I know investors tend to stick with the companies they fund and help them out, but since $150k split three ways isn't all that much for each investor, how much commitment have you seen on the angels' part? I mean, even if a quarter of the YC companies take the offer, I imagine they'd have a lot of companies to deal with.
I emailed a16z to ask for a meeting or phone interview about an "amazing" opportunity to invest "early" in a new startup. They did not respond or ask any questions, I was completely ignored.
All their deals seem like big money and late stage. Do they know a good startup when they see it? Seems like instead of finding startup investment opportunities by themselves they're going to let YC filter out the good deals for them.
They even said in the article it's just about deal flow.
Interesting that both SVA and AH responded to the success of YC not by setting up separate programs to emulate it, but by coalescing around it. This clearly made sense for Milner as a relative newcomer but the other two groups had no shortage of connections and capabilities in place and could easily have taken either route. YC keeps increasing the margin by which it is the top program of its kind.
This is awesome for YC / YC startups as well as AH as they get to be in the YC companies at the very early stage. However, I am not able to understand why VC firms would go so broad and fund such a large number of startups with amounts that are insignificant for their fund sizes. Would it not be distracting? Would it not leave them with too broad a portfolio to be able to truly make significant contributions to the company's success? Does it not feel like a spray and pray approach? I totally understand this from a deal flow perspective but I'd love for VC firms to focus on deals they believe in and focus on building massive game changing businesses. And for this, I am sure they have to invest in 10 to find 1 that works, but investing in 200 feels not so right - and lacking conviction.
Almost all VC funds do seed-sized investments now. Both sides understand it's not the same as a series A, and both are ok with that.
Incidentally, Ron Conway is proof the model works. He has been operating this way for decades and founders are as a rule pretty happy with the amount of help he gives them.
1. AH could offer $50k on the same terms if they wanted, and most companies would probably take it. It's not like Yuri/Ron have any exclusivity arrangement.
2. YC classes have grown in size a lot. It's probably a bit more expensive than they planned, so they don't mind sharing the load.
3. Having AH as a partner helps the startups, which means they're more likely to succeed (hopefully).
Syndication diversifies and mitigates risk. You're adding a third pro to the mix, so you're more likely to have a proper solution to any given problem.
This is really cool. Love the fact that they are trusting PG and team's filtering process and guidance to build great startups. This is super sweet for the founders as well since they will provide some awesome advice and guidance.
This is great because it now means you not only get PG's advice (and the YC team), but that of Milner AND AH to boot. Makes me really excited about October 31.
[+] [-] pg|14 years ago|reply
[+] [-] Shenglong|14 years ago|reply
[+] [-] Hitchhiker|14 years ago|reply
PG == the new patron saint of start-ups.
[+] [-] wavephorm|14 years ago|reply
All their deals seem like big money and late stage. Do they know a good startup when they see it? Seems like instead of finding startup investment opportunities by themselves they're going to let YC filter out the good deals for them.
They even said in the article it's just about deal flow.
[+] [-] bfe|14 years ago|reply
[+] [-] joshu|14 years ago|reply
[+] [-] pbreit|14 years ago|reply
Creating and running YC is not in the least bit easy.
[+] [-] betterlabs|14 years ago|reply
[+] [-] pg|14 years ago|reply
Incidentally, Ron Conway is proof the model works. He has been operating this way for decades and founders are as a rule pretty happy with the amount of help he gives them.
[+] [-] wavephorm|14 years ago|reply
I wonder if $50,000 even gets you an in-person meeting.
[+] [-] timerickson|14 years ago|reply
What incentive do Ron and Yuri have to give up 1/3rd of the Start Fund deals to Andreessen Horowitz?
Forgive me if this is a naive question.
[+] [-] staunch|14 years ago|reply
2. YC classes have grown in size a lot. It's probably a bit more expensive than they planned, so they don't mind sharing the load.
3. Having AH as a partner helps the startups, which means they're more likely to succeed (hopefully).
[+] [-] Shenglong|14 years ago|reply
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] knarf55|14 years ago|reply
[+] [-] nhangen|14 years ago|reply
[+] [-] Kavan|14 years ago|reply
I am a little surprised that Ron and Yuri let them in on such a good deal. I am sure a lot of VCs would jump at this opportunity.