Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Startup Roundup #2, published by Zvi on August 6, 2024 on LessWrong.

Previously: Startup Roundup #1.

This is my periodic grab bag coverage of various issues surrounding startups, especially but not exclusively tech-and-VC style startups, that apply over the longer term.

I always want to emphasize up front that startups are good and you should do one.

Equity and skin in the game are where it is at. Building something people want is where it is at. This is true both for a startup that raises venture capital, and also creating an ordinary business. The expected value is all around off the charts.

That does not mean it is the best thing to do.

One must go in with eyes open to facts such as these:

1. It is hard.

2. There are many reasons it might not be for you.

3. There are also lots of other things also worth doing.

4. If you care largely about existential risk and lowering the probability of everyone dying from AI, a startup is not the obvious natural fit for that cause.

5. The ecosystem is in large part a hive of scum and villainy and horrible epistemics.

I warn of a lot of things. The bottom line still remains that if you are debating between a conventional approach of going to school or getting a regular job, versus starting a business? If it is at all close? I would start the business every time.

An Entrepreneur Immigration Program

This seems promising.

Deedy: HUGE Immigration News for International Entrepreneurs!!

If you own 10%+ of a US startup entity founded <5yrs ago with $264k+ of [qualified investments from qualified investors], you+spouses of up to 3 co-founders can come work in the US for 2.5yrs with renewal to 5yrs.

Startups globally can now come build in SF!

A "qualified investor" has to be a US citizen or PR who has made $600-650k in prior investments with 2+ startups creating 5+ jobs or generating $530k revenue growing 20% YoY.

If you don't meet the funding requirement, don't lose hope. You CAN provide alternate evidence.

For the renewal to 5yrs, you need to maintain 5% ownership, create 5+ jobs and reach $530k+ revenue growing 20% YoY or $530k+ in investment, although alternative criteria can be used.

While on the International Entrepreneur Rule (IER) program, I believe an entrepreneur can just apply directly for an O-1 to have a more renewable work permit not tied to their startup and/or an EB-1A to directly go to a green card.

Here is the official rule for it. Notice that once someone is a 'qualified investor' in this sense, their investments become a lot more valuable to such companies. So there is a lot of incentive to get a win-win deal.

Times are Tough Outside of AI

If you are in AI, it's time to build. Everyone wants to invest in you.

If you are not, times are tough for startups. Ian Rountree lays out exactly how tough.

Matt Truck: Brace for it: hearing from big companies corp dev departments that they're flooded with requests of startups looking for a home. In some categories, pretty much all companies are/would be up for sale. This too shall pass but this long-predicted tough moment seems to be upon us.

Ian Rountree (late 2023): 've been saving my first mega-tweet for this! I'll tell you what the next 3-12 months will probably look like for startups/venture…

But 1st let's rewind to Spring 2022. As soon as rates spiked we had a period where private markets went flat for as long as companies had runway since companies don't have to price their shares unless they like the price OR need the money. (Whereas liquid assets repriced pretty much immediately.)

Very few startups outside of AI - and some in climate and defense - liked the prices they were being offered so most didn't raise capital or raised extensions from insiders incentivized to hold prices steady.

Now most startups are running out of the money they raised in 2020-2021 + those extension...