The New Deal
blog.ycombinator.com
The New Deal
1–10 of 194 posts
Re: The New Deal
#2Getting accepted into YC immediately values your company at $1.7M.
Re: The New Deal
#3Great news, on face value this appears to streamline process of getting funded for startups accepted to YC. On the other hand, there does not appear to be anything but face value going on, which is always a plus.
Re: The New Deal
#4I can't help thinking that this seems a little bit unfair. While there's a nominal out for "exceptional cases", it seems to me that a company like Stripe deserves a much higher valuation than a company like Tarsnap... not to mention the difference between companies which are joining YC after they're already established and companies which are merely a twinkle in their founders' eyes.
What exactly is the problem being solved by having a standard deal which almost everybody gets?
Re: The New Deal
#5I'm more excited about the effect this will have in general than the effect it will have on YC companies.
The difference for a YC company is that they don't have to give up an extra percentage as they raise their seed round to cover the convertible note/SAFE that they got from YCVC. With no discount, if a YC company raised at a $10M valuation that 80,000 would be worth .8% of the company - not enough to really move the needle.
The difference for the industry as a whole is that most accelerators are trying to mimic YC to a certain extent, and as YC now gives $120K straight-up others might follow suit. It's really easy to say, "We give you 20K for 6-7% because that's YC does." That seems to be almost industry standard, despite the fact that $20K for 3-5 months can be really hard to live on. It will be interesting to see how other accelerators react.
Re: The New Deal
#6sama: While you have our attention, you might as well explain the details about the $120k/7% happening in two chunks.
[Edit 1:] Thanks; OK. I had read it as potentially indicating the money came at two different times rather than just from two different sources. All clear now.
Re: The New Deal
#7Props for cleaning things up. Startups have enough difficulties to overcome, without having to spend time and brain cycles navigating a complex funding structure.
Re: The New Deal
#8I can't help thinking that this seems a little bit unfair. While there's a nominal out for "exceptional cases", it seems to me that a company like Stripe deserves a much higher valuation than a company like Tarsnap... not to mention the difference between companies which are joining YC after they're already established and companies which are merely a twinkle in their founders' eyes. What exactly is the problem being…
If they valued different companies differently, then it sends a certain kind of signal. The ones with the better valuation would end up getting a disproportionate amount of follow-on funding.
Now, that may be a good thing, but it also might be a bad thing. At a certain point, this is a numbers game, and you want the market to sort things out, not YC management.
Re: The New Deal
#9I can't help thinking that this seems a little bit unfair. While there's a nominal out for "exceptional cases", it seems to me that a company like Stripe deserves a much higher valuation than a company like Tarsnap... not to mention the difference between companies which are joining YC after they're already established and companies which are merely a twinkle in their founders' eyes. What exactly is the problem being…
If you're trying to fund 30+ companies per batch, having valuation negotiations with each of them is probably a dealbreaker in terms of overhead.
Re: The New Deal
#10[deleted]