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Comment by c2 | Hacker News Reader

Does this negatively change anyone's mind who was thinking of applying to YC? I always thought YC was special, they give you less money, take less equity, and typically value you out of the gate at over 100K. Part of the appeal was seeing what kind of company could be grown from such humble roots.

The 150K offer on the table is nice, and the terms are such that you would be foolish to turn it down, but also in my mind it changes the dynamic of YC a bit.

Was wondering if others felt the same.

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It changes the game a lot for startups that would fail 4 months in.

I don't see any downsides though for YC candidates; I don't subscribe to the idea that getting only the initial seed money from YC is better than having the option of the follow on $150K.

  If you find yourself in a fair fight, you didn't plan your mission properly. - David Hackworth

How many YC companies fold four months in?

The only reason I've heard for a YC company closing is "not enough traction", or some variation of "not enough passion" - I've never heard "not enough money", although I'm sure it happens too.

"not enough traction" = "ran out of {money|energy} before finding the right product/market fit"

I also think it changes the game for YC participants. Part of what keeps all entrepreneurs hungry (at least early on out of necessity) is creating knowing that nothing is guaranteed at the end. Now it seems that every participant will get $150K whether their product/business is viable or not. From a competition perspective it may entice more people to apply but the bad ideas will get weeded out no matter how much money is on the table.

It's because people know how much money to expect.

A company that requires significant physical capital investment won't bother with YC. Now they can.

For instance I bet this will produce more hardware companies like WakeMate. Companies that sell more than just software.

It's cheaper then you think to build a hardware prototype (of anything really), and 150K is hardly enough to have a decent first manufacturing run of a brand new hardware product.

I don't think this significantly impacts the hardware/software equation at all.

What about being able to produce a small batch to give to beta testers and iterate? It's possible that the extra money will allow you to better explore things at the prototype stage.

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