6 ms·

YC Continuity

316 points by dshankar 11y ago

ChuckMcM 11y ago
While I think its great to participate pro-rata in later rounds, it feels a lot like YC is backing into becoming yet-another-VC like Sequoia or any other firm in the valley, granted with their 'incubator arm'. I'd be interested in hearing how being more like a regular VC firm helps YC be better at what it is currently.
- vasilipupkin 11y ago
  well, if you think you are good at investing in startups and helping startups succeed, then artificially limiting the stage at which you are willing to do it seems suboptimal in the long run
- sama 11y ago
  This will just be a small part of what we do. There are now 15 partners on the early stage side and 1 on the late stage side. Two thoughts: 1) In the same way YC was able to make the early-stage ecosystem better for founders, we think we can do the same for the late-stage ecosystem. 2) It's important that we can support companies at later stages in areas that other investors don't like to support.
  - ChuckMcM 11y ago
    It will be interesting to watch how it evolves, did you consider creating a new entity? Having been through the process three times now (on the side of the startup, not the firm) its been interesting to evaluate the different focus and people who populate the later stage companies from the early stage companies. Clearly the questions and metrics are different, but I've found the engagement to be different too. Much more bankerish and less advisorish if that rings any bells at all. I think YC changed the early stage game in a fundamental way, much better than Angels it has the whole network effect of both Angels and every company that has been through the program. I guess I'd like to challenge you to be more innovative as a late stage investor than announcement seemed to suggest.
  - rory096 11y ago
    Can you give an example of an area that late-stage investors don't support? Do you mean something like fusion research, which will obviously have payoffs >10-20 years down the line? (Why don't current VCs invest in those areas, if they're potentially profitable? Just a lack of a long-term view / fund wind-down timelines?)
    - sama 11y ago
      That is a good specific example :)
    - bahularora 11y ago
      They don't because they have to give a return to PEs, I think most VCs have 5-6 year funding cycle.
  - vm 11y ago
    How will you manage negative signaling? i.e. YC leads a growth round for Company A, but not for Company B. Ergo, VCs think Company B isn't worth funding.
    - sama 11y ago
      The main thing we're doing here is not making any discretionary bets on companies until they're far enough along to be valued off of an Excel model. At that stage, signaling matter much much less.
      - vasilipupkin 11y ago
        Is there a subtle conflict of interest with YC essentially benefiting from lower early round valuations, whereas before this was not the case, e.g. YC and startups were aligned on valuation
  - mburshteyn4 11y ago
    Makes sense. No reason why YC needs to recede over time and progressive funding rounds. Long tail early stage startups are the beachhead, this is the "big vision" -- vertically integrate the VC stack. Right now other VCs are benefiting from the value YC adds at the beginning of a company's life. YC's stake increases in value, but this lets YC keep betting on itself. Good stuff.
- seiji 11y ago
  That's why startups exist, right? Startups start as small, focused, nimble entities moving faster than old established things. But, eventually the small, focused, nimble startup becomes successful and itself grows into an oversized sprawling entity. YC isn't immune to becoming too big for themselves. It just opens up room for a new "startup yc" where everybody can have a strong initial impact again (until the new one grows too big too, then the cycle starts again).
- andrewtbham 11y ago
  They had to do something, think about all the money they have left on the table by not making pro-rata investments in airbnb and dropbox. Not leading the rounds does seem to mitigate the signaling risk issue. imho it's a risky strategy if valuations get frothy. They may be making investments they might not be comfortable with to preserve their integrity.
  - chmullig 11y ago
    Not just may, they definitely will be making investments they'd rather not because of signaling. They obviously think that's a worthwhile trade for the upside on the next Dropbox.
  - Matt_Mickiewicz 11y ago
    According to this article, YCombinator took the entire Series Seed round for AirBnB -- https://arenavc.com/2015/07/airbnb-my-1-billion-lesson/ https://arenavc.com/2015/07/airbnb-my-1-billion-lesson/
rdl 11y ago
Curious if in 5 years YC figures out a way to OpenIPO YC companies, solving the private/public market impedance mismatch which seems to be happening now.
- dshankar 11y ago
  Instead, I wonder if YC can formalize & self-regulate a secondary market as an intermediate step before IPOs. This is already happening, but with undesirable side effects.
  - nostromo 11y ago
    Someday I'd love to see a decentralized equity exchange built on block chain technology. Maybe YC could pioneer this approach down the road.
    - ceejayoz 11y ago
      Bitcoin was bad enough with multi-million dollar fortunes evaporating into thin air after people got hacked. Suggesting tying company ownership to such a thing makes me wonder if we're seeing Poe's Law in action.
      - nostromo 11y ago
        The existing ways of selling equity to the public also has drawbacks, such as high transactional costs. And, yes, multi-million dollar fortunes have evaporated into thin air under our existing legal structures -- Eduardo Severin for example. I agree this isn't something that is ready for primetime today - but it could be in the near future. Even multinational banks are now looking into using block chains for funds transfer.
        ceejayoz 11y ago
        Let's not pretend Saverin's situation is anything comparable to the ease of stealing someone's bitcoins. He also had legal recourse, which he used, successfully.
geofft 11y ago
Previous post on the pro rata thing seems to be https://blog.ycombinator.com/pro-rata https://blog.ycombinator.com/pro-rata -- AFAICT, the change there is that it's now <$300MM instead of <=$250MM.
BinaryIdiot 11y ago
So this announcement got me thinking and while this is slightly off topic and it may seem like a dumb question but I'm going to ask it anyway because I'm curious: where does YC get the money to do everything it does (seed and later stage investment, research, running hacker news, employees, startup school, etc)? I mean I know roughly how it works from the standpoint of taking investment money and funneling it into companies but unless I missed it I have yet to see them "cash out" on any existing investments so are they bringing in any money from those investments or is it just more and more funding to do further investments that powers everything?
- andrewtbham 11y ago
  they have had exits. twitch sold to amazon. heroku sold to salesforce. parse sold to facebook. compose.io sold to ibm. https://www.crunchbase.com/organization/y-combinator/exits https://www.crunchbase.com/organization/y-combinator/exits
- sama 11y ago
  We have had a number of exits, and two or three times we've sold some of our stock in our larger companies for cashflow for operations. Partners have also contributed money. Going forward, we'll get some management fees from this fund that will contribute to operations. We also practice what we preach to startups, and spend surprisingly little money each year--our all-in cost for 2015 is about equal to the salary of 2 GPs at many other firms.
  - BinaryIdiot 11y ago
    Ah I had no idea. Thanks for the clarification!
  - CrackpotGonzo 11y ago
    That's amazing. Love that you practice what you preach with respect to keeping spend low. Have you shared more details about where your money goes?
  - pw 11y ago
    Someone want to chime in and give us an idea of approximately how much the "salary of 2 GPs" is? Also, by "all-in cost" is he talking about all expenditures except for actual monies invested?
rdl 11y ago
I wonder how long until YC goes upstream of fellowship/startup school: consolidated remote/mini internships for high school students, or some other "get involved with YC companies early" kind of thing. Especially likely to happen once the first cohort of YC founders has kids of age 12-18.
- chucksmash 11y ago
  Are those 12-18 year olds well served by something like a startup themed summer camp? If there are kids who are truly interested in it than so be it but I'd hate to see something like this turned into just another impressive extracurricular checkbox on college applications.
  - tajen 11y ago
    On a particular occasion, PG said that people are better when they have 10 years of experience in programming. He created a few workarounds so that people from one minority and suitable experience get favourable exposure, but to my knowledge he didn't come back on the "requirement". Does it do well to tie 12-18 years olds into a formatted scheme?
    - strayptr 11y ago
      It's more common nowadays for an 18 year old to have 10 years of experience programming. Certainly it's uncommon, but the set of all 18 year olds who've been programming for 10 years are a subset of those who'd benefit tremendously from a YC program for young adults. And YC has shown that even though money is a focus, it's not their primary focus. Is there value in such a program? I think so. Even if the program serves as nothing more than a reminder to young people that there are those in the world who believe in them, it would be a win. Getting young people to consider "What are some strategies for me to change the world?" before "What type of job do I want?" might yield a better world.
- seiji 11y ago
  Why not go earlier and just steal babies from parents, figure out which ones are Destined For Greatness, then throw away the rest? After all, you've either got it or you don't. (Imagine if you could genetically test people for Founder Greatness. But then you'd have to take them away from home at a young age so they don't see their mother sold into slavery. Otherwise they'll return 10 years later for revenge, fully succumbing to the dark side.) At some point life experience has to happen outside of YC VC invest startup win exit pivot iterate mvp lean partner found excellence smartest-founders-under-8-years-old bubble land. There's also the risk of "startup dynasty" — like how mark's sister became an associate parter at a VC firm and his other sister turned into a "self-made" social phenom of blandness-by-association. meritocracy for all, but meritocracy more for the friends and family of the already successful.
calgaryeng 11y ago
> Capital -- especially long-term capital willing to invest outside of the current trends -- is an important ingredient in that mission. Does anyone else read this and take away "[investors/VCs/other equity funds who don't group-think and blindly follow each other based on FOMO] are an important ingredient in that mission."
- cheepin 11y ago
  I just read it as "Accepting higher variance investments". Start-ups are already high variance, but going outside of existing trends pushes it even higher.
mattty 11y ago
It will be interesting to see YC manage the tension of being founder-friendly at later stage companies. Statistically[0], the later stage the company, the likelier it is the founder isn't running the show. Is founder ceo succession inherently less likely at YC startups due to YC selection process? [0]: The Founder's Dilemmas, Wasserman, p.299
larrys 11y ago
These comments I've reproduced below make me wonder again at what point will YC have their hands in to many pots and risk straying from the original formula which has worked so well. There is of course a need to evolve, change and add products. However in a small organization you also have to be able to manage all of that without having existing or new employees (or management) choke on the added complexity. Sama only has so many hours in a day. Even if there are more partners there is still glue that holds everything together. People at the top. sama: "In the same way YC was able to make the early-stage ecosystem better for founders, we think we can do the same for the late-stage ecosystem." rdl: "Curious if in 5 years YC figures out a way to OpenIPO YC companies, solving the private/public market impedance mismatch which seems to be happening now." dshankar: "Instead, I wonder if YC can formalize & self-regulate a secondary market as an intermediate step before IPOs. " rdl: "I wonder how long until YC goes upstream of fellowship/startup school: consolidated remote/mini internships for high school students, or some other "get involved with YC companies early" kind of thing." Many things going on. No way of knowing all of this could work out fine. Just to me, from my observation of business over many years (not specific to startups) I say "DWR" [1] [1] Danger Will Robinson.
not_that_noob 11y ago
Awesome! I'm a natural born cynic, but even I have to say that YC has reshaped the entrepreneurial financing ecosystem in the Valley. All these new funds falling all over themselves to be founder friendly, while the old legacy vultures slowly slip into irrelevance - this is the world that pg, sama and team have wrought. As an entrepreneur, thank you for existing.
samstave 11y ago
It would really be wonderful, if, when you announce some new person, you could at least provide a link to their linkedin or some other page telling me who the heck this person is. Most of us are not that connected in SV that we know every name you do... so please provide context. Thanks
- paul 11y ago
  http://blog.ycombinator.com/welcome-ali http://blog.ycombinator.com/welcome-ali
  - samstave 11y ago
    Thanks! -- I must have missed that completely.
  - ahaseeb 11y ago
    He is an amazing person. YC is fantastic at attracting talent
jpeg_hero 11y ago
sama, of 1,000 co's how many have exited to date? Exit as in: cash or public stock readily convertible to cash Know there is a timing issue, but would be interested in just total actual exits?
- outericky 11y ago
  sama published some metrics recently... most of this is publicly accessible; that said, YC may have sold their positions in some companies (unknown). Twitch, heroku, reddit, omgpop, others... YC may (or may not) still hold Dropbox, and many others.
sova 11y ago
what does full partnership entail? -- thanks, newbie me
jkurnia 11y ago
Does this affect YC nonprofits - will they be eligible for follow-on funding, as well?
DanielDent 11y ago
The previous firm policy of not making follow-on investments had two interesting side effects: signalling risk, and the nature of the relationship with the founders. You've addressed signalling risk in another response, but I'm curious to hear your thinking about the impact this will have on your ability to have an authentic advisory relationship with founders. Do you have any concerns that this could make founders dial back their level of authenticity with you? I think there's tremendous value in having founders who are comfortable being completely transparent about the concerns they have. In the back of founders minds, there could now be a small voice saying "Should I discuss possible future issue X with YC? If we haven't come up with a good answer to X, it could impact the next round. We'd be better off dealing with X after our series C rather than after our series B." But in not having the conversation, tremendous value is lost - good advice might turn it into a non-issue.
marcamillion 11y ago
I would just like to say that when PG announced he was handing over YC to sama I was a bit nervous. Not because I didn't have faith in sama, but because handing over the reins hardly ever goes according to how the departing CEO/President/founder says it will go. I must say Sama...I am truly impressed. I honestly wasn't sure how much better YC could have become when PG stepped down, but looking back...just from the outside looking in...it seems to have gotten at least 5X better if not more. So keep up the good work you (guys) do. I suspect though that it is also testament to the team you have around you as well. PG used to say you were one of the smartest people he knows, but many people are smart. It is quite a different thing to be effective and you have been remarkably effective at doubling down and significantly improving the value that YC truly creates. It is wonderful to witness, as much as watching Musk do his thing.

316 points by dshankar 11y ago

While I think its great to participate pro-rata in later rounds, it feels a lot like YC is backing into becoming yet-another-VC like Sequoia or any other firm in the valley, granted with their 'incubator arm'. I'd be interested in hearing how being more like a regular VC firm helps YC be better at what it is currently.

vasilipupkin 11y ago
well, if you think you are good at investing in startups and helping startups succeed, then artificially limiting the stage at which you are willing to do it seems suboptimal in the long run
sama 11y ago
This will just be a small part of what we do. There are now 15 partners on the early stage side and 1 on the late stage side. Two thoughts: 1) In the same way YC was able to make the early-stage ecosystem better for founders, we think we can do the same for the late-stage ecosystem. 2) It's important that we can support companies at later stages in areas that other investors don't like to support.
- ChuckMcM 11y ago
  It will be interesting to watch how it evolves, did you consider creating a new entity? Having been through the process three times now (on the side of the startup, not the firm) its been interesting to evaluate the different focus and people who populate the later stage companies from the early stage companies. Clearly the questions and metrics are different, but I've found the engagement to be different too. Much more bankerish and less advisorish if that rings any bells at all. I think YC changed the early stage game in a fundamental way, much better than Angels it has the whole network effect of both Angels and every company that has been through the program. I guess I'd like to challenge you to be more innovative as a late stage investor than announcement seemed to suggest.
- rory096 11y ago
  Can you give an example of an area that late-stage investors don't support? Do you mean something like fusion research, which will obviously have payoffs >10-20 years down the line? (Why don't current VCs invest in those areas, if they're potentially profitable? Just a lack of a long-term view / fund wind-down timelines?)
  - sama 11y ago
    That is a good specific example :)
  - bahularora 11y ago
    They don't because they have to give a return to PEs, I think most VCs have 5-6 year funding cycle.
- vm 11y ago
  How will you manage negative signaling? i.e. YC leads a growth round for Company A, but not for Company B. Ergo, VCs think Company B isn't worth funding.
  - sama 11y ago
    The main thing we're doing here is not making any discretionary bets on companies until they're far enough along to be valued off of an Excel model. At that stage, signaling matter much much less.
    - vasilipupkin 11y ago
      Is there a subtle conflict of interest with YC essentially benefiting from lower early round valuations, whereas before this was not the case, e.g. YC and startups were aligned on valuation
- mburshteyn4 11y ago
  Makes sense. No reason why YC needs to recede over time and progressive funding rounds. Long tail early stage startups are the beachhead, this is the "big vision" -- vertically integrate the VC stack. Right now other VCs are benefiting from the value YC adds at the beginning of a company's life. YC's stake increases in value, but this lets YC keep betting on itself. Good stuff.
seiji 11y ago
That's why startups exist, right? Startups start as small, focused, nimble entities moving faster than old established things. But, eventually the small, focused, nimble startup becomes successful and itself grows into an oversized sprawling entity. YC isn't immune to becoming too big for themselves. It just opens up room for a new "startup yc" where everybody can have a strong initial impact again (until the new one grows too big too, then the cycle starts again).
andrewtbham 11y ago
They had to do something, think about all the money they have left on the table by not making pro-rata investments in airbnb and dropbox. Not leading the rounds does seem to mitigate the signaling risk issue. imho it's a risky strategy if valuations get frothy. They may be making investments they might not be comfortable with to preserve their integrity.
- chmullig 11y ago
  Not just may, they definitely will be making investments they'd rather not because of signaling. They obviously think that's a worthwhile trade for the upside on the next Dropbox.
- Matt_Mickiewicz 11y ago
  According to this article, YCombinator took the entire Series Seed round for AirBnB -- https://arenavc.com/2015/07/airbnb-my-1-billion-lesson/ https://arenavc.com/2015/07/airbnb-my-1-billion-lesson/

rdl 11y ago

Curious if in 5 years YC figures out a way to OpenIPO YC companies, solving the private/public market impedance mismatch which seems to be happening now.

dshankar 11y ago
Instead, I wonder if YC can formalize & self-regulate a secondary market as an intermediate step before IPOs. This is already happening, but with undesirable side effects.
- nostromo 11y ago
  Someday I'd love to see a decentralized equity exchange built on block chain technology. Maybe YC could pioneer this approach down the road.
  - ceejayoz 11y ago
    Bitcoin was bad enough with multi-million dollar fortunes evaporating into thin air after people got hacked. Suggesting tying company ownership to such a thing makes me wonder if we're seeing Poe's Law in action.
    - nostromo 11y ago
      The existing ways of selling equity to the public also has drawbacks, such as high transactional costs. And, yes, multi-million dollar fortunes have evaporated into thin air under our existing legal structures -- Eduardo Severin for example. I agree this isn't something that is ready for primetime today - but it could be in the near future. Even multinational banks are now looking into using block chains for funds transfer.
      - ceejayoz 11y ago
        Let's not pretend Saverin's situation is anything comparable to the ease of stealing someone's bitcoins. He also had legal recourse, which he used, successfully.

geofft 11y ago

Previous post on the pro rata thing seems to be https://blog.ycombinator.com/pro-rata https://blog.ycombinator.com/pro-rata -- AFAICT, the change there is that it's now <$300MM instead of <=$250MM.

BinaryIdiot 11y ago

So this announcement got me thinking and while this is slightly off topic and it may seem like a dumb question but I'm going to ask it anyway because I'm curious: where does YC get the money to do everything it does (seed and later stage investment, research, running hacker news, employees, startup school, etc)? I mean I know roughly how it works from the standpoint of taking investment money and funneling it into companies but unless I missed it I have yet to see them "cash out" on any existing investments so are they bringing in any money from those investments or is it just more and more funding to do further investments that powers everything?

andrewtbham 11y ago
they have had exits. twitch sold to amazon. heroku sold to salesforce. parse sold to facebook. compose.io sold to ibm. https://www.crunchbase.com/organization/y-combinator/exits https://www.crunchbase.com/organization/y-combinator/exits
sama 11y ago
We have had a number of exits, and two or three times we've sold some of our stock in our larger companies for cashflow for operations. Partners have also contributed money. Going forward, we'll get some management fees from this fund that will contribute to operations. We also practice what we preach to startups, and spend surprisingly little money each year--our all-in cost for 2015 is about equal to the salary of 2 GPs at many other firms.
- BinaryIdiot 11y ago
  Ah I had no idea. Thanks for the clarification!
- CrackpotGonzo 11y ago
  That's amazing. Love that you practice what you preach with respect to keeping spend low. Have you shared more details about where your money goes?
- pw 11y ago
  Someone want to chime in and give us an idea of approximately how much the "salary of 2 GPs" is? Also, by "all-in cost" is he talking about all expenditures except for actual monies invested?

rdl 11y ago

I wonder how long until YC goes upstream of fellowship/startup school: consolidated remote/mini internships for high school students, or some other "get involved with YC companies early" kind of thing. Especially likely to happen once the first cohort of YC founders has kids of age 12-18.

chucksmash 11y ago
Are those 12-18 year olds well served by something like a startup themed summer camp? If there are kids who are truly interested in it than so be it but I'd hate to see something like this turned into just another impressive extracurricular checkbox on college applications.
- tajen 11y ago
  On a particular occasion, PG said that people are better when they have 10 years of experience in programming. He created a few workarounds so that people from one minority and suitable experience get favourable exposure, but to my knowledge he didn't come back on the "requirement". Does it do well to tie 12-18 years olds into a formatted scheme?
  - strayptr 11y ago
    It's more common nowadays for an 18 year old to have 10 years of experience programming. Certainly it's uncommon, but the set of all 18 year olds who've been programming for 10 years are a subset of those who'd benefit tremendously from a YC program for young adults. And YC has shown that even though money is a focus, it's not their primary focus. Is there value in such a program? I think so. Even if the program serves as nothing more than a reminder to young people that there are those in the world who believe in them, it would be a win. Getting young people to consider "What are some strategies for me to change the world?" before "What type of job do I want?" might yield a better world.
seiji 11y ago
Why not go earlier and just steal babies from parents, figure out which ones are Destined For Greatness, then throw away the rest? After all, you've either got it or you don't. (Imagine if you could genetically test people for Founder Greatness. But then you'd have to take them away from home at a young age so they don't see their mother sold into slavery. Otherwise they'll return 10 years later for revenge, fully succumbing to the dark side.) At some point life experience has to happen outside of YC VC invest startup win exit pivot iterate mvp lean partner found excellence smartest-founders-under-8-years-old bubble land. There's also the risk of "startup dynasty" — like how mark's sister became an associate parter at a VC firm and his other sister turned into a "self-made" social phenom of blandness-by-association. meritocracy for all, but meritocracy more for the friends and family of the already successful.

calgaryeng 11y ago

> Capital -- especially long-term capital willing to invest outside of the current trends -- is an important ingredient in that mission. Does anyone else read this and take away "[investors/VCs/other equity funds who don't group-think and blindly follow each other based on FOMO] are an important ingredient in that mission."

cheepin 11y ago
I just read it as "Accepting higher variance investments". Start-ups are already high variance, but going outside of existing trends pushes it even higher.

mattty 11y ago

It will be interesting to see YC manage the tension of being founder-friendly at later stage companies. Statistically[0], the later stage the company, the likelier it is the founder isn't running the show. Is founder ceo succession inherently less likely at YC startups due to YC selection process? [0]: The Founder's Dilemmas, Wasserman, p.299

larrys 11y ago

These comments I've reproduced below make me wonder again at what point will YC have their hands in to many pots and risk straying from the original formula which has worked so well. There is of course a need to evolve, change and add products. However in a small organization you also have to be able to manage all of that without having existing or new employees (or management) choke on the added complexity. Sama only has so many hours in a day. Even if there are more partners there is still glue that holds everything together. People at the top. sama: "In the same way YC was able to make the early-stage ecosystem better for founders, we think we can do the same for the late-stage ecosystem." rdl: "Curious if in 5 years YC figures out a way to OpenIPO YC companies, solving the private/public market impedance mismatch which seems to be happening now." dshankar: "Instead, I wonder if YC can formalize & self-regulate a secondary market as an intermediate step before IPOs. " rdl: "I wonder how long until YC goes upstream of fellowship/startup school: consolidated remote/mini internships for high school students, or some other "get involved with YC companies early" kind of thing." Many things going on. No way of knowing all of this could work out fine. Just to me, from my observation of business over many years (not specific to startups) I say "DWR" [1] [1] Danger Will Robinson.

not_that_noob 11y ago

Awesome! I'm a natural born cynic, but even I have to say that YC has reshaped the entrepreneurial financing ecosystem in the Valley. All these new funds falling all over themselves to be founder friendly, while the old legacy vultures slowly slip into irrelevance - this is the world that pg, sama and team have wrought. As an entrepreneur, thank you for existing.

samstave 11y ago

It would really be wonderful, if, when you announce some new person, you could at least provide a link to their linkedin or some other page telling me who the heck this person is. Most of us are not that connected in SV that we know every name you do... so please provide context. Thanks

paul 11y ago
http://blog.ycombinator.com/welcome-ali http://blog.ycombinator.com/welcome-ali
- samstave 11y ago
  Thanks! -- I must have missed that completely.
- ahaseeb 11y ago
  He is an amazing person. YC is fantastic at attracting talent

jpeg_hero 11y ago

sama, of 1,000 co's how many have exited to date? Exit as in: cash or public stock readily convertible to cash Know there is a timing issue, but would be interested in just total actual exits?

outericky 11y ago
sama published some metrics recently... most of this is publicly accessible; that said, YC may have sold their positions in some companies (unknown). Twitch, heroku, reddit, omgpop, others... YC may (or may not) still hold Dropbox, and many others.

sova 11y ago

what does full partnership entail? -- thanks, newbie me

jkurnia 11y ago

Does this affect YC nonprofits - will they be eligible for follow-on funding, as well?

DanielDent 11y ago

The previous firm policy of not making follow-on investments had two interesting side effects: signalling risk, and the nature of the relationship with the founders. You've addressed signalling risk in another response, but I'm curious to hear your thinking about the impact this will have on your ability to have an authentic advisory relationship with founders. Do you have any concerns that this could make founders dial back their level of authenticity with you? I think there's tremendous value in having founders who are comfortable being completely transparent about the concerns they have. In the back of founders minds, there could now be a small voice saying "Should I discuss possible future issue X with YC? If we haven't come up with a good answer to X, it could impact the next round. We'd be better off dealing with X after our series C rather than after our series B." But in not having the conversation, tremendous value is lost - good advice might turn it into a non-issue.

marcamillion 11y ago

I would just like to say that when PG announced he was handing over YC to sama I was a bit nervous. Not because I didn't have faith in sama, but because handing over the reins hardly ever goes according to how the departing CEO/President/founder says it will go. I must say Sama...I am truly impressed. I honestly wasn't sure how much better YC could have become when PG stepped down, but looking back...just from the outside looking in...it seems to have gotten at least 5X better if not more. So keep up the good work you (guys) do. I suspect though that it is also testament to the team you have around you as well. PG used to say you were one of the smartest people he knows, but many people are smart. It is quite a different thing to be effective and you have been remarkably effective at doubling down and significantly improving the value that YC truly creates. It is wonderful to witness, as much as watching Musk do his thing.