There were a bunch of discussions recently related to issues surrounding Y-Combinator, related as usual to their annual demo day. It seemed worth splitting them off into a post.

Bidders at Auction Mostly Think Prices Are Too High

YC is in session, so all the usual talk is back.

Paul Graham: As happens every single YC batch, investors complain that the valuations are too high, and the startups raise anyway.

Kush: Is there any specific reason why you think this happens?

Paul Graham: Some investors just cannot grasp the implications of the fact that all the returns are concentrated in the big wins. The top tier investors get it though; you’ll rarely lose one of them over price.

Amal Dorai: Isn’t the dynamic range of YC valuations narrower than the companies themselves? We see pretty much a 2x range that they’re raising in, but [...]

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Outline:

(00:16) Bidders at Auction Mostly Think Prices Are Too High

(03:32) You Would Pay For The Ability To Charge More

(04:32) The Best Deals Come With the Best Prices

(08:32) Raise Early, Raise Often, Raise Everywhere

(09:07) Good VCs Get Their Money Back Surprisingly Often

(11:21) If You Want it Done Right

(13:38) You’ll Need the Time to Do That

(15:49) Credits You Will Need More of Are Essentially Money

(16:54) Get Your App Out There Quick

(18:12) No, Quicker Than That

(20:31) All The Startups Are Now AI Startups

(22:36) Man With Moat Unconcerned With Non-Flying Creatures

(25:27) The Investor Database Is a Killer App

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First published:

Source:

Narrated by TYPE III AUDIO.