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The YC VC Program

ycombinator.com

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Re: The YC VC Program

#151

Post by ibdknox »

trevelyan wrote: post #141
tomhoward wrote: post #87

Earlier quoted context omitted.

what is it exactly they're fighting over? Surely the money has run out and anything left should be returned to investors in good faith? I assume he's talking about cases where the founders fall out well before the money has run out. Previously, when there was little (money or IP) left, they'd just go their separate ways and start something new. But with money still in the bank, founders may believe the company still…

I wonder how many of those teams were single-founder projects that took on partners to apply. It is surely very rare for organic teams to experience this sort of drama in three months, no? Or is YC really just that stressful?

Doing a startup in general will test even the strongest relationships. I've seen old friends break apart.

So yeah, YC can really be that stressful.

Re: The YC VC Program

#152

Post by mgummelt »

asr wrote: post #130
drusenko wrote: post #100

Earlier quoted context omitted.

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.

Definitely illegal. http://en.wikipedia.org/wiki/Duty_of_loyalty Thought I'd doubt it would be litigated, unless the founders are particularly stupid in addition to being immoral.

I don't see how fiduciary responsibility holds if the company is in the process of dissolving.

Re: The YC VC Program

#153

Post by prostoalex »

w1ntermute wrote: post #85
philwelch wrote: post #83

Earlier quoted context omitted.

What's the benefit to YC?

As I said, concentrating the community in the Bay Area leads to mental inbreeding and a narrow perspective. Funding Midwestern startups might lead to successes that couldn't have been achieved in the Bay Area. Also, such startups could be funded with less money and will have a longer runway.

Why would it be less money? For software startups human capital gets to be the most expensive. Unless KC has a rather large community of brilliant senior engineers, who also happen to be unemployed, you'd have to offer something significant to convince people to move there and pay their (and families') relocation.

Bay Area inbreeding partially works because (a) young companies don't have to spend as much on relocation, (b) availability of public transportation makes living and working in different cities plausible.

Re: The YC VC Program

#154

Post by argumentum »

davidwhodge wrote: post #147
argumentum wrote: post #140

Earlier quoted context omitted.

In no way do I blame the money, but it certainly made it easier to make bad decisions. A better way to put it would be that it made us make decisions that shouldn't have had to be made that early. "no idea" doesn't literally mean we had "no idea", we had plenty of ideas. We just hadn't settled on one yet.

I'm curious. Would you mind sharing what kinds of early decisions you made that you wouldn't have with 80k?

Sure. Hiring 8 interns, leasing a 7k/month house for starters. Ok, it's probably more relevant that I was an idiot (been a student my whole life). My initial thoughts were the following:

1. Demo Day was a unique non-linearity. Being especially good by that date would make you overvalued (now I realize that's a dumb thing to aim for, rather you should aim to be of genuine high value).

2. Spending all 170k by Demo Day would be the optimal way to achieve this outcome. It's pretty hard to spend 170k in three months with no idea, in fact it's a job in and of itself to figure out how to spend that much.

I did manage to recoup all the losses by airbnb'ng out the house and finding other yc co's for the interns, but still it was a waste of at least one month and created an aura of bad feelings that doomed the company for good.

Re: The YC VC Program

#155

Post by smita622 »

ibdknox wrote: post #151
trevelyan wrote: post #141

Earlier quoted context omitted.

I wonder how many of those teams were single-founder projects that took on partners to apply. It is surely very rare for organic teams to experience this sort of drama in three months, no? Or is YC really just that stressful?

Doing a startup in general will test even the strongest relationships. I've seen old friends break apart. So yeah, YC can really be that stressful.

Point made - but do you really believe that halving the investment is going to change the level of drama involved? What is this - a shout out to Biggy's "mo money mo problems"?

Surely, we can respect the complexity of founder relationships, and yes, at times their tenuousness - and not trivialize them as matters that can be solved by making it easier for a VC to write-off the investment. It just feels like an aspirin for a different problem...

Re: The YC VC Program

#156

Post by ipince »

nikcub wrote: post #149
dmmalam wrote: post #118

Earlier quoted context omitted.

Visas cost 5-10k per founder. We had to pay an extra month of rent as 'deposit'. You will need to fly in and out of the US several times while the visas get process, as the ESTA is only 3 months. A round trip from LON-SF can be 1k per person, and that's from a hub. I've already got enough miles to be bumped up on my frequent flyer prog. It's not the end of the world, and the typical YC company will be resilient enoug…

Use visa waivers. They let you stay in the US for 3 months at a time and spending $1k on a ticket at the end of each 3 months is cheaper than paying $5-10k upfront for a visa plus additional flights. If you are worried about the number of times you can enter on a visa waiver, don't - I have entered the USA 50+ times on a waiver and the guys at immigration ask me how I am going and wave me on each time. This was even…

I didn't know what a visa waiver was. For others:

http://travel.state.gov/visa/temp/without/without_1990.html#...

Sadly, my country is not in the list, so I have to pay up.

Re: The YC VC Program

#157

Post by argumentum »

tatsuke95 wrote: post #116
argumentum wrote: post #86

THANK YOU! This makes 250% sense, particularly for "no idea" companies. 150k led to several bad decisions at the beginning, and led to our breakup later on. 80k will be a lot more valuable than 150k, and make startups think more carefully about how to spend money. Perhaps for capital intensive startups that ought to be funded, there can be a separate arrangement. This shows why YC is YC.. it constantly innovates and…

> "This makes 250% sense, particularly for "no idea" companies." I can't decipher the level of exaggeration. If your company has "no idea", maybe that's where the blame should lie, rather than on having too much money.

"250%" was of course hyperbole

Re: The YC VC Program

#158

Post by nikcub »

ipince wrote: post #156
nikcub wrote: post #149

Earlier quoted context omitted.

Use visa waivers. They let you stay in the US for 3 months at a time and spending $1k on a ticket at the end of each 3 months is cheaper than paying $5-10k upfront for a visa plus additional flights. If you are worried about the number of times you can enter on a visa waiver, don't - I have entered the USA 50+ times on a waiver and the guys at immigration ask me how I am going and wave me on each time. This was even…

I didn't know what a visa waiver was. For others: http://travel.state.gov/visa/temp/without/without_1990.html#... Sadly, my country is not in the list, so I have to pay up.

Sorry, I should have mentioned that.

The list of countries that you can get a waiver from is a lot longer now than it was when I started doing it. The USA realized that they depends on business tourism/migration, so they have been steadily expanding that list of countries and the scope of the waiver program.

So make sure you check back regularly.

Re: The YC VC Program

#159

Post by shin_lao »

pg wrote: post #30
debacle wrote: post #13

What kind of messy things happen with 150k that don't happen with 80k?

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.

There is also the trap that if you have a little too much at the beginning you might fall into the trap of overbuilding thinking that you have "the time" instead of being obsessive about actually making money.

Re: The YC VC Program

#160

Post by chris123 »

cs702 wrote: post #76

YC is perhaps the most innovative angel/accelerator/VC firm in the planet. Despite all the success the firm has had, it is still acting like a startup -- constantly questioning, experimenting, tinkering, and gradually optimizing via careful trial-and-error, based on the real-world results achieved with each batch of companies. Clearly, it's run by hackers.

It just means the are not insane, at least as defined by Albert Einstein: "Doing the same thing over and over again and expecting different results."
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