5 ms·

Holy shit. The word "disruptive" is overused but it's pretty applicable here. Crazy. But is this fair to other angels/investors?

BenSchaechter 16y ago
This is what I was thinking. It might be better for people trying to raise money from other angels who aren't a YC company because the new YC batch now has their boats floated for quite a bit more time.
peteforde 16y ago
A lot of people will hate this, but it's neither unfair nor immoral. There's nothing stopping anyone else from making similar deals, including you. What it does do is turn YC into a market index. Interesting.
- JabavuAdams 16y ago
  > There's nothing stopping anyone else from making similar deals, including you. SEC Accredited Investor Status.
patio11 16y ago
Capitalism happens. plays tiny violin Less sardonically: if YC is so ridiculously superior to other investment models that investing money at these terms is profitable knowing nothing of the actual company invested in, then the system is broken. This is the market's corrective measure, attempting to come up with a better approximation of the true value of early stage startups. Might it discomfit people who made a lot of money when it was broken? shrug
- nostrademons 16y ago
  My first thought is that there must be a ridiculous amount of money floating around in the capital markets right now...
  - nicholasjbs 16y ago
    That might be true, but I don't think this particular news provides much evidence either way. The total amount being invested across all 40 companies is less than many companies' A rounds.
  - patio11 16y ago
    Much like I look at "200,000 visitors! Whoa!" and think it is a big number, and you guys might think "Hmm, perhaps there was something interesting going on that second.", I think we collectively share a borked perception of what constitutes a big amount of capital. $150k is a meaningful amount for an early-stage startup. Multiplied by 40, that is $6 million. $6 million is, seat of the pants calculation, two orders of magnitude lower than 2% of United States VC funding in a typical year. VC funding is three orders of magnitude lower than the amount of outstanding bonds in the US. That is one asset class: there are others. Or, for another visualization: if this investment is one pixel, then the US bond market is a grizzled old neckbeard sporting six monitors at 1024x768. The remainder from that calculation might fit an iPhone, but I don't know the resolution on those off the top of my head. Long story short: there is always a ridiculous amount of money in the capital markets.
    - nostrademons 16y ago
      I wasn't thinking so much about the amount of capital as to the fact that someone is willing to risk it on someone else's judgment. Money managers aren't known for trusting other people with their money; if they were, they'd be their clients. That someone is willing to do this indicates to me that he considers this "play money", a little loss leader he can dangle to get in on much bigger deals later. It's not really the amount of money going into these deals as to amount of money that it suggests is behind them.
      - mdda 16y ago
        All the amount placed into Muni Funds and ETFs is investing on other people's judgement : It's MASSIVE.
    - 16y ago

BenSchaechter 16y ago

This is what I was thinking. It might be better for people trying to raise money from other angels who aren't a YC company because the new YC batch now has their boats floated for quite a bit more time.

peteforde 16y ago

A lot of people will hate this, but it's neither unfair nor immoral. There's nothing stopping anyone else from making similar deals, including you. What it does do is turn YC into a market index. Interesting.

JabavuAdams 16y ago
> There's nothing stopping anyone else from making similar deals, including you. SEC Accredited Investor Status.

patio11 16y ago

Capitalism happens. plays tiny violin Less sardonically: if YC is so ridiculously superior to other investment models that investing money at these terms is profitable knowing nothing of the actual company invested in, then the system is broken. This is the market's corrective measure, attempting to come up with a better approximation of the true value of early stage startups. Might it discomfit people who made a lot of money when it was broken? shrug

nostrademons 16y ago
My first thought is that there must be a ridiculous amount of money floating around in the capital markets right now...
- nicholasjbs 16y ago
  That might be true, but I don't think this particular news provides much evidence either way. The total amount being invested across all 40 companies is less than many companies' A rounds.
- patio11 16y ago
  Much like I look at "200,000 visitors! Whoa!" and think it is a big number, and you guys might think "Hmm, perhaps there was something interesting going on that second.", I think we collectively share a borked perception of what constitutes a big amount of capital. $150k is a meaningful amount for an early-stage startup. Multiplied by 40, that is $6 million. $6 million is, seat of the pants calculation, two orders of magnitude lower than 2% of United States VC funding in a typical year. VC funding is three orders of magnitude lower than the amount of outstanding bonds in the US. That is one asset class: there are others. Or, for another visualization: if this investment is one pixel, then the US bond market is a grizzled old neckbeard sporting six monitors at 1024x768. The remainder from that calculation might fit an iPhone, but I don't know the resolution on those off the top of my head. Long story short: there is always a ridiculous amount of money in the capital markets.
  - nostrademons 16y ago
    I wasn't thinking so much about the amount of capital as to the fact that someone is willing to risk it on someone else's judgment. Money managers aren't known for trusting other people with their money; if they were, they'd be their clients. That someone is willing to do this indicates to me that he considers this "play money", a little loss leader he can dangle to get in on much bigger deals later. It's not really the amount of money going into these deals as to amount of money that it suggests is behind them.
    - mdda 16y ago
      All the amount placed into Muni Funds and ETFs is investing on other people's judgement : It's MASSIVE.
  - 16y ago