121–130 of 171 posts
$80k is peanuts. Apparently these folks haven't learned the lesson that you get what you get what you pay for! Maybe $80k is enough for some ridiuclous $2 iPhone game or some startup for making a website for adding a single puny feature to an existing social network and having 15 minutes of fame. But $80k is nowhere near enough money to create an Enterprise solutions startup. I laugh at your $80k and the hubdreds of…
Earlier quoted context omitted.
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.
I guess investors of the type investing in start fund tend to think of it more as a gamble that only converts to anything if the company raises and don't care much about recovering relatively small bits and pieces in the even the company fails.
$80k is peanuts. Apparently these folks haven't learned the lesson that you get what you get what you pay for! Maybe $80k is enough for some ridiuclous $2 iPhone game or some startup for making a website for adding a single puny feature to an existing social network and having 15 minutes of fame. But $80k is nowhere near enough money to create an Enterprise solutions startup. I laugh at your $80k and the hubdreds of…
Apple was selling hobbiest boards, Microsoft the license to DOS.
You don't have to build a whole company, just find a market and become sustainable.
Off topic: did Yuri Milner lose money on his Zynga and Groupon investments?
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.
Basically, if you take 60 startups, give each $80k and put the $4.2 million (60 * $70k) in the bank. When that batch of YC startups gets to $20k left in the bank on average, figure out which ones show promise and which ones should be deadpooled. Assuming a 2/3 deadpool rate, that leaves 20 startups to divide the $4.2k among, or approximately $210k in convertible debt per startup to reach the next milestone.
This is more inline with your essay about the future of funding, in which you speculate that funding will become more continuous.
$80k is peanuts. Apparently these folks haven't learned the lesson that you get what you get what you pay for! Maybe $80k is enough for some ridiuclous $2 iPhone game or some startup for making a website for adding a single puny feature to an existing social network and having 15 minutes of fame. But $80k is nowhere near enough money to create an Enterprise solutions startup. I laugh at your $80k and the hubdreds of…
Earlier quoted context omitted.
I'm certain there are some companies that need more runway than others. Is it possible for, say, hardware companies to renegotiate for, e.g. 30k per VC rather than the current 20k?
I'd never thought of that. Maybe in version 2.
Earlier quoted context omitted.
We certainly didn't kick SV Angel out. They're among our favorite investors in fact. It just didn't make sense with their fund size to keep doing these investments. Unlike the other investors, they are what's now called a "super angel" fund, and those are much smaller.
I'm certain there are some companies that need more runway than others. Is it possible for, say, hardware companies to renegotiate for, e.g. 30k per VC rather than the current 20k?
We could order components just to try them out, without worrying that we were spending money on what may potentially turn out to be an unusable or unnecessary part. We could answer a lot of questions about what was possible using test setups rather than assumptions based on scraps of information collected from various sources.
80k probably would not have provided both R&D funds and some runway.
EDIT: I mean 'runway' in the sense of money for salaries, excluding R&D and other costs which could possibly be seen as ongoing costs of operation too.
Earlier quoted context omitted.
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.
Thought I'd doubt it would be litigated, unless the founders are particularly stupid in addition to being immoral.