161–170 of 238 posts
Earlier quoted context omitted.
Is it sustainable, if it took millions to bootstrap? I mean I guess if it can just keep running, but the investors might not agree if they need to wait 15 years to make their money back.
What choice do they have? If they shot the enterprise down, they got nothing.
Is YC better than other incubators, percentage wise?
I would imagine so. a) Almost all of the other incubators are just awful. Either they are predatory, ineptly managed or simply not well capitalised enough to offer a competitive product. b) YC is able to rest on its laurels i.e. they can/do market how well AirBnb, Stripe etc have done. And so their funnel of talent is by far the best. c) That said, YC is the worst I've ever seen it. And Garry Tan is mostly to blame a…
Now do a podcast series interviewing founders on what went wrong
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They might have to prove to the IRS the share was actually worth that. Whereas if the business is bankrupt, it's obvious.
how many vc investors are in the class of people that get audited by the IRS?
https://www.nolo.com/legal-encyclopedia/irs-tax-audits-trigg...
Earlier quoted context omitted.
Is it sustainable, if it took millions to bootstrap? I mean I guess if it can just keep running, but the investors might not agree if they need to wait 15 years to make their money back.
What choice do they have? If they shot the enterprise down, they got nothing.
There are not just startups that become unicorns and startups that fold. Investors' worst nightmare is if you just make enough money to keep going, but you don't grow ("lifestyle business" as they use it is a derogatory term). That's because they prefer a sudden death where they can write down the investment and deduct their loss from taxes than an investment where they never see any money again. And then there are "…
"Investors' worst nightmare" seems very off. Most SAFE notes give you dividends that are on par with how corporations issue dividends. Assuming there is cash flow, you should be getting dividends. If the dividends are so low that you will never be reasonably paid back you can often negotiate to get out in some form. Very low cash flow only with no growth seems to be the only exception...which I'd guess would only exi…
That's not an exception. That's the norm. Most start-ups fail.
They literally burn down the investors' money and that's it.
Earlier quoted context omitted.
They might have to prove to the IRS the share was actually worth that. Whereas if the business is bankrupt, it's obvious.
No - that’s true if you are trying to determine if you can write it off, but if you actually sell it back for $1, you can take the loss.
I personally know the founders of three YC startups that are functionally dead (raised capital, not developing anything, basically laid off everyone but the founder(s)) but are not on this list. I'd bet it's at least twice that number.