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Sure - actual AI (not just chatGPT with a wrapper around it) and legit innovation, hardware, deep tech, biotech - all that stuff requires serious capital upfront, often for many years. But SaaS? It's never been cheaper or faster to build a SaaS business than right now, which means most of that capital is going to be used for marketing rather than product. But if you need money for marketing, there's now a bunch of non-dilutive capital options available now like revenue-based finance - which allows you to keep the equity and, just as importantly, doesn't require the massive 6-month distraction of one founder having to go on an investor roadshow to raise capital.
Going through an accelerator plus 2-3 funding rounds mean the founders get diluted down to nothing. Owning 100% of a $10m company is the same as owning 10% of a $100m company - but it's WAY easier to build a $10m company.
Sure - and that certainly appeals to a certain type of founder. Conversely, I'd argue that if you want to do that, build a $10m company first (it's way easier), sell it, then use the money as seed capital for your $100m idea. If you can skip an accelerator and a seed round, you end up owning way more of that $100m company at the end of the day. Otherwise, even if you're one of the very few founders who ever builds a $100m company, the vast majority of the money made from it goes to investors rather than to the founders.
From YC's own website: "Roughly 90 percent of startups end in failure. (YC is an exception; over 50 percent of YC companies that are over five years old are still alive)." www.ycombinator.com/library/D0-startups-for-students#:~:text=Roughly%2090%20percent%20of%20startups,years%20old%20are%20still%20alive). Not only do half their startups fail, they're actually proud of it. Jared Haymen from Rebel Fund (which specifically exists to invest in YC companies) calculates that 50.2% of YC startups have failed after 12 years. jaredheyman.medium.com/on-the-life-and-death-of-y-combinator-startups-d58aa03421f0
@@ryan-wardell If 90% of startups fail, meaning 10% are successful, and YC's success rate is 49.8%, that means they've nearly quintupled the likelihood of success. Does that not mean they are actually extremely successful?
YC only accepts the top 1.5% of startups. If you cherry pick the top 1.5% in any field I’d expect them to be vastly more successful than average. In that context, how much value is YC actually providing?
@ryan-wardell This assumes that their selection filter is perfect though. The fact they select 1.5% of applications doesn't mean they actually get the best 1.5% of startups from the application pool.
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Ryan has yc ever rejected your aplication?
What about AI? Isn’t investment absolutely required for AI because it just costs SO MUCH MONEY?
Sure - actual AI (not just chatGPT with a wrapper around it) and legit innovation, hardware, deep tech, biotech - all that stuff requires serious capital upfront, often for many years. But SaaS? It's never been cheaper or faster to build a SaaS business than right now, which means most of that capital is going to be used for marketing rather than product.
But if you need money for marketing, there's now a bunch of non-dilutive capital options available now like revenue-based finance - which allows you to keep the equity and, just as importantly, doesn't require the massive 6-month distraction of one founder having to go on an investor roadshow to raise capital.
So accelerators don't immediately = success
Going through an accelerator plus 2-3 funding rounds mean the founders get diluted down to nothing. Owning 100% of a $10m company is the same as owning 10% of a $100m company - but it's WAY easier to build a $10m company.
@@ryan-wardell You do have more impact (and bragging rights + future partnerships) on the world from $100m company than a $10m company.
Sure - and that certainly appeals to a certain type of founder. Conversely, I'd argue that if you want to do that, build a $10m company first (it's way easier), sell it, then use the money as seed capital for your $100m idea. If you can skip an accelerator and a seed round, you end up owning way more of that $100m company at the end of the day.
Otherwise, even if you're one of the very few founders who ever builds a $100m company, the vast majority of the money made from it goes to investors rather than to the founders.
False and libelous
How? Can you give numbers or data to invalidate his claims or are you too much of a wimp to respond?
From YC's own website: "Roughly 90 percent of startups end in failure. (YC is an exception; over 50 percent of YC companies that are over five years old are still alive)."
www.ycombinator.com/library/D0-startups-for-students#:~:text=Roughly%2090%20percent%20of%20startups,years%20old%20are%20still%20alive).
Not only do half their startups fail, they're actually proud of it.
Jared Haymen from Rebel Fund (which specifically exists to invest in YC companies) calculates that 50.2% of YC startups have failed after 12 years.
jaredheyman.medium.com/on-the-life-and-death-of-y-combinator-startups-d58aa03421f0
@@ryan-wardell If 90% of startups fail, meaning 10% are successful, and YC's success rate is 49.8%, that means they've nearly quintupled the likelihood of success. Does that not mean they are actually extremely successful?
YC only accepts the top 1.5% of startups. If you cherry pick the top 1.5% in any field I’d expect them to be vastly more successful than average. In that context, how much value is YC actually providing?
@ryan-wardell This assumes that their selection filter is perfect though. The fact they select 1.5% of applications doesn't mean they actually get the best 1.5% of startups from the application pool.