YC interview advice
sam.bluwiki.com
YC interview advice
1–10 of 19 posts
Re: YC interview advice
#2"It has become clear that in this market you should have revenue by demo day. Ideally you're ramen profitable. It'll be much harder to find investment if you're not."
If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
Re: YC interview advice
#3"It has become clear that in this market you should have revenue by demo day. Ideally you're ramen profitable. It'll be much harder to find investment if you're not." If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
You're partially right, although this is outside the scope of my article. The article is simply stating that it's easier to find any investment (debt or equity) when you have revenue. Ironically, its easiest raise money when you're already making it.
Regardless, there are still good reasons to seek VC investment when profitable. Several YC startups are going down that path. A bank might lend you $10-50k if your net is $2k/month while a VC might invest $1-5 million.
Re: YC interview advice
#4"It has become clear that in this market you should have revenue by demo day. Ideally you're ramen profitable. It'll be much harder to find investment if you're not." If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
Because VC can oftentimes get you to the next level beyond ramen profitability faster than you can on your own. Even at ramen profitability you are still quite vulnerable to the whims of the market; it may make sense to have some VC cushion even at that point.
Re: YC interview advice
#5"It has become clear that in this market you should have revenue by demo day. Ideally you're ramen profitable. It'll be much harder to find investment if you're not." If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
Because a bank wouldn't give you money. They wouldn't trust mere revenue. They'd want assets as collateral.
Re: YC interview advice
#6"It has become clear that in this market you should have revenue by demo day. Ideally you're ramen profitable. It'll be much harder to find investment if you're not." If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
You're partially right, although this is outside the scope of my article. The article is simply stating that it's easier to find any investment (debt or equity) when you have revenue. Ironically, its easiest raise money when you're already making it. Regardless, there are still good reasons to seek VC investment when profitable. Several YC startups are going down that path. A bank might lend you $10-50k if your net i…
"Ironically, its easiest raise money when you're already making it."
I don't think it's ironic at all. VC investment involves a risk calculation, profitability means a lower risk but in return the VC should be willing to accept a higher valuation.
Re: YC interview advice
#7"It has become clear that in this market you should have revenue by demo day. Ideally you're ramen profitable. It'll be much harder to find investment if you're not." If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
You're partially right, although this is outside the scope of my article. The article is simply stating that it's easier to find any investment (debt or equity) when you have revenue. Ironically, its easiest raise money when you're already making it. Regardless, there are still good reasons to seek VC investment when profitable. Several YC startups are going down that path. A bank might lend you $10-50k if your net i…
How true is this? I'm not doubting you, just curious for other opinions.
We're raising money currently, and our investors have told us that revenues would come quite distant in terms of variables on if they'd invest. They love a great team, a huge user base and a lead on the market. Sure, having revenues extends your runway, but most investors seem to be of the opinion "users now, profits later".
I guess my question is, would a VC prefer a massive unmonetized user base, or a much smaller user base with revenues?
Re: YC interview advice
#8"the answer probably shouldn't involve ads"
Actually we're not as down on ads as other investors seem to be. We liked Heyzap, and they make money from ads.
"The last thing you want to do is argue with the partners."
That's an overstatement. We don't like people who supinely agree with everything we say. That's as bad as refusing to listen to anything we say. What we look for is a middle ground: people who respond intelligently to our suggestions.
Some of the suggestions we make are stupid. If people agree with those, we conclude they're stupid. (We don't do this on purpose to catch people. We just don't understand very well yet what each group is doing.)
Re: YC interview advice
#9"It has become clear that in this market you should have revenue by demo day. Ideally you're ramen profitable. It'll be much harder to find investment if you're not." If you're "ramen profitable", why do you need a VC at all? You're self-sufficient by that time, you have proven your product - you should be talking to a bank, not YC.
Because a bank wouldn't give you money. They wouldn't trust mere revenue. They'd want assets as collateral.
They might not give you much money, but they'd give you some! There are plenty of small businesses out there without any real saleable assets beyond their viable business activities and future income, indeed for many banks such a market is their speciality. You won't see a $10m loan on $2k/month, of course, but I should be very surprised if you couldn't at least get a $10k or $20k overdraft, which may well suffice to buy another couple of servers or contract a graphic designer or whatever it is you need to scale incrementally.
Conservatism is rife in the banking sector at the moment but at the same time, making loans is their job, after all.
Re: YC interview advice
#10Earlier quoted context omitted.
Because a bank wouldn't give you money. They wouldn't trust mere revenue. They'd want assets as collateral.
They might not give you much money, but they'd give you some! There are plenty of small businesses out there without any real saleable assets beyond their viable business activities and future income, indeed for many banks such a market is their speciality. You won't see a $10m loan on $2k/month, of course, but I should be very surprised if you couldn't at least get a $10k or $20k overdraft, which may well suffice to…
Just try it. Small business loans require collateral.
Banks aren't in the business of betting on the success or failure of companies. They're in the business of liquidity.