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From my experience, you are correct when you say VCs rarely are looking to lift a startup off the ground. Most people I know and startups I have been involved

by mrtron 19y ago

From my experience, you are correct when you say VCs rarely are looking to lift a startup off the ground. Most people I know and startups I have been involved in start off with cash from friends and family. One of the most difficult leaps you take is quitting a paying job and taking a small sum of money and trying things out. VCs definitely want to take an idea/product and scale it like you mentioned. The one thing I would suggest is do you need 500k to start a startup? I would suggest the number is closer to 1/10th of that to survive for a year, at least as an Internet startup. EDIT: To clarify, I meant 1/10th of that to start a company for a year, not to personally survive for a year. There are many necessary costs for a company that shouldn't total more than about that 50k mark, lets call it "servers and shit" costs. I was completely excluding living expenses!

cperciva 19y ago
The one thing I would suggest is do you need 500k to start a startup? I would suggest the number is closer to 1/10th of that to survive for a year, at least as an Internet startup. You need $50k to live for a year? Where are you living? People often forget about how many of their costs don't exist if they're not earning income: Obviously you don't have to pay income taxes any more, but also the cost of commuting disappears, and the cost of food might drop dramatically (depending on where you would eat lunch if you had a paying job). I'd say that YC's $5k + $5k/person funding formula is about right -- $5k is likely to cover startup costs for a company (at least, for the sort of companies YC funds), and $5k should be more than enough to live off of for 3 months.
- ivankirigin 19y ago
  If you're accustomed to an undergrad or grad budget, sure $5K might be enough for 3 months. But not if you have a mortgage, student loans, a car loan, maybe some credit card debt, etc. And rounds of funding can take months to close, so it is more like $5K for 7 months, not 3.
  - cperciva 19y ago
    And rounds of funding can take months to close, so it is more like $5K for 7 months, not 3. Sure -- I'm a bit skeptical about the YC model of providing funding for only 3 months, too. My point was more that for someone accustomed to an undergrad or grad budget (which is probably most people here), $20k for a year is far more reasonable than $50k.
    - imsteve 19y ago
      $20k? Just after my student loans, that leaves me only $6000 for the year to divide up for food, rent, health related, transportation... Even if I move back to Eastern Europe, there's no way.
      - cperciva 19y ago
        You must have some pretty huge student loans if you're paying $14k/year in interest...
        ivankirigin 19y ago
        Total payment of 1160/mo means $160K at 8% for a 30 year term. I'm sure there are many people in that situation.
        mrtron 19y ago
        Some student loan programs have minimum payments enforced after the interest-free period, similar to some credit card payments. So, I would not assume that the payment is entirely interest.
        electric 19y ago
        Interesting. I had brought up the issue of student debt as being one significant impediment to startups happening at the pace that pg had predicted they would.
        imsteve 19y ago

by mrtron 19y ago

cperciva 19y ago

The one thing I would suggest is do you need 500k to start a startup? I would suggest the number is closer to 1/10th of that to survive for a year, at least as an Internet startup. You need $50k to live for a year? Where are you living? People often forget about how many of their costs don't exist if they're not earning income: Obviously you don't have to pay income taxes any more, but also the cost of commuting disappears, and the cost of food might drop dramatically (depending on where you would eat lunch if you had a paying job). I'd say that YC's $5k + $5k/person funding formula is about right -- $5k is likely to cover startup costs for a company (at least, for the sort of companies YC funds), and $5k should be more than enough to live off of for 3 months.

ivankirigin 19y ago
If you're accustomed to an undergrad or grad budget, sure $5K might be enough for 3 months. But not if you have a mortgage, student loans, a car loan, maybe some credit card debt, etc. And rounds of funding can take months to close, so it is more like $5K for 7 months, not 3.
- cperciva 19y ago
  And rounds of funding can take months to close, so it is more like $5K for 7 months, not 3. Sure -- I'm a bit skeptical about the YC model of providing funding for only 3 months, too. My point was more that for someone accustomed to an undergrad or grad budget (which is probably most people here), $20k for a year is far more reasonable than $50k.
  - imsteve 19y ago
    $20k? Just after my student loans, that leaves me only $6000 for the year to divide up for food, rent, health related, transportation... Even if I move back to Eastern Europe, there's no way.
    - cperciva 19y ago
      You must have some pretty huge student loans if you're paying $14k/year in interest...
      - ivankirigin 19y ago
        Total payment of 1160/mo means $160K at 8% for a 30 year term. I'm sure there are many people in that situation.
        mrtron 19y ago
        Some student loan programs have minimum payments enforced after the interest-free period, similar to some credit card payments. So, I would not assume that the payment is entirely interest.
        electric 19y ago
        Interesting. I had brought up the issue of student debt as being one significant impediment to startups happening at the pace that pg had predicted they would.
        imsteve 19y ago