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.
YC still invests $11k + $3k per founder, as we've done for years. The $80k is a separate, additional investment offered by third parties.
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.
If a startup needs $95k investment to get started, YC is a viable place to get that. Isn't it?
Is it more common for startups to close with funds remaining, rather than with personal debts of the founders? I’m somewhat surprised that this would be a common scenario; I would have thought that founders would tend to pursue the company (possibly with some pivots) until money ran out.
You can't take a startup convertible note investment and use it to buy Porsches for the same reason you can't do that with an equity investment: it's fraud, and your shareholders/creditors will sue you personally.
One imagines the "founder fight" scenario Graham keeps alluding to is a startup that any outside can see has failed, but the founders can't; people are fighting over the right to continue being paid to work without a boss for X more months.
If you're a founder in this situation, you should know that this is probably the dumbest conceivable fight to get into. Your time is simply much more valuable than a few tens of thousands of dollars. More importantly, any game-changing idea you come up with after the team crackup is now encumbered by the original investors/creditors. Why would you want that? Get out as quickly and cleanly as you can and start over with a clean slate.