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The clever thing about this is that Yuri doesn't have any of the due-diligence costs of Ron Conway : He's outsourced it all. OTOH, maybe/probably Ron Conway ac
by mdda 16y ago
The clever thing about this is that Yuri doesn't have any of the due-diligence costs of Ron Conway : He's outsourced it all.
OTOH, maybe/probably Ron Conway actually enjoys the thrill of the hunt for new exciting stuff, so he doesn't consider it a particular cost.
Right now, according to the article, YC (pg) is happy about the situation : it improves their brand, helps entrepreneurs, etc. But I'm sure that they'll realize that Yuri just got in at a better valuation (on average) than they did, but they're doing all the work. Of course, they probably already have realized this, but they don't have many other options now - other than inserting 'poison pill' anti-freeloader terms into their deals...
- schwabacher 16y agoWhy is he in at a better valuation than YC? From what I read it seemed like he loans 150k for an option to be repayed in stock at whatever valuation they take their first round of funding at? YC's 30k goes in at somthing like a 0.5 million valuation, so i would assume the rounds most of these companies are taking are higher than that?
- mdda 16y agoMea Culpa - you're absolutely right on the valuation side. I think that the majority of value in a YC investment is not in the actual cash, though. And in some ways, this provides a side-by-side comparison of the difference between a 'pure money' investor and a true 'value added' investor should be getting. Given how (YC) entrepreneur-friendly this is, there must be a whole lot of soul-searching going on at VCs and other angels now : Somehow, the private equity space just got an index investor.
- hristov 16y agoYou are right. No-one gets in at a better valuation than YC. Of course they deserve it, they created the whole phenomenon.