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The market is tanking again and interest rates may go up and or continue into next year. YC graduates are expected to present and raise their seed rounds around

by dzink 2y ago

The market is tanking again and interest rates may go up and or continue into next year. YC graduates are expected to present and raise their seed rounds around Demo Day in 3-4 months. Raising any kind of money sets an interest rate that you pay with your equity % to investors (at high interest rates they expect to own more equity as time goes by.) What are the current fundraising terms you guys see for YC startups because the timing looks dicey for this cycle? NVDA just tanked 10% today and with it a whole bunch of AI valuations. Did YC startups from in the 2022 batches see positives or negatives? What is the upside to fundraising in the next few months vs waiting for a better environment? If we have a startup and it’s profitable, does it make sense to apply it to wait?

dang 2y ago
Not only do I not know the answers, I am so devoid of such knowledge that you would find it hilarious. But from my perspective (FWIW) it's all sort of optimizing for the wrong thing. If you want to do a startup, YC is such a force multiplier that none of these details matter in the end. I do know that one reason the YC deal is far larger than it used to be is to give founders resilience against market ups and downs. You get a lot of runway now.
andrewstuart 2y ago
Who cares? Your deepest motivation should be to build something amazing that people want to use, to create a great business, to have fun, to go on a great adventure. If stock market performance plays a major role in your decision to start a business or raise capital then perhaps your motivations might need a rethink.
- dzink 2y ago
  It doesn’t in mine, but it does in the VC’s who are investing in YC startups - making them and their LPs a lot less patient due to increased cost of capital for the whole industry.
- im_down_w_otp 2y ago
  VCs care. The way they make decisions has changed wildly in different ways multiple times within just the last 5 years. There’s a very good argument to be made that they shouldn’t care and that their investment theses should be more stable as well as their criteria, but that’s an academic argument that doesn’t do a whole lot for the founders who have been attempting to fundraise amid those varied VC spasms.
re-thc 2y ago
> What is the upside to fundraising in the next few months vs waiting for a better environment? If we have a startup and it’s profitable, does it make sense to apply it to wait? You make it sound like you have a 100% success rate. A lot of applicants apply multiple times so getting in at a worse rate vs not getting at all, what's the pick?

by dzink 2y ago

dang 2y ago

Not only do I not know the answers, I am so devoid of such knowledge that you would find it hilarious. But from my perspective (FWIW) it's all sort of optimizing for the wrong thing. If you want to do a startup, YC is such a force multiplier that none of these details matter in the end. I do know that one reason the YC deal is far larger than it used to be is to give founders resilience against market ups and downs. You get a lot of runway now.

andrewstuart 2y ago

Who cares? Your deepest motivation should be to build something amazing that people want to use, to create a great business, to have fun, to go on a great adventure. If stock market performance plays a major role in your decision to start a business or raise capital then perhaps your motivations might need a rethink.

dzink 2y ago
It doesn’t in mine, but it does in the VC’s who are investing in YC startups - making them and their LPs a lot less patient due to increased cost of capital for the whole industry.
im_down_w_otp 2y ago
VCs care. The way they make decisions has changed wildly in different ways multiple times within just the last 5 years. There’s a very good argument to be made that they shouldn’t care and that their investment theses should be more stable as well as their criteria, but that’s an academic argument that doesn’t do a whole lot for the founders who have been attempting to fundraise amid those varied VC spasms.

re-thc 2y ago

> What is the upside to fundraising in the next few months vs waiting for a better environment? If we have a startup and it’s profitable, does it make sense to apply it to wait? You make it sound like you have a 100% success rate. A lot of applicants apply multiple times so getting in at a worse rate vs not getting at all, what's the pick?