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I was thinking of HackFWD though to be fair after a quick Google check they offer you about 70k for a one person, 110k for 2 people, 160k for 3 people in exchan

I was thinking of HackFWD though to be fair after a quick Google check they offer you about 70k for a one person, 110k for 2 people, 160k for 3 people in exchange for 30% equity. [1] https://hackfwd.s3.amazonaws.com/system/documents/4bd586/e2e8b66c7c32000034/hackfwd_offering_overview_download_v1.1__3_.pdf https://hackfwd.s3.amazonaws.com/system/documents/4bd586/e2e... [2] http://hackfwd.com/ http://hackfwd.com/

niggler 14y ago
You should also do the quick calculation: YC originally gave something like 10K for roughly 6%, giving a rough valuation in the 180K range. HackFWD is giving, for two people, 110K for 30% which implies a value of roughly 370K. On the numbers alone the deal isn't as bad as it sounds.
- codesuela 14y ago
  true, but my point is that YC will add WAY more value then the 190K diff.
  - niggler 14y ago
    Do you have numbers / proof of that claim?
    - rdl 14y ago
      The only first-hand data I have is seeing the valuations YC companies raise on their notes, vs. what I consider to be fairly comparable teams (if not companies) from 500 Startups and no incubator. The YC companies are maybe 2x 500 Startups, and 3-4x people from outside the Bay Area. Given that a lot of YC teams weren't bay area insiders when they joined YC, it's a no-brainer. (and I'd consider 500 Startups worthwhile in general as well; I just think YC is better) I think a top FB/Google tech lead who knows investors who leaves to go do a related startup probably doesn't see as much of a bump in valuation from YC as someone who just dropped out of U of Michigan and is living in Ann Arbor, but there are plenty of other reasons why giving up 2-10% to YC is more than worthwhile.
      - niggler 14y ago
        "I think a top FB/Google tech lead who knows investors who leaves to go do a related startup " I suspect there's a strong selection bias in YC and other incubators (take dropbox, for which Drew is an MIT grad), which probably makes my request for numbers somewhat foolhardy.
        rdl 14y ago
        I believe the YC application process is an effective filter, but I don't think it particularly needs to be -- I'd be willing to bet that the marginal admit and marginal reject are close enough in quality that YC and its benefits are a major difference in outcome. (It might be a harder problem than elite college admissions, since while you can pretty readily identify top credentials and signs of failure, successful startups are more frequently hidden behind cosmetic flaws (or personal biases) than successful students are hidden in with C/D students with a bad GPA.) YC has gotten pretty big now relative to a certain part of the startup ecosystem, but look back in 2005-2008 for when YC was smaller, and the success rate of YC companies vs. non-YC companies of that time. It seems pretty good, which warrants the valuations.
    - codesuela 14y ago
      @niggler, I guess it's kind of hard to provide such a number but let's see: - Just entering YC will generate promo for your product, it will put you in-front of the eyes of thousand of tech focused people. - Free job postings on HN - Incredible alumni network of actually successful founders - Demo day will be covered by major news outlets and attended by lots of investors - 150k of convertible credit [1] - Only 10 percent don't raise any money after graduating [1] - 90% raise an average of 700k USD [1] - "The average valuation of Y Combinator-backed companies, according to co-founder Paul Graham, is $45.2 million." [2] Looks way more valuable then 170k of dumb money to me. [1] http://blogs.wsj.com/venturecapital/2011/02/01/y-combinators-paul-graham-on-the-150k-per-start-up-offer/ http://blogs.wsj.com/venturecapital/2011/02/01/y-combinators... [2] https://en.wikipedia.org/wiki/Y_Combinator_(company) https://en.wikipedia.org/wiki/Y_Combinator_(company) EDIT: I'm not saying HackFWD is dumb money, with regards to money smartness they are definitely better then most other European accelerators. My original (GP) statement is not about HackFWD but accelerators in general.
      - niggler 14y ago
        You're still assuming that HackFWD is dumb money. From what I can tell, they have expertise in European markets that probably surpasses YC and they give a much longer runway to develop without funding pressures (full year as opposed to a few months). There's no constant pressure to prepare for demo day. I'm not saying there isn't a value-add to YC, but rather that its bad to assume other programs don't have value.
        rdl 14y ago
        There's an argument to be made that longer runways don't help. YC arguably made a mistake for many companies by going from 20k to 20+150k, because with 170k you can waste a lot of time and also there's a lot left to fight over if it fails early. This is mostly why YC went to 20+80k now. I think the right thing is probably 50-100k plus a low-hassle way to get another 250-300k, and then 1-2mm. So, something like YC plus non-stupid early investors and something like a raise shortly after Demo Day. (If I had a 10-20mm fund, I'd love to fill in the 250-300k gap)
  - rdl 14y ago
    Yeah; I covered this in a review of YC on Quora (open link, no login required): http://qr.ae/TAGtX http://qr.ae/TAGtX YC is basically 6-7% now, and bumps your valuation by (what appears to be) >100%, so it's a no-brainer for that reason.
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niggler 14y ago

You should also do the quick calculation: YC originally gave something like 10K for roughly 6%, giving a rough valuation in the 180K range. HackFWD is giving, for two people, 110K for 30% which implies a value of roughly 370K. On the numbers alone the deal isn't as bad as it sounds.

codesuela 14y ago
true, but my point is that YC will add WAY more value then the 190K diff.
- niggler 14y ago
  Do you have numbers / proof of that claim?
  - rdl 14y ago
    The only first-hand data I have is seeing the valuations YC companies raise on their notes, vs. what I consider to be fairly comparable teams (if not companies) from 500 Startups and no incubator. The YC companies are maybe 2x 500 Startups, and 3-4x people from outside the Bay Area. Given that a lot of YC teams weren't bay area insiders when they joined YC, it's a no-brainer. (and I'd consider 500 Startups worthwhile in general as well; I just think YC is better) I think a top FB/Google tech lead who knows investors who leaves to go do a related startup probably doesn't see as much of a bump in valuation from YC as someone who just dropped out of U of Michigan and is living in Ann Arbor, but there are plenty of other reasons why giving up 2-10% to YC is more than worthwhile.
    - niggler 14y ago
      "I think a top FB/Google tech lead who knows investors who leaves to go do a related startup " I suspect there's a strong selection bias in YC and other incubators (take dropbox, for which Drew is an MIT grad), which probably makes my request for numbers somewhat foolhardy.
      - rdl 14y ago
        I believe the YC application process is an effective filter, but I don't think it particularly needs to be -- I'd be willing to bet that the marginal admit and marginal reject are close enough in quality that YC and its benefits are a major difference in outcome. (It might be a harder problem than elite college admissions, since while you can pretty readily identify top credentials and signs of failure, successful startups are more frequently hidden behind cosmetic flaws (or personal biases) than successful students are hidden in with C/D students with a bad GPA.) YC has gotten pretty big now relative to a certain part of the startup ecosystem, but look back in 2005-2008 for when YC was smaller, and the success rate of YC companies vs. non-YC companies of that time. It seems pretty good, which warrants the valuations.
  - codesuela 14y ago
    @niggler, I guess it's kind of hard to provide such a number but let's see: - Just entering YC will generate promo for your product, it will put you in-front of the eyes of thousand of tech focused people. - Free job postings on HN - Incredible alumni network of actually successful founders - Demo day will be covered by major news outlets and attended by lots of investors - 150k of convertible credit [1] - Only 10 percent don't raise any money after graduating [1] - 90% raise an average of 700k USD [1] - "The average valuation of Y Combinator-backed companies, according to co-founder Paul Graham, is $45.2 million." [2] Looks way more valuable then 170k of dumb money to me. [1] http://blogs.wsj.com/venturecapital/2011/02/01/y-combinators-paul-graham-on-the-150k-per-start-up-offer/ http://blogs.wsj.com/venturecapital/2011/02/01/y-combinators... [2] https://en.wikipedia.org/wiki/Y_Combinator_(company) https://en.wikipedia.org/wiki/Y_Combinator_(company) EDIT: I'm not saying HackFWD is dumb money, with regards to money smartness they are definitely better then most other European accelerators. My original (GP) statement is not about HackFWD but accelerators in general.
    - niggler 14y ago
      You're still assuming that HackFWD is dumb money. From what I can tell, they have expertise in European markets that probably surpasses YC and they give a much longer runway to develop without funding pressures (full year as opposed to a few months). There's no constant pressure to prepare for demo day. I'm not saying there isn't a value-add to YC, but rather that its bad to assume other programs don't have value.
      - rdl 14y ago
        There's an argument to be made that longer runways don't help. YC arguably made a mistake for many companies by going from 20k to 20+150k, because with 170k you can waste a lot of time and also there's a lot left to fight over if it fails early. This is mostly why YC went to 20+80k now. I think the right thing is probably 50-100k plus a low-hassle way to get another 250-300k, and then 1-2mm. So, something like YC plus non-stupid early investors and something like a raise shortly after Demo Day. (If I had a 10-20mm fund, I'd love to fill in the 250-300k gap)
- rdl 14y ago
  Yeah; I covered this in a review of YC on Quora (open link, no login required): http://qr.ae/TAGtX http://qr.ae/TAGtX YC is basically 6-7% now, and bumps your valuation by (what appears to be) >100%, so it's a no-brainer for that reason.
- deleted 14y ago
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