I know that the amount of funding is fixed, but the percentage that YC takes doesn't seem to be. Anyone from the previous batches successfully negotiated the percentage that YC asked for?
If you're accepted to YC, can you negotiate the percentage?
1–10 of 23 posts
Re: If you're accepted to YC, can you negotiate the percentage?
#2I'm not 100% sure, but my guess is no. Read:
http://paulgraham.com/webstartups.html
Section 2.
Re: If you're accepted to YC, can you negotiate the percentage?
#3No. You can turn us down though. (Two groups did, both very early on. I don't know what became of them.)
Re: If you're accepted to YC, can you negotiate the percentage?
#4The easiest and fasted way to lose at negotiating is to ask "is this negotiable?". When you negotiate, you are supposed to be convincing the other side to give you what you want on the terms you want. If, instead, you come into the negotiation looking powerless, you are going to end up with no deal or--worse--a bad deal.
You get 15 minutes or so to present your idea. One minute of that presentation should be about how much money you need to get started. I would not inflate that number, but I would not artificially constrain it to fit the "fixed" limit that YC has. I can't speak for YC, but I would guess that they aren't going to turn down a deal just because the founders demonstrated a need for $7500 per person instead of $5000 each, or whatever the details are. Similarly, if your idea is the best idea they've ever seen, then are they really going to be so rigid about the percentage? Especially if you offer a percentage before they do?
I realize PG said flat out "no" above. But, doesn't Mr. Graham strike you as somebody that has a "rules are meant to be broken" mentality? Don't you think that this is exactly the type of arbitrary rule that is easily broken without too much fuss?
Re: If you're accepted to YC, can you negotiate the percentage?
#5The easiest and fasted way to lose at negotiating is to ask "is this negotiable?". When you negotiate, you are supposed to be convincing the other side to give you what you want on the terms you want. If, instead, you come into the negotiation looking powerless, you are going to end up with no deal or--worse--a bad deal. You get 15 minutes or so to present your idea. One minute of that presentation should be about ho…
With 15 minutes, you don't have any time to justify a 50% increase in money and less than an order of magnitude seems negligible anyways. I think most people that actually have a need for more money are encouraged by YC to work on a limited subset of their initial problem before raising more money from another investor, which is easy enough to do for a promising YC startup.
Re: If you're accepted to YC, can you negotiate the percentage?
#6[deleted]
Re: If you're accepted to YC, can you negotiate the percentage?
#7Actually, the "negotiation" is proving what you're worth. If, when you come in, you're relatively far along, have a really compelling demo, you can prove a huge market, etc...you'll get a better valuation. The differences are small, but they do give somewhat different offers to different groups. And, of course, you can still say no when pg calls to give you the terms.
But, do take pity on pg--he's frazzled on that day. He calls everybody personally. I was impressed by how nice he managed to stay through the whole process (and even moreso now that I've seen first-hand how crowded pg's life is with people who want to be around him).
We went in knowing that we'd say "no" if the offer involved more than 6% equity...but it rarely does, so that wasn't a big concern. We're glad we weren't one of the "no" groups.
Re: If you're accepted to YC, can you negotiate the percentage?
#8No. You can turn us down though. (Two groups did, both very early on. I don't know what became of them.)
paul, if there is a standard process, is the % based on the number of founders, an evaluation, or both?
Re: If you're accepted to YC, can you negotiate the percentage?
#9The easiest and fasted way to lose at negotiating is to ask "is this negotiable?". When you negotiate, you are supposed to be convincing the other side to give you what you want on the terms you want. If, instead, you come into the negotiation looking powerless, you are going to end up with no deal or--worse--a bad deal. You get 15 minutes or so to present your idea. One minute of that presentation should be about ho…
With 15 minutes, you don't have any time to justify a 50% increase in money and less than an order of magnitude seems negligible anyways. I think most people that actually have a need for more money are encouraged by YC to work on a limited subset of their initial problem before raising more money from another investor, which is easy enough to do for a promising YC startup.
[deleted]
Re: If you're accepted to YC, can you negotiate the percentage?
#10The key to this is to discover the golden key of negotation:
BATNA- "Best Alternative To a Negotiated Agreement"
Your BATNA: To keep doing what you're doing, and not get rich by fulfilling your dream.
YC's BATNA: To fund someone else that is about 99% as good as you.
You have a lot more to lose by walking away, therefore YC holds an incredible amount of power in the negotiation.