4 ms·
Actually, it's rather clear that Y Combinator has no plans for an exit event. To quote Paul Graham himself (https://news.ycombinator.com/item?id=13784 https://
by kjksf 9y ago
Actually, it's rather clear that Y Combinator has no plans for an exit event.
To quote Paul Graham himself (https://news.ycombinator.com/item?id=13784 https://news.ycombinator.com/item?id=13784):
"Ordinarily a startup should be a C corp. It's cheaper to be an LLC, but if you plan to succeed, you may as well do things right from the start.
With an LLC profits don't get taxed twice like in a regular corporation. So it makes sense to be an LLC if you expect to have substantial profits, but don't expect to grant options, sell shares, or get bought. Consulting firms and law partnerships are often LLCs. YC is an LLC."
So the shares in YC are worth $0.
- Judgmentality 9y agoUnless the YC shares are actually shares in all their companies, including DropBox and AirBnB which will inevitably IPO at some point.
- bobosha 9y ago> Consulting firms and law partnerships are often LLCs LLPs perhaps?
- zodiac 9y agoBut shares in law partnerships aren't worthless. Presumably YC pays its profits (when its portfolio companies have exit events) out to shareholders, so its shares are worth the future value of those profits.
- jacquesm 9y agoThe idea that shares are worth $0 because there are no plans for an exit is ridiculous.
- koolba 9y agoIf there's no dividends or liquidation ability then why would they be valued anything but zero?
- jacquesm 9y agoThe valuation of a company is a reflection of the value of the underlying assets. In the case of YC that is the sum of the value of all the companies YC holds stock in plus intangibles such as the value of the YC brand.
- tedmiston 9y agoYou could liquidate the shares by leaving the company.