My thoughts exactly. It looks like YC's operating expenses will be around $1M to $1.5M per year, depending on what their overhead is. Paul's explanation (increa

My thoughts exactly. It looks like YC's operating expenses will be around $1M to $1.5M per year, depending on what their overhead is. Paul's explanation (increasing investments by 50%, no special access for Sequoia) doesn't really explain why the deal is for just one year's worth of extra capital unless YC is close to broke or Sequoia has absolutely nothing else to do with their money. Actually there are all kinds of possible explanations but none was given. It is interesting how a press release designed to shine a positive light on both companies can easily have the opposite effect. As far as YC's past performance goes, I don't think you'll get much information about that. The near-term prospects for YC companies being acquired look much worse than they did this time last year. The ones who planned on using tiny classified ads as their sole source of income are probably the worst off. It seems to me that the ones most likely to succeed are going to be the ones that operate more like "lifestyle businesses" that are frequently derided in discussions here. Considering that, it is pretty risky to bet the future of the business on any deals happening soon. Maybe that is why they decided to take $2M now while they can get it on good terms.