3 ms·

It came up in a time when raising money without connections was hard-to-impossible and there was a lot of young talent eager to take a swing at the startup game

It came up in a time when raising money without connections was hard-to-impossible and there was a lot of young talent eager to take a swing at the startup game. Y Combinator had the reputation and credibility instantly (as opposed to other, mostly undistinguished, incubators) so it could take equity at extremely advantageous valuations-- justifiably, because just being able to say you're YC improves the value of your company by at least 1.1x (probably 1.5-2x). The problem right now is that it seems to be a "feeder school" for traditional investment, and it won't be able to replace VC outright. YC is an impressive and commendable project, but its value is prestige and it's hard to scale without losing it.

Harj 14y ago
The problem right now is that it seems to be a "feeder school" for traditional investment, and it won't be able to replace VC outright. Why is this a problem? The intention was never to replace VC outright, YC and VC both play different and important roles.
- nodemaker 14y ago
  "The current VC-funded startup scene, which I’ve affectionately started calling “VC-istan”, is– not to be soft with it– a total waste of time for most of the people involved" "the VC’s stake gives them control. It gives them board seats, influence over senior management, and the opportunity to hand out a few executive positions to their children or to people whom they owe favors" http://michaelochurch.wordpress.com/2012/07/08/dont-waste-your-time-in-crappy-startup-jobs/ http://michaelochurch.wordpress.com/2012/07/08/dont-waste-yo...