7 ms·
I've always wondered how much of the money YC seeds to its founders eventually ends up in a landlord's pocket? $3000/month on a studio apartment. That's crazy b
by nojvek 10y ago
I've always wondered how much of the money YC seeds to its founders eventually ends up in a landlord's pocket? $3000/month on a studio apartment. That's crazy burnout for a startup.
- no_flags 10y agoWasn't there talk of building YC dorms at one point?
- sliverstorm 10y agoDoesn't really solve the problem, you have to buy out the landlords to get the land.
- superuser2 10y agoBut then you (rather than the landlords) can pocket the rent increases.
- sliverstorm 10y agoYes, except the sale price will probably have a good portion of expected future rent increases "priced in". (I'm not saying you won't make any money at all)
- kabdib 10y agoRemember who really got rich in the gold rushes of the 1800s? Not the miners.
- eldavido 10y agoYou live with a few roommates. It's not hard to find housing in SF for 900-1300/month if you're willing to make some lifestyle tradeoffs.
- whoiskevin 10y agoYes because we all want to relive the glory days of being a poor student. Will the tradeoff include a divorce and place to stay for the kids?
- hinkley 10y agoBrin built his company on a kind of ageism. Several kinds in fact. So that he and his peers think that continuing to live like you did in college isn't that big of a logical leap when you consider that their interview process feels exactly like a final exam in college, despite the fact that you and I and indeed Google's own success stories know the difference between theory and practice.
- ASinclair 10y ago> Yes because we all want to relive the glory days of being a poor student. I thought that's exactly what people in the startup world glorified.
- TeMPOraL 10y agoDays when "ramen-profitable" meant you actually ate ramen are over. Now everyone jumped on the fitness bandwagon, and eating various types of salads & green stuff is hip. And also expensive - "natural"/organic food is a big business these days.
- cmdrfred 10y agoRamen, just not Maruchan ramen. Asian bistro hand-made organic gluten free gastro molecular gastronomy ramen.
- brianobush 10y ago
- cel1ne 10y ago"So startups are just an inefficiency imposed on wealth transfer from VCs to landlords. What if someone disrupted the industry and connected VCs directly to landlords?" ;) (Source: https://labnotes.org/weekend-reading-hi-id-like-to-add-you/ https://labnotes.org/weekend-reading-hi-id-like-to-add-you/)
- superuser2 10y agoSeems like VCs would do well to buy some housing. A few more years of rent hikes down the line, "far below-market housing" could be a seriously compelling employee benefit. Apartments big enough to raise a family in would do wonders for employee retention.
- bobsil1 10y agoIIRC Microsoft bought the apartments across the street for visitors and interviewees, cheaper.
- cylinder 10y agoThat doesn't make sense though. They could still provide the same benefit by renting the apartment and giving it to the employee. Unless you think VCs should be betting on real estate, because that's the only advantage - they get the upside if the property goes up in value.
- st3v3r 10y agoHouses are comfier to live in than apartments?
- superuser2 10y agoCurrently, VCs must fund salary increases to keep pace with rent hikes. Renting apartments for employees just shuffles the numbers around. VCs could buy their way out of exposure to this phenomenon by owning their employee's homes and not increasing the rent. Yes, this is a bet on rising home prices in the Bay Area, but that seems basically equal to a bet on the Bay Area tech ecosystem, which is already their core business.
- outericky 10y agoMy sentiment is that after salaries most of the VC money gets funneled to landlords, lawyers, and subsidized food/food delivery.
- __derek__ 10y agoAh, that's why VCs were so bullish on food delivery companies.
- hinkley 10y agoA number of successful industries have owed a deal of their success to the fact that they slowly turned into real estate magnates. And not just their property but property around them. Maybe that suggests that these incubators should be owning rather than renting. Your investment in property is generally going to be recoverable if you have to kick out a failed startup.
- Animats 10y agoOne of the richest people in Silicon Valley is John Arrillaga.[1] He bought farmland in Silicon Valley and began converting it to office space. About a square kilometer of building floor space. [1] https://en.wikipedia.org/wiki/John_Arrillaga https://en.wikipedia.org/wiki/John_Arrillaga
- cm3 10y agoAnd he's father-in-law to Marc Andreessen, making it all look like some Texas oil family.
- rando18423 10y agocome on, don't bash Texas. The way Marc Andreessen just talks his book nonstop and ignores anything else would make Wall Steet deathly proud.
- deleted 10y ago[deleted]
- cm3 10y agoSorry, wasn't trying to bash Texas. Maybe I should have said "Dallas oil dynasty". I haven't seen, read or viewed anything from or with Marc after he left Netscape, so I can't comment on what he's doing these days. All I know is that he's part of a VC.
- ryanSrich 10y agoI can't imagine a lot of it. At some point you make the conscious decision to quit your current job and work on your startup. If you've prepared financially for that joining YC shouldn't really change that. You're spending your own money on your own rent. Granted, if you can't afford rent in SV you might want to reconsider joining a YC class. It's a tough decision for sure.