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What is a typical reason people don't want to raise money? My general advice is to apply if you want your startup to succeed.

tptacek 12y ago
Control over destiny (ie not wanting a board to report to), already have easy path to revenue, growth options other than "all in on best hockey stick bet we can find within 6 months", work/life balance, long term outlook (being for instance in a business you want to spend 20 years in, rather than 4), obvs. huge distraction of fundraising, elimination of a whole class of success outcomes for the company, not having a backstory that will secure good terms and/or good investors. Different of these things for different companies, of course. Re: your second sentence: -.- I like YC! But come on.
- ivankirigin 12y ago
  My case specific advice can differ. My general advice without knowing the context is to apply. I didn't mean it is for everyone. Some of those reasons to not raise after YC would exclude taking money from YC at all. They are still investors that expect a return. Let me give an example that sounds crazy to normal people. If you're only going to make $1M a year and won't ever sell your company, you shouldn't bother taking external funding from investors that expect a strong return.
  - tptacek 12y ago
    I agree! I'll go you one further: I don't have a lot of sympathy for people who complain about how investors make it hard to run a slow-burn company, or to build a service that funds itself on subscription fees rather than ads/data. I gave a long list of reasons though because I think there are reasons not to raise even if you're ambitious about growth. It's very clear to me that if you think you might ever raise, YC is a no-brainer. It's pretty clear to me that if you've never run a company before, even if you don't ever plan on raising, YC is a net positive. After that, it's less clear to me --- not that I think it's a bad idea, just that I think it's something you'd have to think about, rather than automatically saying "of course yes yes!".
    - deleted 12y ago
      [deleted]
- boomzilla 12y ago
  Agreed, YC's value is not in the initial funding but the brand name validation + connections + some organizational advices. I think tptacek and patio11 already have all that, plus they probably have enough self funding to run this company for a while. I don't see YC provide much added value here. On the other hand, if it's someone who just arrive to the Bay Area from schools, or someone who's always been with a big company as an engineer, then YC clearly provides a lot of extra values.
  - tptacek 12y ago
    Ok this is fun but to be clear this subthread: not about Starfighter.
bandrami 12y ago
> What is a typical reason people don't want to raise money? Because it literally or at least de facto dilutes your stake in the company? Plenty of people start enterprises so they won't be beholden to others (I did, and fortunately my service doesn't scale at all, so the company doesn't have to either). Any fundraising puts you, as you said, in the go-big-or-go-home rat race, and some people prefer more control over their own destiny than that, and seek sustainable levels of business from the beginning.

tptacek 12y ago

Control over destiny (ie not wanting a board to report to), already have easy path to revenue, growth options other than "all in on best hockey stick bet we can find within 6 months", work/life balance, long term outlook (being for instance in a business you want to spend 20 years in, rather than 4), obvs. huge distraction of fundraising, elimination of a whole class of success outcomes for the company, not having a backstory that will secure good terms and/or good investors. Different of these things for different companies, of course. Re: your second sentence: -.- I like YC! But come on.

ivankirigin 12y ago
My case specific advice can differ. My general advice without knowing the context is to apply. I didn't mean it is for everyone. Some of those reasons to not raise after YC would exclude taking money from YC at all. They are still investors that expect a return. Let me give an example that sounds crazy to normal people. If you're only going to make $1M a year and won't ever sell your company, you shouldn't bother taking external funding from investors that expect a strong return.
- tptacek 12y ago
  I agree! I'll go you one further: I don't have a lot of sympathy for people who complain about how investors make it hard to run a slow-burn company, or to build a service that funds itself on subscription fees rather than ads/data. I gave a long list of reasons though because I think there are reasons not to raise even if you're ambitious about growth. It's very clear to me that if you think you might ever raise, YC is a no-brainer. It's pretty clear to me that if you've never run a company before, even if you don't ever plan on raising, YC is a net positive. After that, it's less clear to me --- not that I think it's a bad idea, just that I think it's something you'd have to think about, rather than automatically saying "of course yes yes!".
  - deleted 12y ago
    [deleted]
boomzilla 12y ago
Agreed, YC's value is not in the initial funding but the brand name validation + connections + some organizational advices. I think tptacek and patio11 already have all that, plus they probably have enough self funding to run this company for a while. I don't see YC provide much added value here. On the other hand, if it's someone who just arrive to the Bay Area from schools, or someone who's always been with a big company as an engineer, then YC clearly provides a lot of extra values.
- tptacek 12y ago
  Ok this is fun but to be clear this subthread: not about Starfighter.

bandrami 12y ago

> What is a typical reason people don't want to raise money? Because it literally or at least de facto dilutes your stake in the company? Plenty of people start enterprises so they won't be beholden to others (I did, and fortunately my service doesn't scale at all, so the company doesn't have to either). Any fundraising puts you, as you said, in the go-big-or-go-home rat race, and some people prefer more control over their own destiny than that, and seek sustainable levels of business from the beginning.