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The YC VC Program

ycombinator.com

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Re: The YC VC Program

#161

Post by rwallace »

ibdknox wrote: post #59
kami8845 wrote: post #46

Earlier quoted context omitted.

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 ca…

That may be true in many cases but as a counterexample, SpaceX needed rather more than 100k to reach minimum viable product.

Re: The YC VC Program

#162

Post by jfoster »

pg wrote: post #135
Eliezer wrote: post #119

Earlier quoted context omitted.

Forgive me, but if some other VC had said this, I would have thought, "The blowing-up startups aren't the primary revenue stream - this VC is solving the wrong problem, i.e., optimizing the hedonic profile of failing startups instead of optimizing the financial profile of successful startups." Obviously things are different for you because you aren't necessarily in YC primarily to maximize RoI... but nonetheless, am…

The explanation is that the two types of optimization are related, because the successful and exploding startups both consume our time and (perhaps more importantly) attention. If we can make founder disputes at the unsuccessful startups take up less of our attention, we have more left to use helping the successful startups. Plus we're human, and we don't want to spend all our time mediating disputes. It's very borin…

Are there any patterns to founder disputes?

Re: The YC VC Program

#163

Post by brusch »

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…

this could really bite you in the back.

I know of two people who did something like that and it went wrong. If you are not lucky you get the "wrong" immigration officer and then you won't get into the US anytime soon.

Re: The YC VC Program

#164

Post by flyinRyan »

timothya wrote: post #65
dreamdu5t wrote: post #62

$80k or $150k seem like pithy amounts of money to fund any sort of company. What am I missing? That's one good person's salary for a year. One.

At an established company, yes, that's a reasonable salary for a developer. But when you're starting a startup, you don't take a salary of that size. You live cheaply and take only the minimum that you need as you commit yourself to building your company. It's not a life for everyone, but it is the startup life.

Sounds like anyone with a family is pretty much excluded from what you call "startup life" then. $80k wouldn't get me alone through half a year without selling my house and moving somewhere really cheap in the US.

Re: The YC VC Program

#165

Post by flyinRyan »

w1ntermute wrote: post #78
philwelch wrote: post #38

Earlier quoted context omitted.

But then you'd have to live in Kansas City, not the Bay Area, where all the investors and talent are. There are many parts of the Bay Area less expensive than SF proper.

That's why I'm saying that YC should take the first step, since it has the power to make a startup community in KC a real thing. I also think that having the entire tech community concentrated in the Bay Area is a bad thing. It leads to mental inbreeding and a narrow perspective.

If YC was going to try and create a startup community outside of SV they would want to go somewhere else where actual hackers were. Certainly no where in the midwest. Maybe somewhere like Boston or NY... wait, didn't they try that?

Re: The YC VC Program

#166

Post by zio99 »

onesider wrote: post #150
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.

Its unfortunate there are so many 'sucking up to' responses to the original post. If PG is smart enough he wouldn't give a Damn to those response. If he is not, he is not worth 'sucking up to' There is nothing wrong in questioning this change. To me this is a clear indication of YC has passed its peak. If you are funding people who are going to fight over 80K after their dream company fails, there is something seriou…

Well then, to play devil's advocate, there's this -

How to interview a VC: http://startupframework.tumblr.com/post/27080999978/intervie...

Re: The YC VC Program

#167

Post by flyinRyan »

johnrgrace wrote: post #49

Good call, guaranteeing $150K plus the seed money for the given inputs was far in excess of what you could raise elsewhere for comparable inputs. Simply the seed money, social capital, and demo day was attractive enough for me to apply.

>Good call, guaranteeing $150K plus the seed money for the given inputs was far in excess of what you could raise elsewhere for comparable inputs.

Which would mean they would have their pick of ideas since everyone would try YC first.

Re: The YC VC Program

#168

Post by w1ntermute »

prostoalex wrote: post #153
w1ntermute wrote: post #85

Earlier quoted context omitted.

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 relocatio…

> you'd have to offer something significant to convince people to move there and pay their (and families') relocation.

That's why I'm saying that a push by YC combined with Google Fiber could be that initiative. Like I said, there is already interest in the startup community in KC because of Google Fiber. For example, someone started a "startup house" in the first fiberhood to get hooked up, and is now renting it out to startup founders. He's got a lot of reservations already.

As for moving their families, I don't think that's a big concern. There are a ton of young, single potential founders who would have no problem moving halfway across the country.

> Bay Area inbreeding partially works because (a) young companies don't have to spend as much on relocation

These costs can be much lower in the Midwest. Finding an apartment is not the multi-month ordeal it can be in SF, for example.

> (b) availability of public transportation makes living and working in different cities plausible.

There's no need for public transportation in KC. Gas is cheap, taxes are low, and parking space is plentiful. Just get a car. In fact, I'd prefer not to take public transportation if the train stations need to be cleaned by Hazmat crews[0], as they do in SF, with BART.

0: http://www.sfgate.com/bayarea/article/Human-waste-shuts-down...

Re: The YC VC Program

#169

Post by philwelch »

w1ntermute wrote: post #168
prostoalex wrote: post #153

Earlier quoted context omitted.

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 relocatio…

> you'd have to offer something significant to convince people to move there and pay their (and families') relocation. That's why I'm saying that a push by YC combined with Google Fiber could be that initiative. Like I said, there is already interest in the startup community in KC because of Google Fiber. For example, someone started a "startup house" in the first fiberhood to get hooked up, and is now renting it out…

Relocation costs to the Midwest would be lower per relocated employee, but the lowest relocation cost would be 0 because the employee already lives there. This is the benefit of the Bay Area.

Traditionally the tech industry has been centered on suburban Silicon Valley, not San Francisco proper. But more and more educated young people want to live in real cities with culture, diversity, mass transportation, and walkability, which is they they live in San Francisco. There are other places with some or all of those benefits--New York, Chicago, Seattle, Portland, London, Berlin, Vancouver, BC--but Kansas City has close to none of them.

In addition, the San Francisco Bay Area has the Sand Hill Road VC's, tons of angels, a large talent pool, two world-class CS departments at Berkeley and Stanford pumping more talent in every summer, and lots of other technology companies in town to collaborate with. It even has lots of suburbs if you really want that. Kansas City has Google Fiber. Not even Y Combinator would tip that balance.

Re: The YC VC Program

#170

Post by dmmalam »

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…

Visa waivers (ESTAs) are fine during YC, but after 6-9 months it becomes necessary to have legal status to do things like fund raise (many investors only do local), paying yourself, staying in the country for more than 6 months in a year etc. Obviously there is also the risk of the nightmare scenario that immigration dude has a bad day and doesn't allow you to enter the US. Whilst this is rare, I know of it happening.

Most international YC companies end up moving to the US, and they sort out visa issues after demo day as it takes too much time during YC.

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