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"When it invests in its companies, Y Combinator values them at US$1.7 million, of which each founding team owns $1.6 million. This implies that founders must ea
by diego 12y ago
"When it invests in its companies, Y Combinator values them at US$1.7 million, of which each founding team owns $1.6 million. This implies that founders must earn substantially more than $100,000 per year"
I have no idea how/why the author makes that leap.
- aashaykumar92 12y agoYeah I saw that as a pretty glaring mistake too. I'm guessing he thinks that because the founding team is valued at $1.7M, they actually get $1.6M to spend but I can't believe that to be true at all. From what I know, YC companies receive $120K to spend.
- jiggy2011 12y agoI thought YC used convertible notes?
- bri3d 12y agoYC uses this, as of recently: http://ycombinator.com/safe/ http://ycombinator.com/safe/ Previously they did use convertible notes, I believe.
- theduffman 12y agoThanks - I clarified it so that it makes clear that this is talking about equity and not cash. The idea is that YC must make a large return on their $120k and so your $1.6m will end up being worth a lot more than that too - eventually. This is rough because it depends what financing device they use.