in a post Section 174 world doesn’t even seem feasible. I can’t believe this issue isn’t being taken more seriously.

Was that profit after taxes? Or did it cost you $88k to run the business? Did you get to pay yourself?

Re: Why YC went to DC

#293

Post by senko »

zer00eyz wrote: post #105
dlkf wrote: post #94

Earlier quoted context omitted.

> It means that google doesn't have to aquire-hire your team, they can just poach all of them wholesale. Imagine a skilled worker taking a new job that pays better. What a nightmare scenario.

This isnt about workers. Let's say tomorrow that you find a better way to do search. It's going to crush google, and MS. You hire a team, smart people the VC's throw money at you. Everyone is happy. Your growing and the next darling of tech. Google comes in and offers to buy you out. You decline cause you know that they are blockbuster and your Netflix. In retaliation google hires all your staff, and sends them to th…

Besides a lot of other reasons others already commented about: the noncompete wouldn't prevent that, as Google could hire them for any position that isn't connected to search - say, Android tech support - and allow them the roof access.

You would need to ban them from working ENTIRELY, and no sane person would accept that.

Alternatively, you might realize that NDAs and IP ownership is still a thing, Google can't just copy/paste your code, and if these people are truly irreplaceable, they should either be your cofounders or founding engineers with a significant equity stake.

Not slaves.

Re: Why YC went to DC

#295

Post by Thorrez »

sethammons wrote: post #292
guyfromfargo wrote: post #150

Earlier quoted context omitted.

Completely agree. I am a bootstrapped SaaS owner and we cleared about $1M in revenue, $1,200 in profit, and $90k in taxes. Bootstrapping a tech company in a post Section 174 world doesn’t even seem feasible. I can’t believe this issue isn’t being taken more seriously.

Was that profit after taxes? Or did it cost you $88k to run the business? Did you get to pay yourself?

>Or did it cost you $88k to run the business?

Why do you speculate that number? With $1M in revenue and $1.2k in profit, there must have been $998.8k in expenses. I assume "pay yourself" was part of the $998.8k. But I don't know the answer to the other part of your question: I don't know if the $90k in taxes are included in the $998.8k expenses.

Re: Why YC went to DC

#296

Post by badgersnake »

stackskipton wrote: post #47
candiddevmike wrote: post #35

Earlier quoted context omitted.

> * Automate government-driven compliance standards - enable small businesses to sell into large companies/government entities, automatic certification when using pre-approved cloud solutions. I don't see how this will end well. I appreciate the reasoning behind it, but this is not a good solution. I'd prefer to see more "startup friendly" compliance frameworks that don't require tens to hundreds of thousands of doll…

I'd also prefer to see these standards go away. I haven't seen any proof they are providing meaningful security at any company I've been at and several of them have had massive hacks despite being SOC2 on paper. They also eat up InfoSec time instead of being productive on meaningful stuff like "Hey, are patching everything?" Most of these compliance just seem like barber licenses. A way for existing entities entrench…

SOC2 is akin to a protection racket.

Re: Why YC went to DC

#297

Post by re-thc »

csomar wrote: post #283
nurple wrote: post #159

Earlier quoted context omitted.

Couldn't agree more. In the SMEs that I've been involved with, this has had a huge chilling effect on both hiring and innovation. I think that the change is a primary contributing factor to the layoffs and offshoring that have seized the market ever since. I'm not convinced that this wasn't the intent of the change in the first place.

How does this boost offshoring when offshore employees are penalized the most?

The fix for that is to establish a subsidiary.

Re: Why YC went to DC

#299

Post by re-thc »

csomar wrote: post #284
guyfromfargo wrote: post #150

Earlier quoted context omitted.

Completely agree. I am a bootstrapped SaaS owner and we cleared about $1M in revenue, $1,200 in profit, and $90k in taxes. Bootstrapping a tech company in a post Section 174 world doesn’t even seem feasible. I can’t believe this issue isn’t being taken more seriously.

No one cares because most software developers are employed at big companies that can amortize. Even YC will probably just increase its seed instead of complain and consider it a "cost of business". This affects only marginal people. I am interested to talk with you about this if you want (feel free to reach, my email is in my profile).

> Even YC will probably just increase its seed instead of complain

Does it even impact these type of companies? 90% of the time at this stage you'll have very little income compared to expenses.

Re: Why YC went to DC

#300

Post by philipwhiuk »

mrb wrote: post #14

"This year, we’ll fund more than 500 companies out of 50,000 applications, and almost all of them are related to AI in some way." So, what this means: that in 2024, if you want to get VC capital, your startup must be related to AI.

They've always followed the buzzword. It was mobile, then cloud, then VR, then blockchain, now AI.
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