Slashdot has an interesting discussion on Y-Combinator today - most interesting because of the general tone of the discussion tends towards negative.
When I first heard about Y-Combinator I loved the idea. Micro seed funding, enough for you and a mate (or two) to work on your hot idea over summer break, plus coaching and encouragement from people who've been there, done that.
What's the downside? Some say surrendering 5-6% of your equity, others say having to relocate, while others still can't get past the micro aspect of the funding.
It doesn't look like they're targeting established, married thirty somethings. In fact, they're not.
This is a firm chasing young talent, often still in school, and providing them with the support, mentoring and money required to breakout before they become encumbered with all the lifestyle baggage you or I might cart around.
Could I survive three months on $6k? No chance. But 10 years ago I would have done it on less than three. Ten years ago I was singularly focused on work, and I was bursting with enthusiasm and optimism: And 10 years ago is exactly where the Y-Combinator styled micro seed model would have intercepted me.
It's a good deal all round. For investors, losses are limited; for the guys in the startup, failure equals another year in school, or perhaps another opportunity much wiser for the experience.
Sure, it's not a suitable arrangement for every type of new business, but Y-Combinator's micro seed funding model seems to excel at being exactly what it is, and nothing more.
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Comments 2
Did you sleep with Paul Graham or something?
Posted May 17, 2007 at 5:48 p.m. ¶Ha!
I like the model, and would have relished the opportunity when I was younger.
As it turned out I worked just as hard on building a business for someone else - a few months later it raised around $8m (iirc). I got access to outstanding business mentors through my involvement in that company - Y-Combinator provides similar mentorship, but you retain 90-95% equity.
It's could be a great opportunity when you're young - and that's the crux of my point.
Posted May 17, 2007 at 11:08 p.m. ¶Comments are now closed.