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We think this is going to be an interesting new way for companies to raise their A rounds. Here to answer any questions people have about it.
by akharris 8y ago
We think this is going to be an interesting new way for companies to raise their A rounds. Here to answer any questions people have about it.
- tosh 8y agoHow does it differ in focus from early stage YC batches?
- repsilat 8y agoFrom TFA, it looks exclusively focussed on fundraising and not at all on starting/growing a business, developing product, dealing with users etc.
- tosh 8y agoHow has the series A stage changed over the last few years?
- tosh 8y agoHow does YC think about signaling issues (in general and specific to YC)?
- akharris 8y agoImportant question. We think signaling is a tricky subject, especially with the number of VCs investing in As. There's a lot to unpack there, which I'll write about in the future. For YC - we're thinking actively how to prevent any signaling. That's why we invest pro-rata in all of our companies in the same way.
- misterbowfinger 8y agoWhat are "signaling issues"? Signaling that you're seeking a series A, or that you're seeking a series A from YC?
- wasd 8y agoI believe the signaling issues are companies which are admitted to YC Series A and those that are not.
- fredophile 8y agoYC typically invests at the seed stage. If YC makes, or doesn't make, a large follow up investment for some companies in series A it sends a signal to other investors about what YC thinks about the company. Since YC has access to information about the company's financials from already being an investor this kind of thing can influence other investors to make, or avoid making, an investment.
- wasd 8y agoI don't believe this is an issue. YC's stance is to always participate in their pro rata. "We exercise YC’s pro rata investing rights in all follow-on priced financing rounds, beginning with a company’s first priced round. At post-money valuations equal to or below $300M, we exercise our rights in all companies where we have a formal pro rata right." From: https://www.ycombinator.com/continuity/ https://www.ycombinator.com/continuity/
- traek 8y agoYes, and per further up in this comment chain the purpose of that is to avoid signaling issues: > For YC - we're thinking actively how to prevent any signaling. That's why we invest pro-rata in all of our companies in the same way.
- acjohnson55 8y agoIs the "signaling" idea mostly about the differential signal that would be sent about companies they didn't invest in, if this automatic policy were not in place? Like, no matter how awesome Company A is, if YC chose to invest a disproportionate amount of money in Company A, then everyone would say, "what's wrong with Company B?"
- simonebrunozzi 8y agoObvious thing to say is: is this limited to YC companies, or can external companies apply too? And if so, what's the "cost" (equity / etc)? Thanks.