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This is a great article, Paul. I have one question, if you do not mind setting off on a tangent. You said that start-up investing is a seller's market now. Why

by hristov 16y ago

This is a great article, Paul. I have one question, if you do not mind setting off on a tangent. You said that start-up investing is a seller's market now. Why is that? In general "a sellers market" would indicate that there a lot of investor money in comparison with startup opportunities. Is it because there profitable exists which are bringing more money in? I have been following the news and while the number of buyouts seem to be increasing, many of them are at valuations which would not indicate much profit for the investors. Also VCs keep telling me that they have trouble getting funds as their traditional institutional investors have soured on the VC investment class. So that would indicate something other than a seller's market. Or do you think that because there is so much activity with start-ups, investors have already decided that some companies that have not yet reached an exit (e.g., Twitter, Foursquare) are defacto winners, so that there is an assumption of high profitability even without the exits. Or do you think it is a sellers market because more money is going to silicon valley now that many of the wall street profit making schemes have stopped working. Or is it possible that it only seems like a seller's market to you because Y-combinator is so successful and popular that investing in Y-combinator startups is indeed a seller's market, while this may not be the case overall.

pg 16y ago
It's clearly not just YC. I'm not sure what's happening. It could be the leading edge of a very uneven recovery. It could be a secular trend of more interest in investing in startups; i.e. a recovery from the previous crash. Or it could be due to the super-angels, who are more aggressive in early stage deals than VCs.
iamelgringo 16y ago
Running Hackers and Founders, I've come aross a ton of young founders that have gotten seed rounds. And, a ton of them are hiring. I think one reason for the trend is that a number of rich people have soured on the idea of paying someone at BigCo finance to manage their money for them in the stock market. A lot of portfolio's have recovered most of the losses from the past 2 years of stock market craziness, and a lot of them are seeing the benefit of diversifying their investments with angel investing. Multiply that trend times 500 to 5000 millionaires in Silicon Valley, and you have a sellers market in angel investing. That is, there are a lot of angel investors looking for startups to invest in early.

by hristov 16y ago

pg 16y ago

It's clearly not just YC. I'm not sure what's happening. It could be the leading edge of a very uneven recovery. It could be a secular trend of more interest in investing in startups; i.e. a recovery from the previous crash. Or it could be due to the super-angels, who are more aggressive in early stage deals than VCs.

iamelgringo 16y ago

Running Hackers and Founders, I've come aross a ton of young founders that have gotten seed rounds. And, a ton of them are hiring. I think one reason for the trend is that a number of rich people have soured on the idea of paying someone at BigCo finance to manage their money for them in the stock market. A lot of portfolio's have recovered most of the losses from the past 2 years of stock market craziness, and a lot of them are seeing the benefit of diversifying their investments with angel investing. Multiply that trend times 500 to 5000 millionaires in Silicon Valley, and you have a sellers market in angel investing. That is, there are a lot of angel investors looking for startups to invest in early.