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This is why YC is such a breath of fresh air for entrepreneurs. VCs aren't bad for this behavior, it's completely rational, but if the big winners look like red

by randall 10y ago

This is why YC is such a breath of fresh air for entrepreneurs. VCs aren't bad for this behavior, it's completely rational, but if the big winners look like red flag city initially, a higher investment rate of smaller capital allocations can net better outcomes. (Airbnb / Pebble for the up and downsides) YC's scaling over the last few years w/ sam + pb (and now michael) is a feature that some see as a bug of dilution. 200 companies a year now get extra access to angel money at a minimum, some percentage of which (mine!) likely wouldn't have normal access b/c of red flags.

dilemma 10y ago
>VCs aren't bad for this behavior, it's completely rational, but if the big winners look like red flag city initially, a higher investment rate of smaller capital allocations can net better outcomes. And this is one of the reasons why human organizations eventually stagnate and then decline. They get too big so that they have to manage by filtering out those unique opportunities that would have been necessary for their survival.