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Brian Norgard started a conversation 1 year ago
Yuri Milner and SV Angel offer every new Y Combinator startup $150k. Irrational exuberance? Strategic perfection? http://tcrn.ch/e9bQKj
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  • 0 votes
    Basically, who is the loser in this scenario?
    Chris Dumler  •  Punt  •  Delete Comment  •  Mention Chris  •  +1
  • 0 votes
    Or, who is the winner?
    Chris Dumler  •  Punt  •  Delete Comment  •  Mention Chris  •  +1
  • 0 votes
    I think it's *great* for all the entrepreneurs. Stoked for them.

    This move takes Y Combinator into orbit. Literally.

    It's not a huge amount of money in aggregate. I see it as a call option on the success a few stars in the class. Seems smart and a tab bit irrational. As an entrepreneur, it makes me pause and think about the funding landscape.
    Brian Norgard  •  Punt  •  Delete Comment  •  Mention Brian  •  +1
  • 0 votes
    It seems like the angel world has been experimenting. What do you see happening in the funding landscape?
    Chris Dumler  •  Punt  •  Delete Comment  •  Mention Chris  •  +1
  • 0 votes
    I think it's great. Given how time consuming and distracting fundraising can be, I like how this really gives them a jumpstart in getting to focus back on the product and market
    Jonathan Wu  •  Punt  •  Delete Comment  •  Mention Jonathan  •  +1
  • 0 votes
    It speaks to the trust Milner and SV Angel have in YC that it will only bring in the best of the best startups to build. That $150k could the the catalyst that spurns the growth of the next Instagram/Twitter/etc. with the founders free to innovate and build rather than beg for money.
    Michael Dossett  •  Punt  •  Delete Comment  •  Mention Michael  •  +1
  • 0 votes
    Kind of cool, that when I heard this, the first place that came to mind to discuss this was to come here on Namesake. :) But my opinion on this matter is actually summarized in the following Techcrunch article - suddenly, Sequoia got it's dealflow hijacked by Yuri. This is a great time to be an entrepreneur, the VC's got squeezed... and now, even the Super Angels are feeling the pressure.
    Joseph Hsieh  •  Punt  •  Delete Comment  •  Mention Joseph  •  +1
  • 0 votes
    http://techcrunc...tor-deal
    Joseph Hsieh  •  Punt  •  Delete Comment  •  Mention Joseph  •  +1
  • 0 votes
    The lack of a price cap and no discount is interesting. $150K is not that much money. I suspect that many early-stage investors will decide not to participate in financing rounds with these terms. I wonder what will happen when companies take the Milner/SV Angel money, then a week later try to take in money on more investor-favorable terms.
    Yoichiro Taku  •  Punt  •  Delete Comment  •  Mention Yoichiro  •  +1
  • 0 votes
    In addition, this is Exhibit A to prove that there is a early-stage financing bubble.
    Yoichiro Taku  •  Punt  •  Delete Comment  •  Mention Yoichiro  •  +1
  • 0 votes
    Shotgun bet, but in a place where they smell success, interesting play.
    Jeremiah Owyang  •  Punt  •  Delete Comment  •  Mention Jeremiah  •  +1
  • 0 votes
    Using the unofficial list at yclist.com, lets assume Yuri paid $150K to all ~250 start-ups (including the 40 mentioned in the TC article) that have gone through the YC program. For ~$38 million, Yuri would have had seed (and follow on) access to the likes of Scribd, OMGPOP, Disqus, Dropbox, Posterous, Anyvite, Airbnb, Daiybooth, and Hipmunk. He also would have seen exits (~$400M cumulative purchase price) from the likes of Reddit, Heroku, and Cloudkick.

    If YC can continue to curate compelling start-ups, I think the value proposition is there. It only takes one monster breakout to justify all those checks.
    Mike Puangmalai  •  Punt  •  Delete Comment  •  Mention Mike  •  +1
  • 0 votes
    @Mike Puangmalai I think this funding only applies to that YC class of 40
    Patrick Vlaskovits  •  Punt  •  Delete Comment  •  Mention Patrick  •  +1
  • 0 votes
    90% of the startups have accepted the offer. What are the other 10% thinking?
    http://techcrunc...chCrunch)
    Chris Dumler  •  Punt  •  Delete Comment  •  Mention Chris  •  +1
  • 0 votes
    @Patrick Vlaskovits The TC article says he's going to invest in future classes.

    "Milner/SV Angel say they intend to offer this for each Y Combinator startup in the future, too. That means Y Combinator entrepreneurs will not only get the $15k – $20k from Y Combinator during the first few months of their project, but they can look forward to another $150,000 a few months later."
    Mike Puangmalai  •  Punt  •  Delete Comment  •  Mention Mike  •  +1
  • 0 votes
    Russian style investment a.k.a dynamite hunting, that might fuel up the market and make young projects happy just like mine. Good job Yuri.
    Kagan Unaldi  •  Punt  •  Delete Comment  •  Mention Kagan  •  +1
  • 0 votes
    Seems brilliant to me. 6M to gain favorable access to the couple which will break out. I don't really think there's a bubble, but it sure feels like it's coming.
    James Levine  •  Punt  •  Delete Comment  •  Mention James  •  +1
  • 0 votes
    @Chris Dumler still talking to their lawyers. Plus some companies don't want to get trapped into a "must raise funds" scenario - see convertible debt.
    Spencer Thompson  •  Punt  •  Delete Comment  •  Mention Spencer  •  +1
  • 0 votes
    Awesome move for everyone except the "Super Angels". Incredible downward pricing pressure on angel deals and this lowers the "cost" for people to get involved in entrepreneurship. I suspect that this will gradually lower valuations at the seed/angel stage across the board.

    For the last 20 years, most smart kids wanted to go into $100K of debt to get into Harvard/Stanford to get to Wall Street. This has the chance to flip that script and make kids more interested in starting companies than going to college.

    And once again, probably time to give Yuri Milner credit. Plenty of folks thought he was off his rocker for his bets on Facebook, Groupon and Zynga and he keeps proving to everyone that going long on the social Web is the smart bet.

    Lots of interesting stuff to talk about on this topic. Biggest impact ever made by an $8M move.
    jonathanjoseph  •  Punt  •  Delete Comment  •  Mention jonathanjoseph  •  +1
  • 0 votes
    @jonathanjoseph +1000 to this comment of yours, "Lots of interesting stuff to talk about on this topic. Biggest impact ever made by an $8M move."
    Brian Norgard  •  Punt  •  Delete Comment  •  Mention Brian  •  +1
  • 0 votes
    @jonathanjoseph I'd argue that the second Wall Street imploded the I-Banking dream collapsed for most kids. Why? There was nothing else except law school. Forced evolution if you will.
    Brian Norgard  •  Punt  •  Delete Comment  •  Mention Brian  •  +1
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