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Ugh - only deep pocketed individuals or investment funds can apply. For a second thought they had opened it up FundersClub/Wefunder style where any random perso

Ugh - only deep pocketed individuals or investment funds can apply. For a second thought they had opened it up FundersClub/Wefunder style where any random person could take part. (Or at least accredited investor)

akharris 8y ago
The goal here is to reach investors that can lead series As. Doing that requires a fair amount of capital given that: a) the average A last year was $8m and b) the lead is expected to write a check for the majority of the round. I think that seed rounds are generally a better fit for the types of funds you mentioned. It's possible that these funds will develop over time to be able to lead As. I look forward to that happening and having them participate in YCA.
- soneca 8y ago
  Out of curiosity: on a $8m round, how much is expected for the lead to invest? I would guess ~$2m, but you gave the impression that it would be more about $5m.
  - joshu 8y ago
    VCs are expected by their LPs to get 15-25% ownership. So there is no way for an investor to invest $2m on an $8m round and get to that level of ownership.
  - akharris 8y ago
    Leads will take as much of the round as they can. This is usually at least 51% but often much more.
    - xchaotic 8y ago
      Worth mentioning that given the current cheap money, a lot of the investment is leveraged, on credit or timed. So you don't have to have 2m sitting idle in a bank to lead a round.
      - timavr 8y ago
        As far as I understand VCs(General Partners) don't hold investment money. They just get paid fees and have a mandate from Limit Partners to invest, so when they want to invest, they just call on LPs to transfer the money. I imagine each VC fund has a multitude of LPs and they each manage cash based on their own strategies. The key is that they have enough liquid assets to meet the obligations in a timely manner. Obviously, each fund is set up separately and might have a different structure.
- pazimzadeh 8y ago
  >the lead is expected to write a check for the majority of the round Is that true? In the sample numbers given in the form [https://docs.google.com/forms/d/e/1FAIpQLSeT0G1nuYWUn71cV36oAv3iJ5fvvlSuzmWy0hA51XT5LM8T8Q/viewform https://docs.google.com/forms/d/e/1FAIpQLSeT0G1nuYWUn71cV36o...], the lead doesn't have the majority: Yappy, Total: $20M, Our check: $8M, Yes

akharris 8y ago

The goal here is to reach investors that can lead series As. Doing that requires a fair amount of capital given that: a) the average A last year was $8m and b) the lead is expected to write a check for the majority of the round. I think that seed rounds are generally a better fit for the types of funds you mentioned. It's possible that these funds will develop over time to be able to lead As. I look forward to that happening and having them participate in YCA.

soneca 8y ago
Out of curiosity: on a $8m round, how much is expected for the lead to invest? I would guess ~$2m, but you gave the impression that it would be more about $5m.
- joshu 8y ago
  VCs are expected by their LPs to get 15-25% ownership. So there is no way for an investor to invest $2m on an $8m round and get to that level of ownership.
- akharris 8y ago
  Leads will take as much of the round as they can. This is usually at least 51% but often much more.
  - xchaotic 8y ago
    Worth mentioning that given the current cheap money, a lot of the investment is leveraged, on credit or timed. So you don't have to have 2m sitting idle in a bank to lead a round.
    - timavr 8y ago
      As far as I understand VCs(General Partners) don't hold investment money. They just get paid fees and have a mandate from Limit Partners to invest, so when they want to invest, they just call on LPs to transfer the money. I imagine each VC fund has a multitude of LPs and they each manage cash based on their own strategies. The key is that they have enough liquid assets to meet the obligations in a timely manner. Obviously, each fund is set up separately and might have a different structure.
pazimzadeh 8y ago
>the lead is expected to write a check for the majority of the round Is that true? In the sample numbers given in the form [https://docs.google.com/forms/d/e/1FAIpQLSeT0G1nuYWUn71cV36oAv3iJ5fvvlSuzmWy0hA51XT5LM8T8Q/viewform https://docs.google.com/forms/d/e/1FAIpQLSeT0G1nuYWUn71cV36o...], the lead doesn't have the majority: Yappy, Total: $20M, Our check: $8M, Yes