4 ms·
Meh, I disagree. 7% of equity can net some top talent, and I don't think any VC can claim to match what 7% worth of talent can bring. This is of course, only tr
by banachtarski 11y ago
Meh, I disagree. 7% of equity can net some top talent, and I don't think any VC can claim to match what 7% worth of talent can bring. This is of course, only true if money isn't an issue, and for a later stage company, money won't be an issue. Instead, equity is the scarcer resource, and selling 7% of it for a measly 120k should be an absolute negative signal to future investors.
- pbreit 11y agoSurely they could/should of negotiated down a couple points? Is YC's formula that rigid? I'm sure Quora was way less.
- pjlegato 11y ago> for a measly 120k Spoken like someone who has always had easy access to 120k, which is unfortunately not the case for the vast majority of people.
- nsgi 11y agoIt's not much for a late-stage company.
- bmm6o 11y agoIt's not that $120K is nothing, it's that they already had $1M in funding, which they must have gotten way more cheaply than the YC money. If you just value the company at the amount of money in the bank, the 7% stake they traded to YC is worth $70K today (of course it's more complicated than that - I'm just spitballing numbers).
- deleted 11y ago[deleted]
- lacker 11y agoYou will recruit better offering 0.93X equity in a YC-backed company, compared to X equity in that same company that had just turned down YC.
- banachtarski 11y agoThe timing is different. If you got backed by YC late in the game, my assumption if I'm considered as a hire is that you got ripped off unless you negotiated heavily and successfully. The signal is completely different.