191–200 of 238 posts
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What kind of restaurant takes tens of millions to start? Most estimates I'm aware of are less than 1 or 2 million at the very most.
I imagine some of the themed restaurants in Disney cost at least that much.
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Worst based on what, exactly?
If you look at the batch data [1] it is very clear that there is either an investment thesis or some inherent bias in how they choose startups. Since Garry Tan took over it is now heavily favoured towards (a) SF based, (b) young, (c) AI centric. And if you look at the partner YouTube videos you see why. There is a concerning lack of diversity in how they see the world i.e. they are all very much the e/acc types. [1]…
If I was betting on technology right now, I would bet on SF-in person teams with young founders and a focus on AI. Sounds like the perfect target.
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Sure it is. If your business nets 3 million a year, it takes 5 people to run it, and your customer base is steady, that's lifestyle. Sucks for investors, pretty nice for you if you can keep it running.
Any startup investment that doesn't return, I don't know, like 5-10x "sucks" in the sense that it's not making the portfolio successful, but that's most investments in the portfolio. Beyond that: what sucks about this outcome? If your business has just 5 employees, chances are your investor doesn't have a board seat; it's not costing them much, they can just hang around on the off chance that you turn the knobs right…
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They pay themselves 200k/y in a pre-market fit startup? That's insane and I guess on the investors for going over the traditional preseed amounts. Or do you mean that they're zombie startups that make enough to pay the founder 200k/year?
Yep. The former. Maybe they make $50k in revenue, have a few products still officially available, and raised a couple million dollars.
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Not an expert myself, but I don’t believe $200k/year counts as a “FAANG salary” for anyone with founder-level responsibility.
I'd argue there there aren't any single positions at large tech companies with founder level responsibility by design. It's a pretty decent compensation though. The base salary of a mid-level position at Amazon with substantially better equity terms (no cliff, no one deciding your bonus will be cut without your input, etc). It's a far cry from the PG ideal of salaryless founders surviving on instant ramen in their ga…
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Most YC companies are zombies. There are a lot of 3-5 person startups still "active", some of them since a decade ago.
What’s going on there? Are they profitable but just not scaling, or taking no salary?
https://archive.is/HNJoo "From Unicorns to Zombies: Tech Startups Run Out of Time and Money"
Discussed at HN: https://news.ycombinator.com/item?id=38554608
(I also wondered what it was)
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Most YC companies are zombies. There are a lot of 3-5 person startups still "active", some of them since a decade ago.
What’s going on there? Are they profitable but just not scaling, or taking no salary?
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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…
YC has probably become worse then most of the other (really bad) incubators Started with Sam now with Garry Tan it is really going in the gutter.
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If you look at the batch data [1] it is very clear that there is either an investment thesis or some inherent bias in how they choose startups. Since Garry Tan took over it is now heavily favoured towards (a) SF based, (b) young, (c) AI centric. And if you look at the partner YouTube videos you see why. There is a concerning lack of diversity in how they see the world i.e. they are all very much the e/acc types. [1]…
How is that worse, as a VC firm? If I was betting on technology right now, I would bet on SF-in person teams with young founders and a focus on AI. Sounds like the perfect target.
I have an issue with the way they continue to market themselves as being altruistic and a defender of startup founders everywhere rather than your run of the mill predatory, self-interested SF VC.
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They pay themselves 200k/y in a pre-market fit startup? That's insane and I guess on the investors for going over the traditional preseed amounts. Or do you mean that they're zombie startups that make enough to pay the founder 200k/year?
I think a lot of gen z founders see nothing wrong with paying themselves a FAANG salary. My generation, not so much (I’m 45).
The LP has 20 startups they can afford it, we on the other hand have lot more skin in the game than they, and not being able to afford say proper health-care or having to commute 2+ hours everyday affects the success of the startup lot more than extra 50-100k extra is going to cost the fund in a meaningful way.
At a more fundamental level, it an agency problem found in any management compensation theory. Investors/Shareholders need to keep the management motivated and vested in the success of the organization, if that means 200k salaries today it doesn't really matter.