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1) History of working for startups, and in every case, the VCs seriously damaged the startup with bad advice or strings tied to the money, which has left me war
by lzw 16y ago
1) History of working for startups, and in every case, the VCs seriously damaged the startup with bad advice or strings tied to the money, which has left me wary of VCs. Further, I have been to a couple events in the bay area, including a YC sponsored one where I mingled with investors and talked to them about various business ideas. I've not gotten the impression that these people have the first clue. Not talking about PG or the other YC people, but just my general impression of people who represented themselves as working for venture capital firms. (and not angels, angels are a different breed I believe and I've had less contact with them.)
2) There simply is not much need for outside capital, as we have a large angel round worth of our own capital in the bank.
3) Strong impression that there is no chance that YC would take us. My co-founder has zero interest
4) YC is predicated on a certain set of assumptions about the type of business, and the priorities of that business. We don't share some key premises there. Namely, it appears that YC believes in betting it all on a short term, big reward, while we believe that a very quickly growing, profitable business will produce a better return for us, at lower risk.
5) As I mentioned we don't really have a need for outside capital, and the contacts YC would get us would primarily serve the purpose of doing additional rounds. Thus, in my opinion the increased risk of having to adopt a specific outside investors timetable, and operational style, along with the risk of having to follow bad advice, does not seem to be worth it, for money we don't need. While YC doesn't subject us to that risk directly, joining the YC program would be getting on that track....
- rantfoil 16y ago1) Angels and YC can't really even be mentioned in the same sentence as VC's. Totally different goals and alignments. 4) Not true, many counterexamples, most notably Wufoo. Sounds like you're doing just fine on your own, though.
- fookyong 16y agore: (4) - an anecdotal example does not imply intent. Wufoo is a good PR case for YC in that it has contributed to the startup ecosystem a sustainable, profitable company that creates value. It's good to see. However, YC cannot survive on happy thoughts. The fund and LPs need to see big returns for the wheel to keep turning, and growing happy sustainable businesses doesn't move the needle enough. Realistically, YC probably needs to push out a mix of sustainable companies for good ecosystem PR, and a handful of home-runs that keep the LPs happy and the fund financially viable. To say that Wufoo is an "example" of YC's backing of neat sustainable businesses is to see half the picture.
- lzw 16y agoIn an attempt to not be so vague as to be meaningless, it appeared like I was putting words into YCs mouth, which is not what I was intending. It is more simply stated that we have different priorities. As a result of my experience with VCs, I structured our business so as not to need them, and ended up not needing Angels or YC either. No question the market for tech investment has shifted and YC lead the way, and I would say that I like a lot of what I've seen about the way it is going. The lean startup is the way to go for web/software startups these days, and YC is a contributor to that trend.
- adrianwaj 16y agostrings tied to the money, which has left me wary of VCs I am very interested in hearing about those strings, whether in private or public. Impressive karma rate you've got there!