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* YC gets: - $2M more to invest in startups (more money can't hurt and they clearly enjoy what they do) - Sequoia investing in YC makes YC that much more trus
by ajju 18y ago
* YC gets:
- $2M more to invest in startups (more money can't hurt and they clearly enjoy what they do)
- Sequoia investing in YC makes YC that much more trustworthy in the eyes of a lot of potential investees and potential acquirers of their startups. Also YC's reach in terms of potential acquirers and potential round 2 investors probably increases.
- It gets YC startups almost all the advantages of having Sequoia as an investor without the dilution of a large Sequoia investment (eg: opens a lot of doors for the YC startups to get their products in the marketplace.)
* In return for $2M, Sequoia gets:
- YC acting as a filter / very high quality pipeline for them
- Early access to YC deals (though not exclusive)
- Most likely, great returns on the $2M itself in the long term.
- dbul 18y agoGreat returns because the market is down now and will go up in the next 4 years. If you think about this in relation to the stock market it makes perfect sense. People are investing now because they think the bad times are over (even if they aren't, it is still not a bad time to start investing in something that will take 3 or 4 years to mature like a startup). So both YC and Sequoia win because the valuation of the startup whether it is public or not will be greater in just a matter of years. More small risk, much greater potential return.
- pg 18y agoIt gets YC startups almost all the advantages of having Sequoia as an investor without the dilution of a large Sequoia investment (eg: opens a lot of doors for the YC startups to get their products in the marketplace.) I want to emphasize that this one isn't true. We're not claiming any such advantage. Sequoia won't be a direct investor in these startups.
- ajju 18y agoKudos for ensuring "truth-in-advertising" even when it's someone else (me) doing the advertising for you :)