5 ms·

Not to suggest that I know better than you what your own thoughts are/will be, but it is possible for this to influence what startups you accent without them ta

by corin_ 16y ago

Not to suggest that I know better than you what your own thoughts are/will be, but it is possible for this to influence what startups you accent without them talking to you about it. For example, maybe there's a startup which couldn't possibly succeed without big initial investment - with a <$20k fund, you wouldn't bet on them doing well, but with an additional $150k available, you might see them as having a much higher chance of success. Sure there are other examples, but basically the fact that it changes the amount of funding available to your startups, it has the potential to change their success, which means that, if you forsee those changes before deciding whether to accept or reject a startup, it could also change your decision.

Wolf_Larsen 16y ago
Shouldn't you be able to communicate any idea for less than $20k? The companies that communicate a good idea well on Demo Day will succeed in getting good funding. The difference between $20k and $150k is "They need to work on communicating their idea" vs. "They can get to work on their implementation".
- lsc 16y ago
  I personally disagree. If, for instance, you are renting out competitively priced infrastructure, you aren't going to get started with $20K, unless you are willing to spend some number of years consulting and rolling the money in to servers (which is what I did; so it /is/ possible; I'm just saying, it's pretty goddamn difficult to get a low-margin, competing on price infrastructure company off the ground with $20K. And really, it's going to be really difficult to get investor interest in such a venture until you have more traction than you can get with that kind of scratch.) If you are going head to head with something like ec2, $170K is probably enough to get you started, I'd think, if you are willing to live cheaply and don't screw up too much. If you count all the contracting money I put in, eh, that's probably in the ballpark, and I am to the point where I can reasonably provide compute units at a competitive price, though my software lags by quite a lot. I mean, you need /some/ scale, though you don't really need as much scale as they say. Of course, if you are a high-margin infrastructure company, and your margins are high enough to re-sell ec2 with a value add software stack, $20K very well might be enough. I'm just saying, $20K doesn't get a lot of hardware
  - robryan 16y ago
    It is interesting because companies that pretty much wouldn't work on YC money would have a much stronger chance with the additional investment. I'm thinking hardware/software combinations like wakemate, which went through YC but I'm sure would have needed additional money to get past a simple prototype.
- endtime 16y ago
  >Shouldn't you be able to communicate any idea for less than $20k? Not if you're making hardware...well, not all hardware, anyway. Was Wakemate able to get off the ground with 20k?
lifestyleigni 16y ago
Even without the additional 150k available, if the start up was successful enough after the 20k of YC funding (like it was previously), they would be able to find funding elsewhere.
pg 16y ago
We often fund startups that couldn't succeed without a much bigger investment than we make. More often than not, in fact. The only case where having the first 150k guaranteed would make a difference would be if we were considering a group that we liked, but we thought other investors would be too timid to fund. E.g. a group doing something insanely risky. But in those cases we always fund them anyway, and count on our own ability to talk the later stage investors around.

by corin_ 16y ago

Wolf_Larsen 16y ago

Shouldn't you be able to communicate any idea for less than $20k? The companies that communicate a good idea well on Demo Day will succeed in getting good funding. The difference between $20k and $150k is "They need to work on communicating their idea" vs. "They can get to work on their implementation".

lsc 16y ago
I personally disagree. If, for instance, you are renting out competitively priced infrastructure, you aren't going to get started with $20K, unless you are willing to spend some number of years consulting and rolling the money in to servers (which is what I did; so it /is/ possible; I'm just saying, it's pretty goddamn difficult to get a low-margin, competing on price infrastructure company off the ground with $20K. And really, it's going to be really difficult to get investor interest in such a venture until you have more traction than you can get with that kind of scratch.) If you are going head to head with something like ec2, $170K is probably enough to get you started, I'd think, if you are willing to live cheaply and don't screw up too much. If you count all the contracting money I put in, eh, that's probably in the ballpark, and I am to the point where I can reasonably provide compute units at a competitive price, though my software lags by quite a lot. I mean, you need /some/ scale, though you don't really need as much scale as they say. Of course, if you are a high-margin infrastructure company, and your margins are high enough to re-sell ec2 with a value add software stack, $20K very well might be enough. I'm just saying, $20K doesn't get a lot of hardware
- robryan 16y ago
  It is interesting because companies that pretty much wouldn't work on YC money would have a much stronger chance with the additional investment. I'm thinking hardware/software combinations like wakemate, which went through YC but I'm sure would have needed additional money to get past a simple prototype.
endtime 16y ago
>Shouldn't you be able to communicate any idea for less than $20k? Not if you're making hardware...well, not all hardware, anyway. Was Wakemate able to get off the ground with 20k?

lifestyleigni 16y ago

Even without the additional 150k available, if the start up was successful enough after the 20k of YC funding (like it was previously), they would be able to find funding elsewhere.

pg 16y ago

We often fund startups that couldn't succeed without a much bigger investment than we make. More often than not, in fact. The only case where having the first 150k guaranteed would make a difference would be if we were considering a group that we liked, but we thought other investors would be too timid to fund. E.g. a group doing something insanely risky. But in those cases we always fund them anyway, and count on our own ability to talk the later stage investors around.