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Recent events in my personal life have led me to believe you can get "dumb money" with reasonable terms in NYC. So if you just need the dough, it's no problem t

Recent events in my personal life have led me to believe you can get "dumb money" with reasonable terms in NYC. So if you just need the dough, it's no problem these days... any idea and founders with a pulse will do. Get in on it while it lasts...

tptacek 16y ago
The biggest problem with getting money isn't getting the money; it's what strings are attached to the money. People think this is an abstraction. My VC-funded company hired a CEO (who I like) who decided our A-round-funded company was optimally positioned to go head-to-head with Akamai. I saw a board at another company wage a guerilla war against its management team. The threat here is not abstract.
- jon_dahl 16y ago
  Angel funding, on the other hand, generally comes without strings. If you take $1M of convertible debt, you don't have to give up a board seat, special rights, etc. If you do it right, you get some runway and some awesome advisors. That's it. Pros and cons, of course, but VC funding (especially when the VC gets to set the terms) is a world apart from angel funding.
  - tptacek 16y ago
    Isn't that no-strings angel funding predicated on the idea that there's going to be either a round of financing or an exit? I have no problems with angel funding (I'm really not all that familiar with it; no company I've been involved with has taken "angel money"), but I do have concerns about any company model that puts first-time founders on a burn-rate runway. There are less perilous ways to build a business.
    - jon_dahl 16y ago
      Isn't that no-strings angel funding predicated on the idea that there's going to be either a round of financing or an exit? Really depends on the investor. Some angels explicitly want you to go Series A -> Series B -> $100M -> IPO. Others explicitly want to help founders start cool companies. Some are basically mini-VCs, and others are really founder-friendly. So it's just important for a startup to have the right angels, whichever direction you go.
- maxawaytoolong 16y ago
  That is why I added in "reasonable terms." The terms I've in deals lately seen have been very favorable for the founders. Not as loose as an angel round but much better than I've seen for similar deals in the past. As John Dahl hints, a lot of the deals are convertible debt deals. I only mention this because from my immediate perspective it seems easier to raise $100-$500K in NYC than it does to raise $10K from Y Combinator. Which is the better deal? I couldn't tell you.

tptacek 16y ago

The biggest problem with getting money isn't getting the money; it's what strings are attached to the money. People think this is an abstraction. My VC-funded company hired a CEO (who I like) who decided our A-round-funded company was optimally positioned to go head-to-head with Akamai. I saw a board at another company wage a guerilla war against its management team. The threat here is not abstract.

jon_dahl 16y ago
Angel funding, on the other hand, generally comes without strings. If you take $1M of convertible debt, you don't have to give up a board seat, special rights, etc. If you do it right, you get some runway and some awesome advisors. That's it. Pros and cons, of course, but VC funding (especially when the VC gets to set the terms) is a world apart from angel funding.
- tptacek 16y ago
  Isn't that no-strings angel funding predicated on the idea that there's going to be either a round of financing or an exit? I have no problems with angel funding (I'm really not all that familiar with it; no company I've been involved with has taken "angel money"), but I do have concerns about any company model that puts first-time founders on a burn-rate runway. There are less perilous ways to build a business.
  - jon_dahl 16y ago
    Isn't that no-strings angel funding predicated on the idea that there's going to be either a round of financing or an exit? Really depends on the investor. Some angels explicitly want you to go Series A -> Series B -> $100M -> IPO. Others explicitly want to help founders start cool companies. Some are basically mini-VCs, and others are really founder-friendly. So it's just important for a startup to have the right angels, whichever direction you go.
maxawaytoolong 16y ago
That is why I added in "reasonable terms." The terms I've in deals lately seen have been very favorable for the founders. Not as loose as an angel round but much better than I've seen for similar deals in the past. As John Dahl hints, a lot of the deals are convertible debt deals. I only mention this because from my immediate perspective it seems easier to raise $100-$500K in NYC than it does to raise $10K from Y Combinator. Which is the better deal? I couldn't tell you.