Not compelling.
1) Go for the experience. If you get accepted, take the $100k+ and invaluable mentoring.
2) There is no requirement to play the VC's game. Take the money and play your own game.
Why I turned down my Y Combinator interview
81–90 of 109 posts
Re: Why I turned down my Y Combinator interview
#82Not compelling. 1) Go for the experience. If you get accepted, take the $100k+ and invaluable mentoring. 2) There is no requirement to play the VC's game. Take the money and play your own game.
It is my understanding that YC only funds companies that have a shot at being unicorns (I am happy to be corrected here). If you are aware of this fact, and a "lifestyle" business is your goal -- is it not dishonest to accept YC money?
Re: Why I turned down my Y Combinator interview
#83I think the case for taking VC money is because some startups have hard and expensive products that require huge upfront capital to realize. This could mean hiring a team of engineers with significant expertise in the area as well as purchasing hardware that aren't entirely off-the-shelf. If you want to build flying motorcycles [1] or rockets, chances are you need some financial aid unless you're Elon Musk.
Aside from that, bootstrapping and not raising money could work for you.
[1] - https://techcrunch.com/2019/03/07/ycs-latest-moonshot-bet-is...
Re: Why I turned down my Y Combinator interview
#84Not compelling. 1) Go for the experience. If you get accepted, take the $100k+ and invaluable mentoring. 2) There is no requirement to play the VC's game. Take the money and play your own game.
It is my understanding that YC only funds companies that have a shot at being unicorns (I am happy to be corrected here). If you are aware of this fact, and a "lifestyle" business is your goal -- is it not dishonest to accept YC money?
>Take the money and play your own game.
Any example here?
Re: Why I turned down my Y Combinator interview
#85I think the biggest difference between today and 20 years ago when I first go into Silicon Valley is that most founders are generally already planning their exit. There are a lot of startups whose mentality is "get big quick enough so that we can get bought out by Google/Facebook/Amazon/etc". And unfortunately this is a legitimate play because it leads to quick payouts so it motivates founders and VCs alike. It's a f…
No VC of any meaningful size is interested in a $50m exit.
Let's say as a VC you invested $3m and are holding 20% of the company at exit, that means you'll make $10m. A 3x return is nice but not going to be fund-maker.
If you're a $50m fund then you're expected to return >$150m, 10m will nudge you along to that target, but isn't going to be significant. Because a majority of your investments will go to zero or be small returners (1x-3x), it essentially means the good exits have to be >10x in order to be able to achieve reasonable returns for the fund.
Re: Why I turned down my Y Combinator interview
#86>Venture backed companies only have about a 1% chance of reaching a $1B valuation. [...] I’m sorry, but you aren’t the 1. You are the 99 and your startup isn’t going to become a unicorn. [...] Why play a game that has such terrible odds of winning? Because people have always liked to pursue things that interest them regardless of the odds . (cue Han Solo's "Don't tell me the odds!" ) Why do aspiring writers work on n…
Why won't banks provide loans?
Re: Why I turned down my Y Combinator interview
#87"There are other things that are important to me that I didn’t want to give up, like
* I have total control over my company
* I can’t be fired"
I know what this author is getting at, but as an employee, I like that my boss could be fired if they, e.g., were sexually harassing employees.
Re: Why I turned down my Y Combinator interview
#88Earlier quoted context omitted.
VCs purchase a different class of stock than you have as a founder, called preferred shares. It is standard to require a majority of the preferred shares to authorize a sale of the company. See this article for a standard, clean series A term sheet. https://blog.ycombinator.com/a-standard-and-clean-series-a-t...
Approval of the Preferred Majority required to ... including a Company Sale. However, that is a Series A term sheet. When you turned down YC, wasn't that at the seed stage? You would have still retained control until you converted later. But are you saying that even only accepting a SAFE puts you on an inevitable path?
If you raise seed funding, the expectation is that you will continue to raise money to fuel your growth. Even if your SAFE or convertible note doesn't have those terms in it, your first priced round will and all previous investors will inherit those rights through their preferred stock.
Re: Why I turned down my Y Combinator interview
#89Earlier quoted context omitted.
It is my understanding that YC only funds companies that have a shot at being unicorns (I am happy to be corrected here). If you are aware of this fact, and a "lifestyle" business is your goal -- is it not dishonest to accept YC money?
>Take the money and play your own game. Any example here?
Minority investors have zero control over you. People think they have to play the VC's game and they simply do not.
Re: Why I turned down my Y Combinator interview
#90Not compelling. 1) Go for the experience. If you get accepted, take the $100k+ and invaluable mentoring. 2) There is no requirement to play the VC's game. Take the money and play your own game.
It is my understanding that YC only funds companies that have a shot at being unicorns (I am happy to be corrected here). If you are aware of this fact, and a "lifestyle" business is your goal -- is it not dishonest to accept YC money?
If you look at the companies it funds that is obviously not even remotely the case. You don't have to lie. And even the most lifestyle business still wants to increase sales. I'm not sure the OP would even agree with the label lifestyle business.