
Ron Conway steps back as Y Combinator cuts team funding - pizu
http://news.cnet.com/8301-32973_3-57554351-296/ron-conway-steps-back-as-y-combinator-cuts-team-funding/
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jasonkolb
Does it strike anyone else as odd that the context for this discussion
revolves solely around the funding they're given, and that's the only
barometer in this discussion?

While I get that it's not the reason being given, it's hard not to infer that
this pullback in funding is in some way related to the real-world success rate
of recent YC companies.

~~~
pg
Do you think I lied when I said we wanted the amount to be lower because $150k
was causing messy disputes?

To get the number down to $80k, I had to ask all the participants to invest
less than they'd originally planned to.

Among the YC partners there are still some who think the amount should be
lower than $80k.

~~~
kylec
$80k is still a lot more than the (iirc) initial $5k + $5k/founder.

~~~
pg
The $80k is not invested by YC. I get the impression from some of the threads
about this that people don't realize that.

YC still invests $11k + $3k per founder, as we've done for years. The $80k is
a separate, additional investment offered by third parties.

~~~
edanm
The article definitely reads as though YC is, at the very least, completely in
charge of this money.

I know that it's not true, as do other older members, but I wouldn't be
surprised if new members get the wrong impression.

~~~
tptacek
This is an 80k _sight unseen_ investment conditioned solely on acceptance into
a YC batch. YC controls it in the sense that they control the batches, but you
could fund your own YCXC program that offered $x0,000 to each company in each
YC batch. It would succeed or fail to the extent that individual YC companies,
all of which completely control their own operations, decided to take you up
on it.

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ghshephard
November 26 - see the full thread of comments on reduction of team funding and
rationale behind it here: <http://news.ycombinator.com/item?id=4861867>

~~~
DanielRibeiro
More comments on Pg's submission[1], and relevant HN discussion[2]

[1] <http://ycombinator.com/ycvc.html>

[2] <http://news.ycombinator.com/item?id=4833074>

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jnsaff2
Is there a list of failed/doomed YC startups? Maybe with some analysis?

~~~
astrodust
<http://yclist.com/> perhaps?

There's also <http://www.seed-db.com/accelerators> which was posted on HN
earlier.

~~~
balsam
on yclist it seems 70/84 made it to launch S12, compared to 45/60 for W11.

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tomjen3
It seems insane to cut the best investor out of the group - even if you want
to reduce the total investment you still want the best people.

~~~
hayksaakian
From TFA, it seems like he'll still be available for office hours, just not
providing $$$

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jonathanjaeger
Makes sense -- that extra $70K or so probably isn't the deciding factor in
seeing whether someone has a validated idea and product. Ron Conway probably
stepped back in part because now EVERY company is a Ron Conway-backed company
and that his backing doesn't have the same cachet as before.

------
hayksaakian
How is YC doing financially?

~~~
kapilkale
Very well. From last year: <http://ycombinator.com/nums.html>

~~~
rdl
The other thing to remember is that YC is growing. Even if YC isn't getting
any better at this despite lots of experience, bigger team, etc., they're
investing in larger batches (even the most recent decline to <50 is still
bigger than until W11). So, assuming a constant distribution of AirBnBs and
Dropboxes and Herokus and Cloudkicks and Wufoos, there should be a lot of
great companies still in play. (I think Stripe is clearly one of those; Parse
and Meteor may be others).

------
tokenadult
Some investors have more of a long-term perspective than others. Always the
scary part of investing in early-stage startups has been the need to fund a
lot of losers to cast a wide enough net to find the occasional winner. The
main YC team will keep refining its procedures for searching out winners who
haven't won yet, while screening out losers who won't win even with a YC
investment, but that will always be an inexact art.

~~~
001sky
_searching out winners who haven't won yet, while screening out losers who
won't win even with_

\-- Ad Hominem Investing. Also worth a second look, as a Thesis.

~~~
vidarh
It comes across a bit harsh worded that way, but if you look at it purely from
the point of view of a VC looking for a decent ROI, most of will be "losers" -
most startups fails, and while many founders will try again and again and many
will eventually make it, a large portion will never succeed at getting growth
enough for an investor like YC to make a decent return.

If it was meant as a personality judgement, then I agree with your assessment.
But if you view it as purely a statement about their odds of success at
present time, it's just business.

~~~
001sky
But most startups fail because the product sucks. its not the people that
"fail" in the market. The end-market could care less about "the people", in
that sense. Its worth sanity checking even good heuristics, occasionally.

