Re:The YC Winter 2022 Batch
by forgingahead on Wednesday March 30, 2022 @03:35AM
(#30852374)
Certainly makes sense - though the piper needs to be paid eventually though - loftier valuations eventually need to be justified, else companies eventually suffer a down-round or worse, founders get kicked out or the entire company gets shut down. Seems like a Russian-Roulette way of playing business - hope you can exit with strong wealth before you find the chamber with the bullet in it.
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Yes, it's a different risk profile that doesn't suit all businesses. VCs are in the business of power-law returns: They're looking for homeruns, not base hits. It's really important for founders to select the right sources of capital for their business. The good news: YC itself is a pretty good actor on that front -- the new $500k uncapped SAFE helps founders retain optionality without fully committing them to hypergrowth trajectories.