3 ms·

Happy to honestly answer any brutal questions you have!

monetus 4y ago
With the market conditions right now, have any ideas about how it could be better? It sounds like structural critiques; like a smaller, tighter community that onboards with better incentives, enables more efficient engagement with the alumni and batch would be a big gain. And importantly, like ycombinator could show more flexibility and interest in the batch. That sounds like a smaller network overall though, with less success stories to tout. If they have a better 'batting average' so to speak, though, that would help the investor environment. How does it affect their income and social lives, balancing it all I wonder. Thanks for the article!
- acecreamu 4y ago
  I think they did a right move - making the batch smaller and moving it back in-person. The money amount that was not very attractive at 2021 makes a lot more sense in 2023 as well. As for the community I believe it can only be build relatively strong for <100 people. Hence, smaller niche-specific batches?
ahstilde 4y ago
How much did your company raise in total, and at what valuation? Would it have been able to do so without YC?
- acecreamu 4y ago
  I can say, we didn't see significant uplift at Demo Day, the highest bump of valuation happened when we got accepted, it's fair to assume we wouldn't get it otherwise. I can't answer your question completely as in the end we decided not to raise and returned the money...
dilippkumar 4y ago
Thanks for sharing this. What’s the strongest counter argument you can make in favor of YC?
- acecreamu 4y ago
  There are a lot of good, even in what I write. The strongest I believe is the early and fully independent support for ideas that received no other recognition yet.
pcthrowaway 4y ago
Do you think YC would make sense for a company that doesn't intend to raise money beyond the YC investment? I have an idea for a b2c product I want to build that has a few paths to revenue (and a possible b2b offshoot), as well as acquisition by FAANG (or FAANG-adjacent). Is there something about taking investment from YC that prevents me from turning around and selling it for $2M after building it out a bit more? Alternately, as a solo founder, if I got to a point of $10K MRR I'd be happy to just keep doing what I'm doing, but I guess I'd have an obligation to continue trying to grow? edit: to clarify, I'd be using the $125K 7% part of the investment without necessarily dipping into the additional $375K in this situation. But maybe I'm not understanding how the MFN provision works
- acecreamu 4y ago
  Any investor would hate this idea, it's a terrible deal for them, and YC are smart enough to get it out of you. The whole business of VC is to sell later at the higher price. If they give you money at val of 5M+ and you sell for 2M - they are in loss.
  - pcthrowaway 4y ago
    It's not val of 5M though? It's ~1.7M IIUC. 7% for 125K, an additional 375K can be invested though, with additional equity attached. Is that not right? edit: Investors are also expecting to take a loss on many of the investments. 2M is one exit option, which still gives them +17% return on investment I know that's not the standard type of exit YC are looking for, and I'm open to growing a bit more, but not as interested in taking additional investments. Final exit could end up being 10M for all I know. I just think this growth at all costs attitude needs to change a bit with the current economy. I'd be happy to take $80K for a 7% investment also, but they have a standard deal which I think perverts the incentives and, frankly, leads to outcomes where they're pushing you to take more investment even if you could just have a sustainable business pulling in 10-30K MRR or something
  - tptacek 4y ago
    The whole business of business is to sell later at a higher price.
ychnthrowaway24 4y ago
What led you to shut down and not continue and pivot?
- acecreamu 4y ago
  Huge % of dilution after going through two accelerators (EF and YC). Would be too much of a burden to drag into a new venture.
  - blast 4y ago
    Didn't you know that when you took the money?
    - acecreamu 4y ago
      When we took the money we were planing to build up the original idea, not to start another one. For the consecutive growth of the original idea it wouldn't be an issue.

With the market conditions right now, have any ideas about how it could be better? It sounds like structural critiques; like a smaller, tighter community that onboards with better incentives, enables more efficient engagement with the alumni and batch would be a big gain. And importantly, like ycombinator could show more flexibility and interest in the batch. That sounds like a smaller network overall though, with less success stories to tout. If they have a better 'batting average' so to speak, though, that would help the investor environment. How does it affect their income and social lives, balancing it all I wonder. Thanks for the article!

acecreamu 4y ago
I think they did a right move - making the batch smaller and moving it back in-person. The money amount that was not very attractive at 2021 makes a lot more sense in 2023 as well. As for the community I believe it can only be build relatively strong for <100 people. Hence, smaller niche-specific batches?

ahstilde 4y ago

How much did your company raise in total, and at what valuation? Would it have been able to do so without YC?

acecreamu 4y ago
I can say, we didn't see significant uplift at Demo Day, the highest bump of valuation happened when we got accepted, it's fair to assume we wouldn't get it otherwise. I can't answer your question completely as in the end we decided not to raise and returned the money...

dilippkumar 4y ago

Thanks for sharing this. What’s the strongest counter argument you can make in favor of YC?

acecreamu 4y ago
There are a lot of good, even in what I write. The strongest I believe is the early and fully independent support for ideas that received no other recognition yet.

pcthrowaway 4y ago

Do you think YC would make sense for a company that doesn't intend to raise money beyond the YC investment? I have an idea for a b2c product I want to build that has a few paths to revenue (and a possible b2b offshoot), as well as acquisition by FAANG (or FAANG-adjacent). Is there something about taking investment from YC that prevents me from turning around and selling it for $2M after building it out a bit more? Alternately, as a solo founder, if I got to a point of $10K MRR I'd be happy to just keep doing what I'm doing, but I guess I'd have an obligation to continue trying to grow? edit: to clarify, I'd be using the $125K 7% part of the investment without necessarily dipping into the additional $375K in this situation. But maybe I'm not understanding how the MFN provision works

acecreamu 4y ago
Any investor would hate this idea, it's a terrible deal for them, and YC are smart enough to get it out of you. The whole business of VC is to sell later at the higher price. If they give you money at val of 5M+ and you sell for 2M - they are in loss.
- pcthrowaway 4y ago
  It's not val of 5M though? It's ~1.7M IIUC. 7% for 125K, an additional 375K can be invested though, with additional equity attached. Is that not right? edit: Investors are also expecting to take a loss on many of the investments. 2M is one exit option, which still gives them +17% return on investment I know that's not the standard type of exit YC are looking for, and I'm open to growing a bit more, but not as interested in taking additional investments. Final exit could end up being 10M for all I know. I just think this growth at all costs attitude needs to change a bit with the current economy. I'd be happy to take $80K for a 7% investment also, but they have a standard deal which I think perverts the incentives and, frankly, leads to outcomes where they're pushing you to take more investment even if you could just have a sustainable business pulling in 10-30K MRR or something
- tptacek 4y ago
  The whole business of business is to sell later at a higher price.

ychnthrowaway24 4y ago

What led you to shut down and not continue and pivot?

acecreamu 4y ago
Huge % of dilution after going through two accelerators (EF and YC). Would be too much of a burden to drag into a new venture.
- blast 4y ago
  Didn't you know that when you took the money?
  - acecreamu 4y ago
    When we took the money we were planing to build up the original idea, not to start another one. For the consecutive growth of the original idea it wouldn't be an issue.