6 ms·

It is good, because Y Combinator is likely a better less exploitative (also read: shrewd/demanding) investor than China would be. Hyper cynically, SV/Valley VC

It is good, because Y Combinator is likely a better less exploitative (also read: shrewd/demanding) investor than China would be. Hyper cynically, SV/Valley VC funds investing in Africa's startup ecosystem is about the best thing that could happen in it -- they are the least ruthless of the sharks (as far as I can see) out there, and the business ocean ocean is full of lots of kinds of sharks.

endisneigh 6y ago
By what basis is YC more likely to be less demanding than an investor in China?
- sudosysgen 6y ago
  Literally none. It has to be considered on a case-by-case basis. There's just a lot of sélective reporting and sometimes even literal lies about the subject (such as the Sri Lanka situation).
- thedogeye 6y ago
  Other than taking 7% of the business YC demands literally nothing of you.
- hardwaresofton 6y ago
  YC is much more likely to bow from moral arguments (with widespread support) and bad press. For example if YC started running reeducation camps (let's imagine they were doing something questionably wrong like forcing people to learn how to run startups well), they'd face blow-back (from the subset of people who are firmly against reeducation camps) that I am firmly sure would cause them to reverse course fairly quickly. As far as the demanding/shrewd/exploitative investor bit: Sri Lanka: - http://www.slguardian.org/2020/06/sri-lankans-feel-humiliated-as-china.html http://www.slguardian.org/2020/06/sri-lankans-feel-humiliate... - https://biznakenya.com/how-china-took-over-sri-lanka-port/ https://biznakenya.com/how-china-took-over-sri-lanka-port/ Greece: - https://apjjf.org/2017/13/Mathews.html https://apjjf.org/2017/13/Mathews.html Ghana: - https://www.dw.com/en/oil-promises-ghanas-dreams-of-black-gold/a-55556389 https://www.dw.com/en/oil-promises-ghanas-dreams-of-black-go... (YT: https://www.youtube.com/watch?v=b58b-BvWEpo https://www.youtube.com/watch?v=b58b-BvWEpo) -- it's quite difficult to find negative coverage of the Ghana deal right now, but this provides some evidence for the idea that some of the promises are not being kept and weren't as beneficial as Ghana may have been lead to believe. Again, depending on how you look at these (which is often a result of where you stand in the global economy), these are just brilliant business moves -- advanced risk analysis and the right convincing of the right people in power and unfortunate conditions for the other side. YC is probably not going to take over a sea port because of back-payment, or similarly a bank that wanted to innovate and develop neo-bank style operations (as an example). In general I think it's safe to say that YC will be more forgiving on the revenue-target/KPI target side.
- cambalache 6y ago
  Racism and ethnocentrism, that is his basis
  - hardwaresofton 6y ago
    Excellent, so we're going straight to personal attacks I guess? Do you have any sources that disprove or show bias in the links to previous deals that I posted[0]? I didn't even do an exhaustive search, these are just cases that I've heard of/seen/read something on until now. It's hard to find the full deal information on the percentage stakes of various VCs by countries in African tech companies, but YC is open about that $125K for 7%[1]. Much of their organization is set up to be as transparent for founders and early stage companies as is possible. They are more forgiving than most other VCs in the US itself, and certainly more than banks in the US. this is a sweet-heart deal, giving entrepreneurs who were previously without access and opportunity an instant million dollar valuation. This is quite the sweetheart deal -- and YC does it's best to help the founders build their businesses very actively with some of the world's leading experts in those areas (again, the expertise you can only get from running something like YC). How can a random investor from just about any other country (it doesn't even have to be China) be a more advantageous partner unless they were essentially positioning to purchase or absorb the company? It'd have to be quite a strategic partner to make this $125K/7% deal not worth it. [0]: https://news.ycombinator.com/item?id=26657009 https://news.ycombinator.com/item?id=26657009 [1]: https://www.ycombinator.com/deal/ https://www.ycombinator.com/deal/
    - cambalache 6y ago
      I really refuse to believe you are a real person acting in good faith. Bur for the sake of your site, the links of your "exhaustive research"(I supppose the first page in some google search) are: 1) An article mentioning how China paid a substantial amount of Euros for a majority holding in the Piraeus port, when the European nations were squeezing Greece. According to Varoufakis, the initial deal was even better for Greece, which China investing a very risky 1.5 billion in greek bonds (essentialy Junk) 2. The second link dont mention China at all, it is just an article about the oil explotaition in Ghana and how it had presumably failed to bring the promised goods to the people in the villages where oil is prospected. Even if true, the promises are made by local politicians, not Chinese bureaucrats. 3) The SriLankan links is about how a journalist feel humilliated because China has been granted the lease of a SriLankan port after lendings up to 5 billion dollars have gone unpaid. So these are the kind of links you are bringing to the table, multibillion dollar deals in China get some leases, and you are compariung them with 125k USD for 7% of the company. Last time I checked China does not own 7% of Greece, Sri-Lanka or Ghana, so I must conclude you are a dumb person letting his latent racism to take over or you are aware you are acting on bad faith and you just dont care.
imtringued 6y ago
It is good because Y Combinator increases the number of options available to African founders but you cannot make a blanket statement about what is less exploitative. Only the founders themselves can make that decision.
- hardwaresofton 6y ago
  > It is good, because Y Combinator is likely a better less exploitative (also read: shrewd/demanding) investor than China would be. Did you miss the word "likely"? Please show me the evidence that Y Combinator is unlikely to be less exploitative and I'll be happy to retract my comment. Founder's feelings have nothing to do with it, feelings can go any which way, but past dealings where facts are revealed do not lie. The facts on China's deal making around the world have shown them to be shrewd negotiators and especially effective when making deals with less resourced countries (and normally gaining some strategic piece of infrastructure/land as a result). It's not that other people didn't do this (other countries have absolutely done this), but my comment was about another major recent investor in Africa -- China. It's not a certainty that they will be particularly exploitative/shrewd/demanding this to African founders (though there is already evidence of some other industries where the recipients of grant money were less than thrilled), but I view that outcome as more likely because YCombinator has no such record at all. Are you positing that even with the past behavior the probability is still 50/50 between the two? YCombinator's terms are very forgiving -- obviously there's some conversion here in terms of deal size and outcomes/pieces involved (YC is a very narrowly focused organization in comparison to most VCs). 125K for a 7% slice of what could be 0 is not a deal you're going to get from a random nation or bank (no matter where they are).
  - endisneigh 6y ago
    > Did you miss the word "likely"? Please show me the evidence that Y Combinator is unlikely to be less exploitative and I'll be happy to retract my comment. People cannot prove a negative or the "unlikeliness" of something. Comparing multi-billion infrastructure deals with an accelerator is ridiculous to say the least. You're seriously drinking the kool-aid. Y Combinator isn't really that unique in what they give you, Tech Stars, 500, Imagine K12 (which is now a part of YComb, but before wasn't and had effectively the same deal), AngelPad and others have very similar deals to Y Combinator. Not to mention in China they have programs (such as Chinaccelerator) very similar to Y Combinator that are - you guessed it - almost the same deal (6% equity for $100K). I personally think Y Combinator is the best accelerator given its location and alumni, but let's not exaggerate. I doubt any of these accelerators exploit any of their alumni. Accelerators and Series funding are not the same at all.

endisneigh 6y ago

By what basis is YC more likely to be less demanding than an investor in China?

sudosysgen 6y ago
Literally none. It has to be considered on a case-by-case basis. There's just a lot of sélective reporting and sometimes even literal lies about the subject (such as the Sri Lanka situation).
thedogeye 6y ago
Other than taking 7% of the business YC demands literally nothing of you.
hardwaresofton 6y ago
YC is much more likely to bow from moral arguments (with widespread support) and bad press. For example if YC started running reeducation camps (let's imagine they were doing something questionably wrong like forcing people to learn how to run startups well), they'd face blow-back (from the subset of people who are firmly against reeducation camps) that I am firmly sure would cause them to reverse course fairly quickly. As far as the demanding/shrewd/exploitative investor bit: Sri Lanka: - http://www.slguardian.org/2020/06/sri-lankans-feel-humiliated-as-china.html http://www.slguardian.org/2020/06/sri-lankans-feel-humiliate... - https://biznakenya.com/how-china-took-over-sri-lanka-port/ https://biznakenya.com/how-china-took-over-sri-lanka-port/ Greece: - https://apjjf.org/2017/13/Mathews.html https://apjjf.org/2017/13/Mathews.html Ghana: - https://www.dw.com/en/oil-promises-ghanas-dreams-of-black-gold/a-55556389 https://www.dw.com/en/oil-promises-ghanas-dreams-of-black-go... (YT: https://www.youtube.com/watch?v=b58b-BvWEpo https://www.youtube.com/watch?v=b58b-BvWEpo) -- it's quite difficult to find negative coverage of the Ghana deal right now, but this provides some evidence for the idea that some of the promises are not being kept and weren't as beneficial as Ghana may have been lead to believe. Again, depending on how you look at these (which is often a result of where you stand in the global economy), these are just brilliant business moves -- advanced risk analysis and the right convincing of the right people in power and unfortunate conditions for the other side. YC is probably not going to take over a sea port because of back-payment, or similarly a bank that wanted to innovate and develop neo-bank style operations (as an example). In general I think it's safe to say that YC will be more forgiving on the revenue-target/KPI target side.
cambalache 6y ago
Racism and ethnocentrism, that is his basis
- hardwaresofton 6y ago
  Excellent, so we're going straight to personal attacks I guess? Do you have any sources that disprove or show bias in the links to previous deals that I posted[0]? I didn't even do an exhaustive search, these are just cases that I've heard of/seen/read something on until now. It's hard to find the full deal information on the percentage stakes of various VCs by countries in African tech companies, but YC is open about that $125K for 7%[1]. Much of their organization is set up to be as transparent for founders and early stage companies as is possible. They are more forgiving than most other VCs in the US itself, and certainly more than banks in the US. this is a sweet-heart deal, giving entrepreneurs who were previously without access and opportunity an instant million dollar valuation. This is quite the sweetheart deal -- and YC does it's best to help the founders build their businesses very actively with some of the world's leading experts in those areas (again, the expertise you can only get from running something like YC). How can a random investor from just about any other country (it doesn't even have to be China) be a more advantageous partner unless they were essentially positioning to purchase or absorb the company? It'd have to be quite a strategic partner to make this $125K/7% deal not worth it. [0]: https://news.ycombinator.com/item?id=26657009 https://news.ycombinator.com/item?id=26657009 [1]: https://www.ycombinator.com/deal/ https://www.ycombinator.com/deal/
  - cambalache 6y ago
    I really refuse to believe you are a real person acting in good faith. Bur for the sake of your site, the links of your "exhaustive research"(I supppose the first page in some google search) are: 1) An article mentioning how China paid a substantial amount of Euros for a majority holding in the Piraeus port, when the European nations were squeezing Greece. According to Varoufakis, the initial deal was even better for Greece, which China investing a very risky 1.5 billion in greek bonds (essentialy Junk) 2. The second link dont mention China at all, it is just an article about the oil explotaition in Ghana and how it had presumably failed to bring the promised goods to the people in the villages where oil is prospected. Even if true, the promises are made by local politicians, not Chinese bureaucrats. 3) The SriLankan links is about how a journalist feel humilliated because China has been granted the lease of a SriLankan port after lendings up to 5 billion dollars have gone unpaid. So these are the kind of links you are bringing to the table, multibillion dollar deals in China get some leases, and you are compariung them with 125k USD for 7% of the company. Last time I checked China does not own 7% of Greece, Sri-Lanka or Ghana, so I must conclude you are a dumb person letting his latent racism to take over or you are aware you are acting on bad faith and you just dont care.

imtringued 6y ago

It is good because Y Combinator increases the number of options available to African founders but you cannot make a blanket statement about what is less exploitative. Only the founders themselves can make that decision.

hardwaresofton 6y ago
> It is good, because Y Combinator is likely a better less exploitative (also read: shrewd/demanding) investor than China would be. Did you miss the word "likely"? Please show me the evidence that Y Combinator is unlikely to be less exploitative and I'll be happy to retract my comment. Founder's feelings have nothing to do with it, feelings can go any which way, but past dealings where facts are revealed do not lie. The facts on China's deal making around the world have shown them to be shrewd negotiators and especially effective when making deals with less resourced countries (and normally gaining some strategic piece of infrastructure/land as a result). It's not that other people didn't do this (other countries have absolutely done this), but my comment was about another major recent investor in Africa -- China. It's not a certainty that they will be particularly exploitative/shrewd/demanding this to African founders (though there is already evidence of some other industries where the recipients of grant money were less than thrilled), but I view that outcome as more likely because YCombinator has no such record at all. Are you positing that even with the past behavior the probability is still 50/50 between the two? YCombinator's terms are very forgiving -- obviously there's some conversion here in terms of deal size and outcomes/pieces involved (YC is a very narrowly focused organization in comparison to most VCs). 125K for a 7% slice of what could be 0 is not a deal you're going to get from a random nation or bank (no matter where they are).
- endisneigh 6y ago
  > Did you miss the word "likely"? Please show me the evidence that Y Combinator is unlikely to be less exploitative and I'll be happy to retract my comment. People cannot prove a negative or the "unlikeliness" of something. Comparing multi-billion infrastructure deals with an accelerator is ridiculous to say the least. You're seriously drinking the kool-aid. Y Combinator isn't really that unique in what they give you, Tech Stars, 500, Imagine K12 (which is now a part of YComb, but before wasn't and had effectively the same deal), AngelPad and others have very similar deals to Y Combinator. Not to mention in China they have programs (such as Chinaccelerator) very similar to Y Combinator that are - you guessed it - almost the same deal (6% equity for $100K). I personally think Y Combinator is the best accelerator given its location and alumni, but let's not exaggerate. I doubt any of these accelerators exploit any of their alumni. Accelerators and Series funding are not the same at all.