Well, I think YC is pretty clear about the sorts of companies they aspire to invest in, e.g., Dropbox, AirBnB, etc. I also imagine quite a lot of the founders who apply to YC aren't aiming for "lifestyle" businesses, in particular since there are cheaper ways, from a dilution point of view, to raise the equivalent amount of capital (or alternatively, to bootstrap to early revenue and find alternative means to finance the business).

YC does indeed optimize for power law outcomes, but then again so does every venture investor (or at least, so should every venture investor).

This might work to maximize price but it won't necessarily land you with the best partners. The smartest, best money knows it and they make you pay for their investment. Moreover, approaching fundraising as a transactional auction in a quick sprint carries with it a bunch of "relationship debt." You're signing on to someone (your investor) you can't fire for the duration of your company's existence. Rushing into that might end up costing your company far more than the marginal gain from a bidding war. Just my two cents.

This goes against point #2 that the investor for the most part doesn't matter.

Point #2 is so patently absurd its hard to take seriously. One, YC are themselves investors, and as far as I know they don't position themselves as causally inert in relation to a company's success / one of many indistinguishable and arbitrary alternatives.

Two, I don't think you will find many entrepreneurs who'd claim indifference around their investor choice. At the very least, this claim asks us to believe there aren't terrible investors who cause damage, which runs contrary to both common sense and history.

[edited]

Well, mea culpa. The piece does address the issue of bad investors. My main beef is with the line, "in the end, while some investors are better than others, none of them translate directly to success," which I don't think is a credible claim, or at least warrants more evidence.

If I'm not mistaken, YC gets pro-rata as preferred shareholders, so their dilution is not any different from everyone else in that class.

Pro-rata doesn't mean what you are implying.

Pro-rata is in theory the right (but not the obligation) to buy back in, at the new price, to get back to your prior ownership level.

In practice however, pro-rata is a firmly stated polite request to the next round lead investor to let you do so. The real determinant of whether you get to use the pro-rata right is whether your next round lead investor is OK with it (and whether you want to try to block that next round).

Yes, I know. But if you want to tell YC they don't get their pro rata (or practically speaking, convince the founder to tussle with them over that), have fun. I've seen them not budge even when it makes the founder's life much harder as they struggle to balance the pretty typical ownership requirements of new money.

Good point, YC is a uniquely powerful market participant these days and has both the power and the breadth of portfolio to negotiate hard.

This article seems to be in some conflict to how YC operates, which is designed around the demo day auction frenzy, where you might see valuation caps rise overnight on a rolling basis (I've seen some almost comical leaps in valuation in this regard), not to mention starting at prices in the $10-15M range. The ones that clear at those prices, on average, don't have the traction to justify it, which means the capital they get is often either second tier or first-tier call options. The net result is the best companies in the batch do just fine and because their prices, on average, were higher, YC and the company benefit from reduced dilution. The rest of the batch is then left with an inflated effective post-money that makes it harder for new capital to finance, especially if it follows an average growth curve.

New money doesn't particularly care you raised post demo-day at $15M if they think you're worth for example, at best, $12M now. It's a difficult conversation to have with founders and it can result in completely unnecessary pain around morale and optics. The worst loss is perversely invisible, as smart money might de-prioritize pursuing these companies knowing they have to work around the earlier mis-price. This is an opportunity cost that might not be apparent to most.

This is all complicated by the fact that demo day is in fact, not the first shot investors get at the companies in a batch. You might find that some of the most exciting companies in a given batch have been almost fully subscribed by the time demo day rolls around, as top tier firms don't wait till the actual demo day. Obviously, YC can't nor should they proscribe meeting with investors ahead of demo day, but this simply means access isn't as equally distributed as the notion of demo day might suggest. It looks to some degree like a second pass for folks without the network or access of a top-tier firm.

All this works great for YC, which, like every other fund in this world, makes money off power law returns, but it comes at a cost.

[edited]

Will do. Best number?

Any profit at all.

This is particularly hard for people with ADD. That said, I think it’s potentially dangerous to give advice that’s in any way titled the “Psychology of...” without actually basing it on evidence and the literature because people might confuse it for rigorous or clinically appropriate guidance. I recognize you couch this in your experience, but if you’re going to write about something that in anyway dovetails with a pathology, it could be helpful to include at least some even abridged literature review, since this will be viewed by thousands (given you’re a shoe-in for HN’s front page).

I get what you're saying, but ultimately I think the onus is on the individual to filter all their own information. I'd go so far as to say information filtering is one of the most important skills for modern humans in a digital culture.

The reason I say this is because clinical studies have a limit. Both in the sense that as an individual you may be an outlier, but also in the amount of attention you can get from trained clinicians. By all means, if you are suffering, seek professional help, but sometimes you still have to figure out a way to help yourself even if there's not a double-blind study to back it up.

This is a good goal to strive for, but it's far from the present reality. Bad information is abundant enough as it is. There's no reason to exacerbate the problem with poor framing and inadequate sourcing.

You've been downvoted but I laughed because this is exactly the inner monologue I have whenever I try to start a Dreaded Task.

"I don't know where to start! Well, I could start with document A, but then I'd need some information from document B, which requires document C, but I can't do C until I've done A -- oh no, a loop! I can't see how to get round this at all; maybe my head will be clearer tomorrow. Time for a break.

(NB the "loops" often aren't really 100% circular, but seem insurmountable in my head; this is the point where talking to someone is invaluable, if I can get past the usually correct suspicion I'm going to sound stupid for making a big deal about a block which seems totally trivial and non-blocking when I try to put it into words)

...Also, didn't I already work on document B? But I can't remember where I got to, or where I put my notes, or what they mean..."

I do suspect I might have AD(H)D but I live in a country where adult ADHD is not really recognised, so I guess I'll have to do the best I can using some of the good tips posted here instead.

Then you've figured out part of why you're procrastinating on the taxes in the first place. Time to rename the task again: "create list of finance docs needed for taxes."

Completely agree. Survival past that point would probably be a worse outcome. Just imagine the long tail of life when fully aware of humanity's self immolation. Combine that with the fact that most of the people likely to survive are the most paranoid of today's preppers, one shudders at the thought of plodding through an existence trapped in the most neurotic subreddits come to life.

I'm not convinced that peppers are as prepared as they think they are. Post-annihilation we need people who build civilization, not that hide in holes. Good luck living in a shipping container surrounded by a few inches of Quickrete from Home Depot while a hungry mob led by the most charismatic survivor looks for a way in.

You are seriously underestimating the paranoia in parts of the prepper community if you think they don't have contingencies for that exact situation.

There will be more hungry humans than they have bullets.

Also, hungry humans will have bullets. It's America.

I mean, this topic is pretty far from any reasonable assumptions, so if you want to base your doomsday survival plan on charging into the killings fields of a crazy dude with pallets of ammo and AR-15s be my guest.

I was just highlighting the point that some people are exceptionally over prepared for just about any scenario, not trying to argue the merits or morality of it.

None of them seem to account for human spite. After a certain point survivors might just try and seal up the bunker entrances or cave in a bunker entirely, or at least use the possibility as a bluff.

That seems like a perfectly reasonable angle of attack, but the number of assumptions in play make the whole thing meaningless.

My original point was only to highlight that certain people really are almost hilariously over prepared for just about any eventuality, and any assumptions made should probably take this into account. I wasn't suggesting they were right, or wrong.

And thus "civilization" re-emerges from the ashes. [/s]

I'm sure they have thought about it, I just don't think they have a workable solution.

I think churches are more likely to emerge as the new government. Arguably worse.

I think Babylon 5 got that right, in the aftermath of, “The Great Burn,” although we’d be in it without outside help. Religion would emerge, but it might get a lot more primitive, and we not might bounce back in a meaningful way.

Turning this company into a focal point about SV culture is such a ridiculous exercise in voluntary dyspepsia.

You mean except in the winter.

I don't buy the "raising awareness" argument, ethically speaking. To do that, you could release demo files that show the capability without weaponizing it through easy access. It'd be great to increase awareness around our vulnerability to EMP attacks, but we don't need to publish specs and or sell a working prototype to make that case.

This is just one of those areas where the negative implications, I believe, far outweigh the positive ones. Aside from the noble cause of helping the disabled, most of the use cases center around entertainment. As great as that may be, the likely application to fraud and the potential for a catastrophic misuse in matters of war and peace just dwarf any upside.