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It sounds like YC serves as a vehicle to bring deals to YC partners, who make a killing funding the most promising candidates from the YC batch. This has made
by codex 13y ago
It sounds like YC serves as a vehicle to bring deals to YC partners, who make a killing funding the most promising candidates from the YC batch. This has made so much money for YC partners that they still want to continue to pick winners, but they don't want to kill the golden goose, so they withhold their blessings for three weeks. YC companies will still prefer the partners for funding over some random VC, so they still get the deals, but now the relative losers from the YC batch will get more funding from the more clueless VCs.
- CyrusL 13y agoThat's not true. An angel investment after demo day is worth a lot less equity than the YC investment. Most YC companies raise their seed rounds at $5 million - $20 million valuations, so it would take many hundreds of thousands or even a couple million to end up with the same 7% that YC gets.* That kind of money would usually be put in by a larger fund. Most angels write checks for $25k-$100k. * One difference being that the demo day investors will have preferred shares upon conversion and YC takes the same common shares that the founders and employees get.
- brayton 13y agoYes it could be worth a lot less equity but you can still make a killing with those small investments in the right companies
- lawnchair_larry 13y agoYeah, what individual would want to even bother with only 1% of AirBnB or Dropbox!