A New Standard Deal • Hacker News Board

Re: A New Standard Deal

#91

Post by IncRnd » Sat, Jun 27, 2020, 3:23 PM UTC

maest wrote: post #86

mauriziocalo wrote: post #68

Earlier quoted context omitted.

> The default YC valuation of $125k/0.07 = ~$1.8M is way too low for us This is the wrong way to look at it. Instead, ask yourself: would you exchange 7% of your company to join the YC community and be able to leverage their resources forever? The answer should be a resounding yes if you think your company will be > 7.5% more valuable if you join YC [1]. Which it should [2]. The $125K is just the cherry on top and ju…

This reasoning would be true only if YC was the only investor in town. In truth, the options actually are a superset of: * Do not raise * Join YC at a very low valuation and justify it with the nebulous value of the "YC network" * Raise from any other investor at an appropriate valuation and benefit from the nebulous value of their network.

The options are a huge superset of those you listed. Some that you didn't list are bonds, loans, and grants, but there are so many many avenues.

Re: A New Standard Deal

#92

Post by jacobsenscott » Sat, Jun 27, 2020, 4:00 PM UTC

edouard-harris wrote: post #79

jacobsenscott wrote: post #67

Earlier quoted context omitted.

Employers let employees fail all the time, and when that happens the stop giving them money. When a startup fails VCs stop giving them money. The illusion of autonomy motivates some people, but make make no mistake - when you take VC money you are an employee of that VC firm - with low pay, no benefits, no title, no desk, etc.

This isn't true in the general case. If you found a startup that's profitable, for example, you have genuine autonomy to an extent that you simply couldn't obtain as an employee, no matter how successful.

This is true in the general case. In the general case a startup isn't going to be successful, the founder is inexperienced and easily pushed around by the VCs, and generally needs to follow their orders to keep bridge rounds, etc coming.

In the rare case of a successful startup, if the board doesn't replace the founder with an experienced executive, the founder probably has as much autonomy as corporate executive in charge of a successful division of a company.

Re: A New Standard Deal

#93

Post by Havoc » Sat, Jun 27, 2020, 6:26 PM UTC

Dacod wrote: post #90

Havoc wrote: post #70

Didn’t realize yc did so big batches. Surely it’s basically a shotgun approach at that stage

They are not going to do a batch with 3000 companies. They are saying all in all this will allow them to fund more companies over the coming years - " In the coming years, this will enable us to fund as many as 3000 more companies".

Fair. Point still stands. My (misinformed) perception was that they were doing like 15 hot deals a year.

Re: A New Standard Deal

#94

Post by Chris2048 » Mon, Jun 29, 2020, 1:31 PM UTC

monadic2 wrote: post #53

ska wrote: post #37

Earlier quoted context omitted.

What is the opportunity cost of that land investment? Is YC really better off getting into the landlord business rather than using the same money to fund more companies?

I mean the money is going to landlords either way is it not?

A larger entity would have more bargaining power?

Re: A New Standard Deal

#95

Post by loco5niner » Tue, Jun 30, 2020, 6:52 PM UTC

jedberg wrote: post #61

I know this is HN and jokes are shunned, but you wrote "We do not expect this to be the last time we change the deal" and I can't help but think you missed a golden opportunity to write, "We have altered the deal. Pray we don't alter it any further".

Jokes aren't fully shunned, we're just picky :-)

Re: A New Standard Deal

#96

Post by heimatau » Mon, Jul 06, 2020, 4:29 PM UTC

joshpadnick wrote: post #33

Our startup is profitable, scaling, and in the single-digit millions of revenue per year. We don't have any investors but are still capital constrained. The default YC valuation of $125k/0.07 = ~$1.8M is way too low for us, nor do we want the requirement of having to meet with other startups once a week since we're already quite busy. Does YC have a "funding offering" for startups at our stage?

Why are looking an only YC? Find some other investor because you're already doing what very few companies are already doing.