Hacker News Reader

Comment by danieltillett | Hacker News Reader

Paul are you concerned that by only funding companies that can hit the ball out of the park that you are biasing the sort of businesses that the smart founders are creating? Assuming smart founders know what sort of businesses will get VC funded then only the second tier founders will build businesses that not going for a moonshot. This is obviously going to bias the final outcome.

Do you think that if a business like YC were to commit to funding "safe" options that good founders would create safe businesses that could achieve returns in aggregate that would rival the high risk / high failure model?

View on HN

YC funds approximately 0% of the new companies started every year, so it's not like there's a shortage of other options :)

As for returns, the average value of YC companies that are more than two years old is over $100M. I'm not aware of any other model that even comes close to that.

If anything, I'd like to find more ways to fund even more extreme moonshots (e.g. http://techcrunch.com/2014/08/14/y-combinator-and-mithril-in...). Funding an actual, literal moonshot would be wonderful.

Paul I know that YC has a very minor direct role in company funding, but YC is extremely influential - where YC leads many (blindly) follow.

I see this effect here in Australia where founders and startups are trying to follow the YC model to success despite the ecosystem here being really different. The thing I really love about YC (apart from HN) is that you guys are trying to do things differently - the last thing the world needs is a 1000 YC clones all following your lead and nobody trying different approaches.

I too would like to see a literal moonshot. I have thought a lot about this topic over the years and I think everyone is stuck because they have been concentrating on the wrong area. The cheapest component in the whole process is the humans - the way to get a real moonshot off the ground (sorry for the pun) is to put risk back. There are plenty of people willing to be heroes so why not optimise everything around that - the engineering costs go way down if you are willing to tolerate a high failure rate.

Blackwell's growth calculator can be fun to play with and perhaps provides insight into the advantages of investing in unsafe fast growing companies (aka "startups" as used in Silicon Valley). Note that the growth rate defaults to weekly.

http://growth.tlb.org/#

Reply on news.ycombinator.com