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The best way to look at the uncapped note is like investing in an index fund. Rather than picking and choosing specific companies, the money behind YC VC is be
by corry 13y ago
The best way to look at the uncapped note is like investing in an index fund.
Rather than picking and choosing specific companies, the money behind YC VC is betting that the basket of companies as a whole is going to perform well on aggregate (thanks to power law).
It's really putting faith in the YC selection process / mentoring multiplier as a whole rather than any particular company (which they can do later after demo day).
- Geekette 13y agoExactly, which is why I disagree with the 2nd reason mentioned. I don't see how anyone can perceive a lack of follow-on investment in any startup negatively, when it is widely known that each participating firm only plans to invest in some, not all startups in a batch.
- jules 13y agoYou really don't see how somebody can perceive a lack of follow-on investment negatively, when an entity that has more knowledge of said startups than yourself invests extra in some startups but not all?
- Geekette 13y agoNo. Especially not when that entity typically invests only in a fixed number of startups per batch, subject to certain criteria such as addressing specific sectors of interest to the investing firm.