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Comment by whatl3y | Hacker News Reader

> Apply to a pool in your startup category, within 3 months of the valuation event.

Most "valuation events" for startups are seed or series X fundraisers, no? So how could founders who bootstrap participate in this, if at all?

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VCs and angels act as a signal as well as what sets valuation. The model works best in standard tech startup lifecycle. But as the model catches on, there could be a future where non-investment but revenue-generating businesses form a pool, as well as a lifestyle business pool, or a pre-revenue, pre-product pool.

We are using this as a screening for adverse selection, but founders who are bootstrapped can also apply if they have proven traction (we have a few stellar startups who were highly ranked but never raised money)

How about 409A valuations for those who've bootstrapped?

(You probably know what it is, but for non-founders or others who haven't been through it - https://carta.com/blog/what-is-a-409a-valuation/)

It is the only way to go for bootstrapped companies. There is a pool for bootstrapped companies

Aren't 409A valuations significantly lower than VC valuations for the same company? So wouldn't bootstrapped companies be at a disadvantage by having to use a lower 409A while VC companies get to use the higher VC valuation?

edit: I see, bootstrapped is their own pool so the two valuations never get compered against each other.

Does mean there's potentially more unforeseen upside from an acquisition exit though. I wonder if that might make the bootstrapped pool a more attractive pool to be a part of.

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