

Funding "No-Idea" Founders Is Bullshit - adii
http://adii.me/2012/05/funding-no-idea-founders/

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avichal
Investing in great people is the ONLY viable angel investment strategy. Most
great early stage investors invest in the team first and idea second. Capital
is plentiful and readily available. Great entrepreneurs are extremely rare.
These people are such a no-brainer than NOT investing in them would be a
mistake. There are thousands of them out there and not meeting them because
they don't have an idea yet would be a HUGE mistake. Betting that they will
find a great idea and execute on it is the right approach.

The quality of an idea is just a proxy for the other intangibles that a great
entrepreneur needs to have (including being able to identify a opportunity to
pursue). Just because they don't have an idea yet doesn't mean you can't
consider other proxies for how great an entrepreneur could be.

YC is looking at other non-idea filters and it's a smart approach. It's the
approach most great angel investors use. Because it works.

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justin
Every angel investment is "a calculated risk and semi-gamble."

Also, title is link bait, considering author doesn't actually provide any
reasoning why you shouldn't be funded if you don't have an idea.

There are plenty of people I'd rather give money to even without an idea than
the average would-be entrepreneur with an idea. A recent example: my friend
Tikhon, CEO of Parse, raised money and started his company before they thought
of the idea for Parse. I'm pretty confident my investment in Parse is going to
make me a bunch of money, given their skyrocketing growth.

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benologist
Most startups have shit ideas and most of the good ideas end up failing
anyway, where failing means mediocrity or bankruptcy or selling yourself and
your team into slavery for a few years.

It's pretty retarded to fund startups _with_ ideas - even for YC it almost
never works out.

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rewind
YC never said they would fund no-idea founders. They said they would let them
apply. It's an experiment. Maybe they'll fund them; maybe they won't. This is
only the first step. When you consider how much experience and data YC has
now, you should assume they'll use that wealth of information to determine if
a no-idea set of founders matches the qualities they attribute to success in
previous start-ups. They'll probably also talk to them about different types
of ideas and projects in the actual interview.

People shitting on this idea appear to be assuming that YC is run by a bunch
of idiots.

~~~
adii
If you read closely, you'll see that I know that this makes sense to YC (and
others in similar position). But it's not viable as a generic investment
strategy.

YC have a proven track record and I'm sure if they allow no-idea founders in,
it'll prove to be a big success too. But again, YC is the outlier here.

~~~
kstenerud
To turn this around, how exactly do you measure the risk of investing in a
would-be entrepreneur?

If two otherwise equal entrepreneurs ask for money, and one has a product idea
while the other does not, what is the difference in probability of business
success between the two, assuming they both go on to secure the same amount of
funding? If they are different, what is your reasoning for assigning different
probabilities?

~~~
adii
As an investor, you can judge the current market size, the potential, as well
where that fits into current trends when the entrepreneur's idea is present.
Those are just some of the factors that are generally taken into account when
making any investment.

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paulsutter
It's probably impossible for YC to locate founders that have no ideas
whatsoever, so I dont think you need to worry about them succeeding at that
goal.

Especially because that isn't the goal. The experiment was to accept
applications without a _specific_ idea.

ps. As noted elsewhere, your article is linkbait because it offers no specific
reasons beyond the title itself.

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therealarmen
_There’s just no reason to determine the founding team actually warrants that
investment._

I don't follow. If Mark Zuckerburg quit Facebook tomorrow and wanted to start
a new company but didn't have an idea yet, would you invest in it?

~~~
adii
Yes, I probably would try make a small investment in his next venture; not
because I think he can recreate the same wealth he's done with FB, but his FB
journey suggests he can make money again. I would still regard this as a bit
of a gamble though.

Would you put $10k / $100k / your life savings into his next venture without
knowing what it is?

