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TL;DR: they take too much equity (“14% of a multi-unicorn is a billion dollars” aka survivorship bias); batches too large (hard to stand out among 400 companies
by tomp 5y ago
TL;DR: they take too much equity (“14% of a multi-unicorn is a billion dollars” aka survivorship bias); batches too large (hard to stand out among 400 companies)
- thebooktocome 5y agoThis is a misstating of the argument. They argue that 10-14% is a much larger stake than three other funding options.
- algo_trader 5y agoWhat are those other funding options? He gives quite a rant, but doesnt mention a specific deal. The Backend link and the Miami incubators dont specify amounts. 14% is high - but that implies that your post-YC was not great. The previous 7% deal is also still available. Overall - he make the usual points, nothing new.
- IshKebab 5y agoThey don't take 14% of unicorns though. They take 14% of essentially worthless companies that have a very small chance of becoming unicorns. That's how investment works; seems weird to call it out.
- rosndo 5y agoThe point is that there is much cheaper money out there.