I still wonder how it can work with the funding. Hard tech often requires a lot of funding, and if ycombinator takes a big chunk early on, the founders will get diluted so much that they lose control and financial incentive to build the company.
YC's stake is 7% (perhaps give or take 1-2% depending on the conditions at the time).
Good early-stage investors, especially YC, are experienced enough to know better than to damage the company's future prospects by screwing the cap table through taking too large a stake in the early stages. And now they have their Continuity fund and other programs to help growing companies, they'll work with the company to ensure that their fundraising strategy is optimal for the long term.
As you rightly pointed out, the funding strategy will be quite different for hard tech startups. They have different milestones and different investor bases with different risk appetites. You’ll also look at other options (grants, collaborations, etc.)
ant6n|4 years ago
tomhoward|4 years ago
Good early-stage investors, especially YC, are experienced enough to know better than to damage the company's future prospects by screwing the cap table through taking too large a stake in the early stages. And now they have their Continuity fund and other programs to help growing companies, they'll work with the company to ensure that their fundraising strategy is optimal for the long term.
tixocloud|4 years ago