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I wonder, has YCombinator considered creating one of their own? The number of portfolio companies (it never occurred to me until just now how possessive that te

I wonder, has YCombinator considered creating one of their own? The number of portfolio companies (it never occurred to me until just now how possessive that terminology is) by now must be quite large so there would be a wide variety to choose from and there are probably accredited investors that would be willing to piggyback on the YC certification mechanism and let the founders cash out a little bit. In fact, if the markets became liquid enough you might be able to skip the whole "round" feature of entrepreneurial finance all together and just release shares into the marketplace as needed on a week by week basis. There are, of course, a bucketful of practical problems, and a truck-full of legal problems (the kind that get you in jail for violating securities laws) but in principle it could be worthwhile to do. I suppose if you take that thinking to the logical extreme than any random small business could bring shares to market and the entrepreneur and investors can decide through the market mechanism whether they can deal. That would be an interesting world to study finance in.

eru 17y ago
Perhaps if your startup A is legally owned by an offshore company B in your possession. Being in a suitable juristdiction, B could then sell small chunks of A. Would that be even remotely feasible?
baguasquirrel 17y ago
Are you sure we could skip the "round" feature of entrepreneurial finance? It is a classic problem in market economics: whenever you deal with low volume, unique items, you won't have enough information to set a fair price. Market economics don't really work until you have a real market around a single item, whether it be pork bellies or Google stock. More broadly, anytime the economic stakes of a transaction goes up, you'll often have the whole bargaining/negotiations spiel (e.g. cars and Oriental carpets). But the cause in that case is due to the cost efficiency of paying professional negotiators to extract more money out of the average consumer.

eru 17y ago

Perhaps if your startup A is legally owned by an offshore company B in your possession. Being in a suitable juristdiction, B could then sell small chunks of A. Would that be even remotely feasible?

baguasquirrel 17y ago

Are you sure we could skip the "round" feature of entrepreneurial finance? It is a classic problem in market economics: whenever you deal with low volume, unique items, you won't have enough information to set a fair price. Market economics don't really work until you have a real market around a single item, whether it be pork bellies or Google stock. More broadly, anytime the economic stakes of a transaction goes up, you'll often have the whole bargaining/negotiations spiel (e.g. cars and Oriental carpets). But the cause in that case is due to the cost efficiency of paying professional negotiators to extract more money out of the average consumer.