yeah, as an outsider looking for entry into startup - it just doesn't seem right! i get the fact that you guys have to fund the company some way! but it just seems too costly. i would be short selling myself.
We're hoping that becoming a Pioneer vastly increases the odds that you turn your "shower-thought" into something real, even if it takes a few years to mature.
We're going to be making bets on folks substantially before they have the indicia of success that investors screen for. Before anyone could even say "This person will someday found a company." The math for this to be sustainable requires that the equity slice be higher than someone would ask for if they knew 100% of their investments were in high-potential companies.
1) I'd be less apprehensive about giving away 8% to any (!) company I found if I knew the network/guidance/community were proven.
2) You need track records of success before the network/guidance/community is seen as worth it. Right now, it's a gamble since you're new.
So you need a population of people willing to take a lower amount of money with a gamble on community quality.
Given that, it seems better off to wait.
if your startup fails, you will never join another as an earlier employer, which is the plan B for most failed founders. becuase now you are a toxic asset to any early stage company which you can be said to be a early founder. now you will only be able to find 9-5 jobs at big Co as your plan B.
It strikes me that the lack of conviction in the people that the Pioneer fund itself is selecting (as evidenced by such a low amount of money for such a high percentage, and lock-in) means that all that they will get is going to be half-baked shower thoughts. Ultimately, you get what you pay for.
And before you object to the notion of exploitation, let's just contrast your quasi-moral claims about loss to "the economy from the loss of ideas and wealth they could have produced," to the rather huge liberties you'll take with the people who you'll be supporting. So are you really concerned about the grand loss to the world of people in whom the world doesn't sufficiently invest, or are you most concerned about maximizing venture capital? These goals are in logical conflict.
+5% for 20k is not that much better, it's a valuation of less than half a million.
If you want a biotech, or a hardware company, or something that really moves the needle, you'll have to put more money in there. Things that really change the world need a longer runway. Things that change the physical world need 5-10 years of burndown funding, and a team of 5-20 people.
20k buys you an hplc. Or a really cheap shuttle run. What is the expectation beyond that? Further raises on an early seed? Even let's say there's a 5x bump in value, to raise 1-2m to do something real and hire people takes on the order of 20-40%... And I've seen more than one companies fail to raise a series A with a risky and dangerous new idea because there had been too much seed dilution.
I couldn't do some really basic cancer drug research on $60k - i had to stop renting a lab and move to my garage, deal with multiple equipment failures from out of pocket, and suffer 3-and-going-years of delay due to having to get a job and reequilibrate personal finances and lose time to work on it, and I'm continuing work on a dribble as and when I can afford to do it... $20K would not have covered my animal studies, which themselves were low-n and strictly "proof of principle". Even this project had its initial phases funded through the traditional academe, and I don't see such a low investment getting any such a thing to a point where a for-profit would have a saleable asset (be it IP or otherwise) or at least a product and cashflow to convince series A to throw in when so much equity has already been given.
This project seems to be clearly aiming people who have ambition and competence, but minimal to no current resources or connections; the goal being to get them to where that is no longer the case -- helping them to reach their potential. It's hard to call anything at all exploitative if it succeeds in getting people from that critical nothing to something point, regardless of how it does it.
Nope! haven't made it.
"This project seems to be clearly aiming people who have ambition and competence, but minimal to no current resources or connections; the goal being to get them to where that is no longer the case -- helping them to reach their potential"
hi, that's me!
"It's hard to call anything at all exploitative if it succeeds in getting people from that critical nothing to something point"
i see the value of taking people from nothing to critical mass i.e - YC. in case of pioneers - i might be nothing now but highly unlikely - i will be nothing for the next 8 years!
imho, this 5 + 3% won't select for the best of people! I would totally judge a person who lock herself in this 8 year contract! that's just me
Similarly, those few % of equity means less equity later for future rounds of funding or for paying out to employees.
That kind of honest self-reflection is something sorely missing in Silicon Valley. Far too many people think their success was inevitable and completely self-made. Very few acknowledge the very rare kinds of help they received, and for a small turn in fortune, might not have received.
It's a great thing that you've not forgotten how different your life could have been without opportunity. And it's a beautiful thing that you're using your success to extend that opportunity to others.
I'm sure your resources are limited now but hopefully over time you will expand the grant (or investment) to help more people and with more money.
Congrats and good luck!
But, maybe I’m missing something.
You mention an aim to support high-achieving outcasts, but the application process appears to be, as another comment mentioned, a popularity contest. What is the thinking behind that?
I think one of the largest problems a lot of creative, insanely formidable people face are a barrier to entry to a network like this. That is one thing I've always admired about YC, Startup school. Pioneer's value in this would be insane.
I'm looking forward to the results, and hopefully climbing up the leaderboard myself over the next few months ;)
You can probably imagine that–for some–that statement doesn't really jive with being "open for all", etc.
Not sure what kind of ideas you’ll fund but there are lots of really smart people who love to tinker and solve problems. Being able to give them some runaway fuel so they can focus on problem solving rather than staying alive by taking a job they don’t love can go a long way.
When YC started, no one knew what it would become. It had good intentions, some money and a pool of wiling young folks to bust their asses.
And I think that concoction is amazing. Mentoring + network + funding + talent.
I really wish you the best.
Looks like it's more of a popularity contest than anything else.
Exactly. To quote [1]:
"The world is full of extraordinarily creative people that are struggling to fit in.".
If the candidate is struggling to fit in, he/she is probably not "the popular kid" or a highly successful self-marketer.
Another quote from [1]:
"Our goal is to build a decentralized network of young, creative and exceptionally motivated outsiders who don’t fit in to the traditional system.".
I personally would claim that such self-marketing is exactly what the "traditional system" is (among other things) strongly about. So making it a popularity contest is opposed to the self-stated/self-imposed goals.
Perhaps I misunderstand, but I think you mean "beneficiary".
Nat Friedman and I launched AI Grant last year (https://news.ycombinator.com/item?id=14851806). The idea was to give out money to promising AI researchers around the world. To date, we've funded 50 researchers, from high school students in Hawaii to aspiring researchers in Africa. We’ve been inspired by the fellows we’ve funded all over the word. I’m following it with a new project called Pioneer.
Pioneer funds ambitious people around the world working on interesting projects. Unlike YC, this is focused on small projects, not companies. A project could be anything -- open source work, research in physics or biology, or creating art.
If one does start a company, Pioneer gets 3% of equity in it in return for the network, community and guidance it provides. But it's by no means a requirement or a goal. We're merely hoping the small fraction of companies help us fund this experiment in perpetuity.
I think the largest gift we'll give our Pioneers isn't money. It'll be non-intuitive things like a network of friends (other Pioneers), a forcing function to get that thing done and mentorship from inspiring individuals.
Unlike other grant programs, we’re trying to do most of the screening in software. Becoming a Pioneer requires winning the Pioneer Tournament -- a (hopefully) fun and interactive application process. More on that on the site.
I'm passionate about this work because I'm the beneficiary of a similar system. I wrote about my story here, if you're curious: https://pioneer.app/blog/hello.
I read HN daily. And I've lost a lot of sleep about how this comments section will react to Pioneer :)
I'm hoping you'll find this at least a worthwhile experiment to run. Do let me know what ideas or feedback you have!
P.S. This effort is unrelated to YC. If you have any complaints about it, shoot me, not them!
P.P.S. Nat remains a close friend to Pioneer but his focus is on GitHub. AI Grant will continue to run as a non-profit. More details on that soon.