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The New Deal

blog.ycombinator.com

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61–70 of 194 posts

Re: The New Deal

#61

Post by mcherm »

cpeterso wrote: post #55
sanj wrote: post #2

Getting accepted into YC immediately values your company at $1.7M.

Alternately, if your company is worth less than $1.7M then YC won't invest?

As they made clear, YC is not necessarily out just to make a profit. (The investment in non-profits, for instance, is clearly not profit driven.) Sure, they'll make a profit, but that won't be the only driver.

Besides, at this stage, no company actually has a value. Companies have a probability distribution of possible values... and it's a very diffuse distribution.

Re: The New Deal

#62

Post by btrautsc »

cperciva wrote: post #4

I 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…

Echoed from other places - but doing YC shouldn't be about the money or percentage ownership.

Yes, one day you'll look at the cap table and say, "man it would be great to have that x% to give to employees" - but very likely you're company will be in a dramatically different place progress-wise and valuation-wise, so it's a major net-gain.

Companies come into YC with nothing but wireframes and companies come in with six digit revenues. Both will exit dramatically further along, hyper-focused, and with higher valuations (in my experience). Companies that are unicorns or growing like crazy or have crazy utility get even higher valuations, and it all works out pretty well.

IMO standard deal makes things incredible simple and easy on the front end, without the massive majority of potential pitfalls (signaling, jealousy, negotiating time, etc)

Re: The New Deal

#63

Post by jcchee88 »

What does it mean for a startup to be non-profit? When YC and Teespring each invest 50k into a non-profit, do they expect a return on investment? or is it purely a donation?

Re: The New Deal

#66

Post by wiwillia »

Just wanted to say that we're excited to be a part of the non-profit side of YCombinator.

It's been humbling to have Watsi working with us in our office and watching the amazing things they achieve on a daily basis. I have no doubt that amazing non-profits will continue to emerge from YC.

Re: The New Deal

#68

Post by diziet »

ebabchick wrote: post #43

How can Teespring afford / justify giving every non-profit $50k?

They are a company with real revenue that's growing and they think the publicity will sort of make up for it, so they don't end up losing too much on it.

If yc does 5 nonprofits per batch, $500k is not a lot of money.

Re: The New Deal

#70

Post by kapilkale »

karamazov wrote: post #41
Beliavsky wrote: post #11

I have wondered if affluent parents can replicate at least the money part of Y Combinator. $120K is about the list price of two years of Harvard/MIT/Stanford . With a son who loves to program, I have wondered if sending him to a cheaper school and giving him the difference in installments after he graduates is better than paying for a "name" school. It depends on the quality of the cheaper school, of course. And I th…

Off topic, but if your son has the chance to go Harvard/MIT/Stanford, he absolutely should. The difference is primarily in the caliber of the other students, and it makes a world of difference to have such a concentration of talent in one place. (Note that I'm not saying there isn't talent elsewhere, just that there's an incredible concentration of it in the top n schools.)

It doesn't necessarily make world of difference. When you compare students who attended top private schools vs. those who were admitted but attended state schools, they actually have equivalent incomes down the line.

What's likely happening is that really smart kids at good state schools end up finding the pockets of talent there anyway.

Pretty scary implications for the value of a Harvard degree.

source: http://www.newyorker.com/archive/2005/10/10/051010crat_atlar...

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