Hyper cynically, SV/Valley VC funds investing in Africa's startup ecosystem is about the best thing that could happen in it -- they are the least ruthless of the sharks (as far as I can see) out there, and the business ocean ocean is full of lots of kinds of sharks.
Did you miss the word "likely"? Please show me the evidence that Y Combinator is unlikely to be less exploitative and I'll be happy to retract my comment.
Founder's feelings have nothing to do with it, feelings can go any which way, but past dealings where facts are revealed do not lie. The facts on China's deal making around the world have shown them to be shrewd negotiators and especially effective when making deals with less resourced countries (and normally gaining some strategic piece of infrastructure/land as a result). It's not that other people didn't do this (other countries have absolutely done this), but my comment was about another major recent investor in Africa -- China.
It's not a certainty that they will be particularly exploitative/shrewd/demanding this to African founders (though there is already evidence of some other industries where the recipients of grant money were less than thrilled), but I view that outcome as more likely because YCombinator has no such record at all. Are you positing that even with the past behavior the probability is still 50/50 between the two?
YCombinator's terms are very forgiving -- obviously there's some conversion here in terms of deal size and outcomes/pieces involved (YC is a very narrowly focused organization in comparison to most VCs). 125K for a 7% slice of what could be 0 is not a deal you're going to get from a random nation or bank (no matter where they are).
People cannot prove a negative or the "unlikeliness" of something. Comparing multi-billion infrastructure deals with an accelerator is ridiculous to say the least.
You're seriously drinking the kool-aid. Y Combinator isn't really that unique in what they give you, Tech Stars, 500, Imagine K12 (which is now a part of YComb, but before wasn't and had effectively the same deal), AngelPad and others have very similar deals to Y Combinator.
Not to mention in China they have programs (such as Chinaccelerator) very similar to Y Combinator that are - you guessed it - almost the same deal (6% equity for $100K).
I personally think Y Combinator is the best accelerator given its location and alumni, but let's not exaggerate. I doubt any of these accelerators exploit any of their alumni. Accelerators and Series funding are not the same at all.
I'm not asking for conclusive proof, just any evidence. If there was absolute proof or evidence to the contrary I'd like to see it an change my opinion.
> You're seriously drinking the kool-aid. Y Combinator isn't really that unique in what they give you, Tech Stars, 500, Imagine K12 (which is now a part of YComb, but before wasn't and had effectively the same deal), AngelPad and others have very similar deals to Y Combinator.
I'm not -- I'm not put YC on a pedestal, I have no desire to join it or apply to it, I don't live in SV, I merely browse this site and find interesting stuff here and enjoy the high signal/noise ratio. That said, YC has been running for a very long time, where do you think these other accelerators got the idea to charge what they do, and think the model could work? It's not a winner-take-all scenario (more companies doing what YC does is good) but thinking that YC is not differentiated from other players in this field is not correct.
Also, I meant that the offer is bonkers from the point of view of the world -- $125k is an insane amount of money by world standards to give out for a non-majority stake of an imaginary payoff that could (and often does) go to 0.
> Not to mention in China they have programs (such as Chinaccelerator) very similar to Y Combinator that are - you guessed it - almost the same deal (6% equity for $100K).
Right, but are they giving these deals to the African countries -- if you wanted to make the point, then a simple source where they gave a similar deal to an early stage african country under similar terms as YC would be enough to make me change my mind. I haven't seen this yet. When I check their portfolio companies page I don't see Africa as a location[0].
> I personally think Y Combinator is the best accelerator given its location and alumni, but let's not exaggerate.
I didn't think I was exaggerating.
> I doubt any of these accelerators exploit any of their alumni.
This is a pretty naive statement. Accelerators and VC at large do not exist on sheer good will, though there are some that show more good will than others.
> Accelerators and Series funding are not the same at all.
Going to ignore this, I didn't make this point. The claim that they're not the same "at all" is dubious in and of itself but is off topic.
As far as the demanding/shrewd/exploitative investor bit:
Sri Lanka:
- http://www.slguardian.org/2020/06/sri-lankans-feel-humiliate...
- https://biznakenya.com/how-china-took-over-sri-lanka-port/
Greece:
- https://apjjf.org/2017/13/Mathews.html
Ghana:
- https://www.dw.com/en/oil-promises-ghanas-dreams-of-black-go... (YT: https://www.youtube.com/watch?v=b58b-BvWEpo) -- it's quite difficult to find negative coverage of the Ghana deal right now, but this provides some evidence for the idea that some of the promises are not being kept and weren't as beneficial as Ghana may have been lead to believe.
Again, depending on how you look at these (which is often a result of where you stand in the global economy), these are just brilliant business moves -- advanced risk analysis and the right convincing of the right people in power and unfortunate conditions for the other side. YC is probably not going to take over a sea port because of back-payment, or similarly a bank that wanted to innovate and develop neo-bank style operations (as an example).
In general I think it's safe to say that YC will be more forgiving on the revenue-target/KPI target side.
Do you have any sources that disprove or show bias in the links to previous deals that I posted[0]?
I didn't even do an exhaustive search, these are just cases that I've heard of/seen/read something on until now.
It's hard to find the full deal information on the percentage stakes of various VCs by countries in African tech companies, but YC is open about that $125K for 7%[1]. Much of their organization is set up to be as transparent for founders and early stage companies as is possible. They are more forgiving than most other VCs in the US itself, and certainly more than banks in the US. this is a sweet-heart deal, giving entrepreneurs who were previously without access and opportunity an instant million dollar valuation. This is quite the sweetheart deal -- and YC does it's best to help the founders build their businesses very actively with some of the world's leading experts in those areas (again, the expertise you can only get from running something like YC).
How can a random investor from just about any other country (it doesn't even have to be China) be a more advantageous partner unless they were essentially positioning to purchase or absorb the company? It'd have to be quite a strategic partner to make this $125K/7% deal not worth it.
1) An article mentioning how China paid a substantial amount of Euros for a majority holding in the Piraeus port, when the European nations were squeezing Greece. According to Varoufakis, the initial deal was even better for Greece, which China investing a very risky 1.5 billion in greek bonds (essentialy Junk)
2. The second link dont mention China at all, it is just an article about the oil explotaition in Ghana and how it had presumably failed to bring the promised goods to the people in the villages where oil is prospected. Even if true, the promises are made by local politicians, not Chinese bureaucrats.
3) The SriLankan links is about how a journalist feel humilliated because China has been granted the lease of a SriLankan port after lendings up to 5 billion dollars have gone unpaid.
So these are the kind of links you are bringing to the table, multibillion dollar deals in China get some leases, and you are compariung them with 125k USD for 7% of the company. Last time I checked China does not own 7% of Greece, Sri-Lanka or Ghana, so I must conclude you are a dumb person letting his latent racism to take over or you are aware you are acting on bad faith and you just dont care.