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NYT on Paul Graham's YCombinator Bootcamp
prostoalex writes "The New York Times tells the story of Paul Graham's YCombinator - a venture firm that specializes in funding early stage startups that's famour for startup bootcamps conducted twice a year in Silicon Valley and over on the East Coast. YCombinator's boot camps apparently attract a lot of employees out of major software companies, who are still young and want to run a software startup."
....Keith Casey, blogged about his trip to Startup School here. There's an interesting note in his post about one of the speakers talking about how nervous CFOs feel about Sarbanes-Oxley.
Incidentally, Keith also reviewed my book.
The Army reading list
Talk about getting a bargain - if you can't figure out a way of raising that sort of money on your own you really shouldn't be in business.
Remember, folks, venture capital is like heroin; easy to get hooked on and bloody hard to get off.
--- Nick, hard at work
Reminds me a bit about the "college" Phil Greenspun started a few years back. It was going to be an "accelerated" version of M.I.T. bypassing the stuff irrelevant to startup computer businesses. It also sound a bit elitest and blowhard.
Anything that can channel the energy and creativity of smart young men and women into constructive pursuits has my vote. Sometimes people are turned off by formal channels like universities and low level entry jobs and dont realize their potential.
Y_combinator is focused mostrly on software and web services. That's cool, but is a sign of a trend that I don't like. This kind of focus on IT sometimes lead people and some media too to equate technology with software and web services. I think this leads the masses to think that's all there is for technology.
That's insane, 6% stock for only $20k investment AND they won't sign an NDA so they're free to take your idea and pass it off to one off to whoever they want. If you're a budding entrepreneur and you can't raise $20K for seed funding you really should stick to being a wage slave.
I find the credentials of this group of people pretty weak when it comes to startups; making a lucky sale during the early Internet boom years is not the same as having sustained startup or business experience.
It is always possible to develop your start-up into a viable self-sustaining business by yourself. One reason many start-up founders flip the company is because they are passionate about their product, and realise that they are probably not the best people to manage it in the long-run. Furher, by flipping the company to a larger potential competitor you keep the product alive as opposed to having it later buried by the competitor. But that is entirely depended on competitor, market positioning and etc.
Basically, middle-aged successful people are trying to re-live their "gee, what if *I* had a million bucks when I was 22" youth. Well, that's great, but really, not that many great--and complete--ideas really do come from fresh college [under]grads. It takes experience, whether in advanced degrees or out working in "the real world" to get the combination of [K]nowledge [S]kills and [A]bility to make a business work. I mean, at the point when you're barely qualified to be a decent employ-EE, how the hell can you reasonably expect to be a decent employ-ER?
It would be far more realistic to design something like this around the assumption that you *will* be over 30, married, with kids and solid decent paying job (that you can hopefully self-fund with) and teach people how to start a business in THAT scenario. Chances are, by the time most of the attendees in these things actually get their collective sh*t together, they WILL be in that situation. But, by the time their in that situation, they're no longer sexy wunderkinder that make Daddy Warbucks stiff and proud...and part owner.
But also a lot harder for paul & co: instead of people willing to move to where you can coach them and live on $2k/month or so, you've got someone who is less able to relocate AND has significantly higher fixed expenses.
:)
Business 101: if your costs are higher, your return needs to be higher too, or it's not worth it.
I suspect that paul simply doesn't know how to get 3x the output from 30-somethings that he can get from 20-somethings in return for the higher costs. This is amplified by the relocation issue; _you_ might not think paul's advice is worth relocating for, but _he_ clearly does. And he's doing the investing.
Ok, start by handing over 6+% of your company.
...
If you're good you'll get you business-skill-lacking-self in front of investors. Don't worry, if they like your idea, they'll take care of the legal work for you. Kiss a whole bunch more of your ownership goodbye. Oh wait, you need more money to keep developing, that's where our funding comes in with so many strings attached you'll get dizzy if your patient enough to read the contracts. Don't worry about reading them, however, because the lawyers the VC's set you up with will take care of that. They'll look out for your best interests. Trust them.
Cookie-cutter contracts and business formation legal work can be purchased from numerous places over the 'net for anywhere between $100 and $1000.
Sorry for the cynicism, but if you can "make something people want", you can probably attract enough attention on your own. Isn't that what the Internet enables? As others have pointed out, you won't have to move and if you can't get $6k on your own
And if you're not young you're not interested in running your own software startup?
I attended the coming out party for the batch last year and they did develop some promising bits of technology. The problem was the "next step" was missing. These were all very young kids without any business experience so they had miles to go before looking like a company. Of course you never know, a Michael Dell comes around every now and again. Who sets them up with their next round? Gives them enough money and working space to start a real company? Brings in management and coordinates the process? They are all missing the "sweeper" who can make this happen in a small company. I'd tell my son to go spend some time working for the "man" and suck up every piece of information and contact you can. Then you can write your own ticket if you are smart. All that said we do need new financing models for early stage firms because there is a major gap in the market these days that seemingly nobody wants to fill.
Been up and down Sand Hill road and other places. Have been pitching some neat ideas for a few years. VCs say ho-hum, and months later we see newly minted startups using some of our slides in their pitches. Our idea is now generating startup capital and VC blog-drool across the VC blogverse, with nary a cent from these people for the group that developed the product to begin with.
Most VCs are looking for the next MSFT or GOOG.
Most of them wouldn't know the next MSFT or GOOG if it came up to them and whalloped them in the ass. Which, coincidently enough, happens often enough that these folks lose lots of their investors money.
VC money is a drug. It is cheap, you don't have to work for it. You just need to find a sufficiently gullible VC who is foolish enough to believe you. There are far too many of those. Just look at the internet bubble these yahoos created. You could have a loose bowel movement, bring it in to a VC and get 10M$ funding for it.
Exactly! The whole "Here, we'll show you how to succeed!" shill drives me nuts. I believe that like it or not, most of us are destined to be cogs in the machine, and only a few will ever step out of that. And those few won't get where they are going by taking seminars, leadership training, management classes, etc. It's harsh, but I truly believe "those that can, do; those that can't teach", but applied to the business world (I have nothing but respect for REAL teachers - those educating our youth). The great leaders and innovators throught the world and history didn't take classes and seminars and such - they just went out and "did it", along with a lot of luck and good timing. Just my $.02.