The new version involves less money and more engagement. The VCs will invest $80k in each startup instead of $150k, and we'll organize sessions of office hours in which partners from the VC firms advise the startups in each batch. As before, the investments will be done as convertible notes with no valuation cap and no discount.
The YC VC Program
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Re: The YC VC Program
#9280k 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.
it is
Re: The YC VC Program
#93This will definitely reduce the number of startups with H1B holder founders, even if you transfer the visas, the runway will be comparatively short.
Re: The YC VC Program
#94Earlier quoted context omitted.
VC loses $70k
VC loses half the equity they would get otherwise..
The equity is insignificant, specially for the top startups. What those 20k buys the VC is first-hand knowledge of what is going on with the company and (hopefully) a better chance to invest additional money when/if the company takes off.
Re: The YC VC Program
#95It is worth reading PG's email from 5 months back about his vision of what the fund raising environment might look like.
http://www.businessinsider.com/facebook-fallout-y-combinator...
Re: The YC VC Program
#9680k 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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Re: The YC VC Program
#9780k 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.
YC gives a measly $600 for travelling expenses for the interviews, but suddenly $80k isn't enough?
$4k gets you anywhere in the world, and maybe half the western world is reachable with $1k or less. You're not going to spend a substantial portion of $80k on flights unless you go home and back every weekend.
Re: The YC VC Program
#98Think about it this way, nobody applies to YC for the money, so why part with it?
Re: The YC VC Program
#99This 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.
It'll be interesting to see how the mindshare arrangement plays out. VC's are used to writing huge checks and providing value after a company has solved product-market fit. This asks them to write a tiny check and provide very early expertise they generally don't provide.
The big VC firms are increasingly trying to do early stage angel investments to get their foot in the door, so to speak. They will likely have better advice at the early stage than they would have a few years ago because they have more experience with companies at that stage.
Also, Andreessen Horowitz added Chris Dixon (a very well known angel investor) as a general partner, so I think this speaks to their intentions of being able to help companies at an earlier stage.
Re: The YC VC Program
#100Earlier quoted context omitted.
It's a matter of degree. In the old days, when a startup fell apart, the founders would just go their separate ways. When every startup got $150k, sometimes they'd end up fighting over the carcass instead. Our hope is that now they'll fight half as hard.
Out of curiosity, what does the 'carcass' usually consist of? Wouldn't any leftover money go back to investors? Or does that get divided out to founders (seems like that would be a bad incentive). Or is it mostly related to the product (domains, code, etc..)?
you have to understand that YC & the start fund has little to no control over the companies, except perhaps moral authority.
YC has common shares (and a small minority at that) while the start fund is arguably even worse off with a convertible note.
so, if the founders decided to, they could just pay out the rest of the money as a bonus. immoral? yes. illegal? i don't think so.