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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 cont
by 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 agoAh I had no idea. Thanks for the clarification!
- CrackpotGonzo 11y agoThat'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 agoSomeone 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?
- sama 11y agoJust asked our CFO--she thinks we will be at about $8MM for 2015 not counting investments.
- rattray 11y agoImpressive transparency. Thanks @sama.
- samstave 11y agoSo a General Partner at an average VC makes $4mm per year?
- austenallred 11y agoI'd argue that's not "average," that's probably a good GP at a top VC firm, but it's by no means unreasonable.
- cma 11y agoHigh end might be so high that even though it is more than median it still ends up being the mean.
- ddlatham 11y ago$8mm is for 2015. Salary of 2 GPs is for 2014. Likely some increase from 2014 to 2015.
- the_watcher 11y agoI think he means total cost to the firm - salary, benefits, insurance, equipment, expenses (VC's travel a lot), etc.
- outericky 11y agoYuuupppp!!! that sounds like what sama is implying. But sounds about right.
- logicallee 11y agoSama, how does this commitment to fund companies for life, up to $300 million valuation combine with your own belief that current funding rounds might be bubbly: specifically does this not substantially raise the bar for applicant companies that you are not sure about, by eliciting in you the natural reasoning while you're thinking about YC applications: "Interesting idea. On the other hand this idea may suck. I'm not decided. But if it does suck they may still continue to raise rounds until the overvaluation climate is corrected, and we are committed to funnelling them money while they do. Then it will correct, and since the idea sucks we will lose money. So, we won't invest now, it's too big of a commitment. If they build the idea elsewhere and it turns out not to suck, we can reconsider then." The direct effect of this is that "backtesting" this reasoning would have resulted in many of your biggest successes, simply not being funded at all. (Because they were too large gambles.) Note: due to the provocative question I would have preferred to ask you by email, but I think it just gets routed away and you don't see my emails.
- sama 11y agoit doesn't effect our decision making. the best companies end up raising most of the money--we've looked at this in detail.
- logicallee 11y agothanks, agreed on your second point.