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Comment by joshu | Hacker News Reader

I guess anything that works.

In my experience, companies raising less than 500k are making a huge mistake.

Is there anything you'd invest $10k on a $4mm pre in that you wouldn't invest $25k in on a $4mm pre? Assuming a $500k-1mm raise.

i.e., do you invest within your range based on your feelings about the investment, or just how oversubscribed the round is?

For me, a $10k investment and a $25k investment would take roughly the same amount of thought and time, so really it's just a 2.5x bigger payoff if you win.

Usually. 10k is when it feels more speculative. But often it is because I got cut down.

Why do you think that?

The point of raising funds is to hire people who can accelerate the growth of the business. $200k gets you a person or two, which doesn't do very much. So you find yourself raising again pretty much immediately. The fundraising process is a colossal waste of your time.

An entrepreneur going this route is not making good trade-offs.

In my experience, most of these companies fail.

What if a product is doing pretty good, but it's not enough to support two founders yet? If they can put all their effort into the company it would accelerate growth (from 25% + 25% to 200% founders). And if that only takes $200k how is that different?

If $200k is good but $500k is not as good, it smells like a lifestyle business. That's not bad, but it's not a good investment for me.

If $200k is too small to be a worthwhile raise, what do you think of people getting money from Ycombinator?

If YC were just investing the dollars, it'd be a terrible deal. But it's doing a great deal more.

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