This is true for ALL exploding offers. Not just accelerators or investment term sheets, but for employment as well.
Exploding Offers Suck
21–30 of 178 posts
Re: Exploding Offers Suck
#22Re: Exploding Offers Suck
#23Cool change of policy. Brian Chesky says in this video that Y Combinator gave AirBNB an exploding offer back in 2009:
Re: Exploding Offers Suck
#24A dear friend and excellent negotiator told me that when he gets any kind of short-term exploding offer, the first thing he does is verbally reject the deadline. And the second thing he does is ignore the deadline and offer feedback only after it has passed. I've seen him employ this many times in practice and it has always worked out. I don't want to be responsible for anyone losing a deal, but remember: when someon…
> when someone offers you an exploding offer, it's because they really, really want you to take it.
Couldn't it be because they've got a lot on their plate and after a certain period of time they want to free up their brain cycles and stop wondering if you're going to accept that deal?
Couldn't it be that you're barely preferred and making the deadline shows them that you're excited about the offer? Missing the deadline shows that you're not excited and they'll know to go with the second best candidate?
FWIW, I'm relating this to exploding job offers as I have no direct VC experience.
Re: Exploding Offers Suck
#25> It may be the best thing for accelerators to use time pressure to get founders to accept their offer, but it’s definitely not the best thing for founders.
isn't that 'not the best thing for accelerators' in the long run as well? if you're using a strategy which is clearly not win-win, you're going to lose _good_ deals to people who aren't doing that - so you'll get stuck with a portfolio of companies run by founders not smart enough to see this for what it is. enjoy, sucker!
Re: Exploding Offers Suck
#26Is this a change for YC? YC previously required getting an answer the day you're accepted because "you have all the information". So this is an update to allow people time to decide, right? I always found the justification of having all the information a bit self centered. Founders have all the information... about YC, but not about other options. That said, as a YC alum, I think you should almost certainly say yes i…
only in the early years of YC did we require an answer right away. as much time as the founders want has been the unofficial policy for awhile, but i thought it was time to share it.
> only in the early years of YC did we require an answer right away.
I think the post would be stronger if it acknowledged this fact.
Re: Exploding Offers Suck
#27A dear friend and excellent negotiator told me that when he gets any kind of short-term exploding offer, the first thing he does is verbally reject the deadline. And the second thing he does is ignore the deadline and offer feedback only after it has passed. I've seen him employ this many times in practice and it has always worked out. I don't want to be responsible for anyone losing a deal, but remember: when someon…
> when someone offers you an exploding offer, it's because they really, really want you to take it. Couldn't it be because they've got a lot on their plate and after a certain period of time they want to free up their brain cycles and stop wondering if you're going to accept that deal? Couldn't it be that you're barely preferred and making the deadline shows them that you're excited about the offer? Missing the deadl…
If they don't really want you, they'll tend to give vague and noncommittal timeframes so they can check out other options.
A job offer might be time limited if there's a planned start date though.
Re: Exploding Offers Suck
#28A dear friend and excellent negotiator told me that when he gets any kind of short-term exploding offer, the first thing he does is verbally reject the deadline. And the second thing he does is ignore the deadline and offer feedback only after it has passed. I've seen him employ this many times in practice and it has always worked out. I don't want to be responsible for anyone losing a deal, but remember: when someon…
> when someone offers you an exploding offer, it's because they really, really want you to take it. Couldn't it be because they've got a lot on their plate and after a certain period of time they want to free up their brain cycles and stop wondering if you're going to accept that deal? Couldn't it be that you're barely preferred and making the deadline shows them that you're excited about the offer? Missing the deadl…
It seems unlikely that someone would instantly flip from wanting to do a deal to refusing to do a deal just because it drags on a little longer than they wanted.
But anything's possible. If you're happy with the offer and don't want to risk losing it, take it!
Re: Exploding Offers Suck
#29This seems like a step forward. Exploding offers are generally unpleasant, usually a power play from the side that has less to lose. It's also common practice for companies to extend exploding offers to new hires. Replace "accelerators" with "companies" and "founders" with "hires" and you get a very similar argument for not forcing people to take a job until they've completed their own decisionmaking process (this ul…
I've used it for new hires. Helps get quick closure on those whose decision is right on the edge. Also you get to know how strong an interest they have. But if they ask for more time, I usually give it. They just have to be confident enough to ask.
Re: Exploding Offers Suck
#30It is pretty clear to see whats going on: It is without question that most people applying to incubators apply to a few of them, in case they don't get into the (obviously) best one, YC. Its my guess that some of the less exciting incubators give these exploding term sheets to make the founder think: "Damn, I got into Incubator X but I have to say yes in 48 hours. I wonder if I will get accepted into YC also when ans…
> These guys dont just want YC's cast-offs, after all. That is thoughtfully provocative. I have literally zero evidence to go from, but I suspect that Y Combinator is like Harvard or Yale: they could get rid of the group that they actually admit and go for the next tier, then achieve similar outcomes. (In other words: there are so many strong applicants that they can't take them all.) This is just to say that even ta…
Im sure a ton of the companies who apply to YC and dont get in are still Grade A. But you have to trust YC knows what they are doing, and the A+++ companies will be picked over before they hit second or third tier.
You have to remember that investing in companies is a lottery game. Most angels/vc's profits are made on that 1 in a million company with a 1000x return.
If YC wants access to truly the best companies, they need to institute a rolling admissions. Otherwise, these scrappy second tier incubators will get lucky a few times when a nervous founder takes a bird in the hand over two in the bush. The policy only hurts YC itself.