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So A Blogger Walks Into A Bar…

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Re: So A Blogger Walks Into A Bar…

#241

Post by redrobot5050 »

MediaSquirrel wrote: post #167
mhendrick wrote: post #164

Earlier quoted context omitted.

Correct me if I'm wrong, but isn't it likely that the angels involved also make up a strong percentage of the people who invest on Demo Day in post-YC companies? How can it be a "PG vs Angels" situation when the parties involved are likely some of YC's portfolio companies biggest "supporters"?

YC is the seller, angels at Demo Day are the buyers. Just cuz you work with someone closely doesn't mean you won't or can't try to screw them.

Yeah. I mean, look at the JooJoo/CrunchPad Debacle. According the Mike A., that's exactly what happened.

Re: So A Blogger Walks Into A Bar…

#242

Post by notahacker »

tptacek wrote: post #45
jnoller wrote: post #36

Earlier quoted context omitted.

They are a group of people supposedly conspiring to generate the worst possible terms for the people they are providing money to, while trying to force out or marginalize competition. IANAL though - even if not illegal, it's still pretty stinky, and a big part of me hopes it's not illegal. If it's not illegal, I hope they're outed and shamed if this is true. If it is illegal, it give the government reason to step in…

Or, this is a group of people collaborating to generate the best possible outcome for their own business. Every joint venture can be framed in anticompetitive terms. But in this case, what possible undue market influence can they have? The market will find other people to take these deals.

If (i)most angel investors are significantly less likely to make investments in early stage tech startups at a given price and/or (ii)due to connections these investors provide a significant non-monetary value-add to the startups they invest in then it's conceivable they might wield a significant amount of market power.

Re: So A Blogger Walks Into A Bar…

#243

Post by gruseom »

wensing wrote: post #146
jeromec wrote: post #132

Earlier quoted context omitted.

The interesting thing is unlike that group of Angels apparently in the bar PG's interests are less about helping himself, and more about helping entrepreneurs. From an essay by PG entitled "Why YC": The real reason we started Y Combinator is one probably only a hacker would understand. We did it because it seems such a great hack. There are thousands of smart people who could start companies and don't, and with a rel…

YC's greatest hack is identifying founder material based on technical rather than social proof (the YC app asks for an example of the coolest thing you've ever built, not an example of a cool person that thinks you are cool). This hack is possible thanks to a judges panel full of real nerds. How many super angels or VC's can claim to have the same?

I agree that YC are able to identify great hackers and great founders more easily because they are these things themselves. What's little recognized is how big a difference this is between YC and the other YC-like funds.

Re: So A Blogger Walks Into A Bar…

#244

Post by mbyrne »

grellas wrote: post #130

I am late in joining this thread and will add only a few observations to supplement the many good comments already here: 1. Competitor collusion and express agreements to restrict the freedom of each to compete (i.e., horizontal contractual dealings) do indeed expose the colluding parties to potentially serious liabilities under the Sherman and FTC Acts. If that is what is going on here, then Mr. Arrington has fired…

Comment value multiplier for LEGAL issues on HN:

Hacker with an opinion about what the law should be: 0

Law student: 0

Harvard Law student: 0

Experienced practicing lawyer, but not in that specialty or venue: 0

Experienced practicing lawyer in that specialty in that State or Federal venue: 1 to -1 (depending on what benefits his client base)

I am the State or Federal Prosecutor who decides which cases to pursue or not: 1000

then multiply by

I am not fully informed of all the Facts: 0

So far this includes everyone, including me.

Re: So A Blogger Walks Into A Bar…

#245

Post by tlb »

budu3 wrote: post #185

Why do Angels hate convertible notes so much?

Convertible notes allow founders to close angel deals one at a time with varying valuations. It makes it much easier for small angels to compete with big angels. The old practice of stock issuance required a big angel to make the whole deal happen, and they could dictate terms. Now, big angels are losing their advantage over small angels.

I understand why they're unhappy, but I encourage them to compete fairly on their merits rather than anything anti-competitive.

Re: So A Blogger Walks Into A Bar…

#246

Post by wensing »

gruseom wrote: post #243
wensing wrote: post #146

Earlier quoted context omitted.

YC's greatest hack is identifying founder material based on technical rather than social proof (the YC app asks for an example of the coolest thing you've ever built, not an example of a cool person that thinks you are cool). This hack is possible thanks to a judges panel full of real nerds. How many super angels or VC's can claim to have the same?

I agree that YC are able to identify great hackers and great founders more easily because they are these things themselves. What's little recognized is how big a difference this is between YC and the other YC-like funds.

Yes. I had a colleague apply for TechStars and her takeaway from the interview was "he was really focused on where the business was." Doesn't seem in line with what I've heard about YC's primary interest (it's not the business model).

Re: So A Blogger Walks Into A Bar…

#247

Post by SkyMarshal »

grellas wrote: post #239
SkyMarshal wrote: post #202

Earlier quoted context omitted.

Grellas, what's your take on this Quora comment? In a nutshell, it's not illegal for collusion on the buy side, only the sell side: Tarun Nimmagadda, Mutual Mobile Co-Founder, COO http://www.quora.com/Who-are-the-Super-Angels-that-Michael-A... "The article was a fun read, but it is a false claim that this is illegal. Collusion, price fixing, and dividing markets is only illegal on the selling side. Think about how pe…

That comment was made out of ignorance. Antitrust laws are by no means limited to sellers only.

Interesting, thanks.

Re: So A Blogger Walks Into A Bar…

#248

Post by gruseom »

wensing wrote: post #246
gruseom wrote: post #243

Earlier quoted context omitted.

I agree that YC are able to identify great hackers and great founders more easily because they are these things themselves. What's little recognized is how big a difference this is between YC and the other YC-like funds.

Yes. I had a colleague apply for TechStars and her takeaway from the interview was "he was really focused on where the business was." Doesn't seem in line with what I've heard about YC's primary interest (it's not the business model).

It seems kind of obvious that most successful startups don't succeed via the business model they started with. And that great founders can change business models more easily than great business models can change founders. These things are so obvious that they're cliches, in fact, but that doesn't mean that they're common practice.

Re: So A Blogger Walks Into A Bar…

#249

Post by brendonjason »

limist wrote: post #230
brendonjason wrote: post #195

Earlier quoted context omitted.

Yes. They are running scared of the growing threat of the Ylluminati. But since they have 100% of all the deals, they also seem to co-invest(?!?). These anxious (yet all-powerful) group of angels and this unstoppable new seed-stage prominence. They form a closed loop. A loop closed off to venture capitalists and angels not at that meeting ... which is basically everybody. Except Michael. He got away with his life int…

I upvoted you just for the historical reference. :)

Thank you! Your rare sense of humor more than counterbalances the dime-a-dozen downvotes that have yet again stripped me of run at a 100 karma points on this, my ... 8th(?) YC account!

Re: So A Blogger Walks Into A Bar…

#250

Post by polynomial »

brendonjason wrote: post #179
dandelany wrote: post #173

Earlier quoted context omitted.

Interesting questions... IANAL, but I imagine they're colluding to bring down the valuations of startups, therefore essentially fixing the "price" of their money, to be paid for in startup equity. If I, and others, say your company is worth a million dollars, then I'm fixing the price of my $500,000 at 50% of your company.

IANAL(E), but this scenario would seem to be more of a concern if startups in Silicon valley got together over dinner to deny deals that didn't offer similar terms and prices in dollars for securities of all startups represented at said dinner simultaneously. As for angels fixing the "price of their money" I don't understand how antitrust applies to this anymore than it would to, say, how LIBOR is determined. If anti…

> if I start a boycott of something (colluding to pay $0)

http://j.mp/dividedby0

(Unless of course you actually get them to give it to you for nothing, which is generally not the point of a boycott…)

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