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"You could say that giving up 6% for $25k is a bad deal, that it values the business at less than $500k" I'll take it further. This is a good deal without the

"You could say that giving up 6% for $25k is a bad deal, that it values the business at less than $500k" I'll take it further. This is a good deal without the mentoring, although I can't imagine anyone finding your startup valuable without you taking good mentoring. Who is the kook that thinks a startup with no finished product, no users, certainly no "customers", so clearly no proven biz model, is even worth $500k? Does Sarah Lacy have any first hand experience at the helm of a start-up? Based on her opinion I can't imagine so. As a person that has been doing startups for 20+ years, I can say its a no-brainer to give up 6% for a little cash and proven leadership.

jhancock 17y ago
I'll add two more data points to 6% being a reasonably small amount. 1 - I had a great mentor years ago. His software company, which is still running strong for 20 years, gave 5% to each of several key employees (they had good salaries as well). He thought it a no-brainer and his success shows it. 2 - I had an investor in '98; things went sideways. The investor received both IT product/services from my startup plus 5% of my company in return for carrying my costs that year. When it became clear we needed to part ways, I called my old mentor to ask what to do. He told me to let the partner keep the 5% even if I didn't have to (I didn't and didn't even have to fight about it). He told me it was a small amount, it would get diluted over further investments and if those further investments never materialized, it meant the company is dying so the 5% is worthless anyway.
moe 17y ago
You could say that giving up 6% for $25k is a bad deal, that it values the business at less than $500k Sounds like one hell of a seed-deal to me. At least mine was much worse than that, I'd be curious to hear about others. The barrier to YC for me personally was the whole relocation to the USA. I understand the reasons for that but can't see myself getting productive work done under such a drastic environmental change. If it wasn't for that I'd have been all over them - 25k for 6% is absolutely a no-brainer in the bootstrap phase.

jhancock 17y ago

I'll add two more data points to 6% being a reasonably small amount. 1 - I had a great mentor years ago. His software company, which is still running strong for 20 years, gave 5% to each of several key employees (they had good salaries as well). He thought it a no-brainer and his success shows it. 2 - I had an investor in '98; things went sideways. The investor received both IT product/services from my startup plus 5% of my company in return for carrying my costs that year. When it became clear we needed to part ways, I called my old mentor to ask what to do. He told me to let the partner keep the 5% even if I didn't have to (I didn't and didn't even have to fight about it). He told me it was a small amount, it would get diluted over further investments and if those further investments never materialized, it meant the company is dying so the 5% is worthless anyway.

moe 17y ago

You could say that giving up 6% for $25k is a bad deal, that it values the business at less than $500k Sounds like one hell of a seed-deal to me. At least mine was much worse than that, I'd be curious to hear about others. The barrier to YC for me personally was the whole relocation to the USA. I understand the reasons for that but can't see myself getting productive work done under such a drastic environmental change. If it wasn't for that I'd have been all over them - 25k for 6% is absolutely a no-brainer in the bootstrap phase.