4 ms·

Not in my opinion :) If an established entrepreneur like Joshua Schachter starts a company, then I'm going to invest no matter what, but for everyone else...

by paul 16y ago

Not in my opinion :) If an established entrepreneur like Joshua Schachter starts a company, then I'm going to invest no matter what, but for everyone else... Watch the Facebook movie and imagine what would have happened without Sean Parker. (I think Zuck would have lost control of the company) YC provides that same kind of value (minus the drugs and women, unfortunately).

ryanwaggoner 16y ago
This comment is interesting to me. Does this mean you wouldn't invest in a company that YC rejected? Does it mean you wouldn't invest in a company that didn't even apply to YC? Are you going to be angel investing at all now that you've joined YC?
- paul 16y ago
  I still invest in non-YC companies, but there's a much higher bar (e.g. I already know the founders, or they have a lot of traction).
  - d3x 16y ago
    "That said, finding the next Google and buying a 1% stake is my current billion dollar plan :)" Facebook, Google etc.. did not go through incubators and they were not started by "established entrepreneurs". If you are looking for a 1% stake in the next google do you think that your preference toward companies that go through incubators will cause you to miss the next big thing?
    - paul 16y ago
      YC is not an incubator, and nothing like it existed when Google and Facebook were started. As I mentioned in the parent comment, I think the closest match is Sean Parker, and he owns a very nice chunk of Facebook :) There's a very good chance that the next Google or FB will be part of YC, because YC is a smart deal for founders, and therefore it will attract the smart founders, and those are the people likely to start the next Google or FB.
      - thewordpainter 16y ago
        paul - it sounds like you don't like to be the original investor going in with an unknown commodity -- that an accurate assessment? if not YC, what are other filters for you?
      - d3x 16y ago
        "Because YC is a smart deal for founders, and therefore it will attract the smart founders" YC might be a good deal but that does not mean it will attract "the" smart founders. Yes it will and does attract some smart founders but just because you dont want to do YC does not mean you are not smart or that you are less likely to have the next big thing. If anything this "All smart founders will go to YC" attitude is one of the main reasons you are more likely to miss out on the next big thing. Whoever is out there creating the next big thing might not even know that YC exists and if he does there are a plethora of other reasons (life and work related) which may cause him/her to not want to apply. Even if they do apply PG has said his strong suite is not picking who gets in and they pass on good people all the time so you are not only hoping that you see the next big thing but that YC sees them too. All these additional criteria make it less likely that you will find the next big thing IMHO.
        paul 16y ago
        Given that I have finite time and money, I need good heuristics for deciding who to talk to. YC is one very good signal, but obviously not the only one.
joshu 16y ago
wait, you don't provide drugs and women? i was misinformed.
- Alex3917 16y ago
  All the drugs are down the street at the institute of transpersonal psychology. I think Myron and Jean Stolaroff live within biking distance as well.
  - joshu 16y ago
    what is this i don't even
    - Alex3917 16y ago
      You ever read What The Doormouse Said? It's all about how LSD influenced the birth of the Internet. Basically the Stolaroffs introduced all the most important technologists in silicon valley (e.g. Doug Engelbart) to LSD. These folks picked up on the mystical ideas that 'everything is one' and 'we're all connected', and set out to recreate this metaphysical vision using computer hardware. And now YC is building software that runs on this platform. Just goes to show that reality is not only stranger than we suppose, it's stranger than we can suppose.
      - tedjdziuba 16y ago
        Ever read "Just So Stories"? :-)
      - joshu 16y ago
        what's the unicode emoticon for bonghit noises?
        deleted 16y ago
        [deleted]
        mahmud 16y ago
tedjdziuba 16y ago
Well you're only making 10% using YC as your filter.
- vessenes 16y ago
  This is silly, and also mean. The man has put $1mm of his personal money into funding startups. I bet you that almost all of these startups had close to zero revenue. Furthermore, he's politely answering questions in this low-noise, low-traffic forum! I bet almost nobody got that kind of access to funders in 1999. Secondly, if you actually parsed through the article, you're considering book value of his un-exited investments to be $0. Do you have any investments like this you've made? I might be interested in taking them off your hands for an _excellent_ price compared to their $0 value.
  - tedjdziuba 16y ago
    Angel investing is not altruism, it's business. I don't do angel investing because I'm not comfortable with the risk profile, and to hear that a popular angel is only making 10% reaffirms my analysis.
    - vessenes 16y ago
      While investing is business, the blog post is definitely altruism, which is why I encouraged you to be more polite. I re-read the article to make sure my second point also holds: the 10% (over three years, so really more like 3% if you are looking at IRR) is only calculated on actual current exits. About half his portfolio is still indeterminate. Barring seriously weird circumstances, he will do very well overall on this crop of investments, especially considering that he started in 2006. That said, keep on with your current strategy. Everyone has a place.
      - joshklein 16y ago
        "Only" made 10%, and starting in 2006 and proceeding directly through to the world bottoming out? I think the previous commenter you are responding to must have been joking.

by paul 16y ago

ryanwaggoner 16y ago

This comment is interesting to me. Does this mean you wouldn't invest in a company that YC rejected? Does it mean you wouldn't invest in a company that didn't even apply to YC? Are you going to be angel investing at all now that you've joined YC?

paul 16y ago
I still invest in non-YC companies, but there's a much higher bar (e.g. I already know the founders, or they have a lot of traction).
- d3x 16y ago
  "That said, finding the next Google and buying a 1% stake is my current billion dollar plan :)" Facebook, Google etc.. did not go through incubators and they were not started by "established entrepreneurs". If you are looking for a 1% stake in the next google do you think that your preference toward companies that go through incubators will cause you to miss the next big thing?
  - paul 16y ago
    YC is not an incubator, and nothing like it existed when Google and Facebook were started. As I mentioned in the parent comment, I think the closest match is Sean Parker, and he owns a very nice chunk of Facebook :) There's a very good chance that the next Google or FB will be part of YC, because YC is a smart deal for founders, and therefore it will attract the smart founders, and those are the people likely to start the next Google or FB.
    - thewordpainter 16y ago
      paul - it sounds like you don't like to be the original investor going in with an unknown commodity -- that an accurate assessment? if not YC, what are other filters for you?
    - d3x 16y ago
      "Because YC is a smart deal for founders, and therefore it will attract the smart founders" YC might be a good deal but that does not mean it will attract "the" smart founders. Yes it will and does attract some smart founders but just because you dont want to do YC does not mean you are not smart or that you are less likely to have the next big thing. If anything this "All smart founders will go to YC" attitude is one of the main reasons you are more likely to miss out on the next big thing. Whoever is out there creating the next big thing might not even know that YC exists and if he does there are a plethora of other reasons (life and work related) which may cause him/her to not want to apply. Even if they do apply PG has said his strong suite is not picking who gets in and they pass on good people all the time so you are not only hoping that you see the next big thing but that YC sees them too. All these additional criteria make it less likely that you will find the next big thing IMHO.
      - paul 16y ago
        Given that I have finite time and money, I need good heuristics for deciding who to talk to. YC is one very good signal, but obviously not the only one.

joshu 16y ago

wait, you don't provide drugs and women? i was misinformed.

Alex3917 16y ago
All the drugs are down the street at the institute of transpersonal psychology. I think Myron and Jean Stolaroff live within biking distance as well.
- joshu 16y ago
  what is this i don't even
  - Alex3917 16y ago
    You ever read What The Doormouse Said? It's all about how LSD influenced the birth of the Internet. Basically the Stolaroffs introduced all the most important technologists in silicon valley (e.g. Doug Engelbart) to LSD. These folks picked up on the mystical ideas that 'everything is one' and 'we're all connected', and set out to recreate this metaphysical vision using computer hardware. And now YC is building software that runs on this platform. Just goes to show that reality is not only stranger than we suppose, it's stranger than we can suppose.
    - tedjdziuba 16y ago
      Ever read "Just So Stories"? :-)
    - joshu 16y ago
      what's the unicode emoticon for bonghit noises?
      - deleted 16y ago
        [deleted]
      - mahmud 16y ago

tedjdziuba 16y ago

Well you're only making 10% using YC as your filter.

vessenes 16y ago
This is silly, and also mean. The man has put $1mm of his personal money into funding startups. I bet you that almost all of these startups had close to zero revenue. Furthermore, he's politely answering questions in this low-noise, low-traffic forum! I bet almost nobody got that kind of access to funders in 1999. Secondly, if you actually parsed through the article, you're considering book value of his un-exited investments to be $0. Do you have any investments like this you've made? I might be interested in taking them off your hands for an _excellent_ price compared to their $0 value.
- tedjdziuba 16y ago
  Angel investing is not altruism, it's business. I don't do angel investing because I'm not comfortable with the risk profile, and to hear that a popular angel is only making 10% reaffirms my analysis.
  - vessenes 16y ago
    While investing is business, the blog post is definitely altruism, which is why I encouraged you to be more polite. I re-read the article to make sure my second point also holds: the 10% (over three years, so really more like 3% if you are looking at IRR) is only calculated on actual current exits. About half his portfolio is still indeterminate. Barring seriously weird circumstances, he will do very well overall on this crop of investments, especially considering that he started in 2006. That said, keep on with your current strategy. Everyone has a place.
    - joshklein 16y ago
      "Only" made 10%, and starting in 2006 and proceeding directly through to the world bottoming out? I think the previous commenter you are responding to must have been joking.