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The YC VC Program

ycombinator.com

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Re: The YC VC Program

#51

Post by pg »

waterlesscloud wrote: post #43
jedberg wrote: post #3

This is great! I always thought the $150k was too much of a runway. It allowed the poor startups to limp along for too long. And besides, the real value from these investments isn't the money, it is the mindshare you get with the VCs. This will help make that mindshare greater.

I get why it's great for investors, but why is it great for founders? Especially when they could use the time to change plans.

The office hours help all the startups. Decreasing the amount invested helps the successful and borderline startups because it means less of our time is taken up mediating founder disputes in the ones that are exploding. And yes, that was a significant time suck; Jessica says the majority of her time last batch was spent dealing with founder breakups.

Re: The YC VC Program

#53

Post by rdl »

w1ntermute wrote: post #35
dmmalam wrote: post #9

80k may be a little tight for international founders, as flights and legal fees for visas can be very expensive. Also silly things like paying extra for deposits on rent/bills as you have no US credit history. But otherwise seems reasonable.

$80k would also be hard to do in SF for Americans. I think YC should do something around the Google Fiber initiative in KC - there's already a startup community congealing around the fiberhoods that have already gone live, and you can make it at least 1.5 to 2 years in KC on $80k, given the ridiculously low cost of living compared to SF.

Generally people are willing to accept a lower quality of life (in terms of spending) for short periods, like during a summer or winter of YC. Splitting a 2br apartment with a cofounder, even in SF or MV, isn't going to consume that much of 80k -- maybe $4k/mo, tops, including utilities, food, and the premium for month to month.

What screws people is when they have high fixed expenses -- like a founder who has a kid in college, a mortgage in another expensive city, non-working spouse, expensive medical insurance or medical costs, etc., or some combination of these. It's not hard to need $5-10k/mo to cover upper-middle-class fixed expenses, especially if you have to run it through payroll and thus ~50% total taxes, and then add living in the Bay Area for the summer on top of that.

That is why a lot of startup founders do it when they're young, not because being 22 is inherently better for doing a startup than 44.

Re: The YC VC Program

#54

Post by jayzalowitz »

pg wrote: post #51
waterlesscloud wrote: post #43

Earlier quoted context omitted.

I get why it's great for investors, but why is it great for founders? Especially when they could use the time to change plans.

The office hours help all the startups. Decreasing the amount invested helps the successful and borderline startups because it means less of our time is taken up mediating founder disputes in the ones that are exploding. And yes, that was a significant time suck; Jessica says the majority of her time last batch was spent dealing with founder breakups.

pg, can you express percentages of yc startups that went through this?

Re: The YC VC Program

#57

Post by ibdknox »

pg wrote: post #51
waterlesscloud wrote: post #43

Earlier quoted context omitted.

I get why it's great for investors, but why is it great for founders? Especially when they could use the time to change plans.

The office hours help all the startups. Decreasing the amount invested helps the successful and borderline startups because it means less of our time is taken up mediating founder disputes in the ones that are exploding. And yes, that was a significant time suck; Jessica says the majority of her time last batch was spent dealing with founder breakups.

> The office hours help all the startups.

I would say that they were definitely valuable to us, if for no other reason than to get a chance to talk with investors before there was anything really at stake. The way investor meetings go is something that's hard to explain and something you just have to experience. This gave our class the opportunity to get a little used to how investors think and the way they interact with potential investments. While that may seem to be somewhat intangible, it's hard for me to estimate how much that initial experience helped ease us into doing it "for real" later.

Re: The YC VC Program

#58

Post by pg »

jayzalowitz wrote: post #54
pg wrote: post #51

Earlier quoted context omitted.

The office hours help all the startups. Decreasing the amount invested helps the successful and borderline startups because it means less of our time is taken up mediating founder disputes in the ones that are exploding. And yes, that was a significant time suck; Jessica says the majority of her time last batch was spent dealing with founder breakups.

pg, can you express percentages of yc startups that went through this?

IIRC around a quarter of the startups lost a founder. Many of those partings were amicable though. Maybe a third required us to get involved.

Re: The YC VC Program

#59

Post by ibdknox »

kami8845 wrote: post #46
ibdknox wrote: post #41

Earlier quoted context omitted.

This doesn't preclude a company from seeking funding elsewhere and I can imagine very, very few companies at this stage that could legitimately burn through $80k in 3 months. If that doesn't get you close enough to at least prove something that could be used as a basis for raising more, it's probably time to take a step back and figure out if that's really the best strategy for moving forward.

Yes. But this takes time away from building things when you only have 3 months before demo day, and I'm sure there's always stigma attached to pursuing "outside-money" when everyone else is fine taking the 80k from the 4 investors YC trusts.

I agree. I meant that you could raise after demo day. As I said, it's pretty unlikely that you must have more than the 100k you'll get during that time, even for hardware. Plus constraint in this case is a good thing, virtually anything can be built given enough money, but in order for a company to exist you need to be able to build it at some reasonable cost. If your prototype is going to burn through all of that cash, it's time to get creative and find a way to do it for less.

Re: The YC VC Program

#60

Post by pclark »

dmmalam wrote: post #9

80k may be a little tight for international founders, as flights and legal fees for visas can be very expensive. Also silly things like paying extra for deposits on rent/bills as you have no US credit history. But otherwise seems reasonable.

$150K is not enough to secure H1B visas either.
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