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PG hacked the VC system so he didn't have to be a dealmaker. YC has standard terms so there's no haggling on price, pro rata, board seats, or anything else. They've automated a lot of what they do via software and their network. And because of the content they put out and the reputation they've built, founders from all over the world come to them and accept much worse terms than any normal VC would offer.

I was peaved until I got to the last phrase. Well written.

When the deals go away because the contract is standardized and non-negotiable, it's because the dealmaker got more powerful!

The big question is whether this leads to better overall outcomes.

If the company fails, or is aquihired by the skin of its teeth, it doesn't matter which terms the various rounds offered when.

YC is perceived as offering a greater chance of success, a combination of being plugged into a large network of alumni and having the halo effect which comes from getting into a cohort.

As long as that perception is there, founders will keep taking the deal. If that perception is accurate, then they're smart to: and the terms aren't worse than any normal VC would offer, they're better.

So there's a lot riding on that being true, which I have no special insight into. Having to guess, I suspect it's less true than it used to be.

The terms are worse in the sense that they're at a much lower valuation than most VCs would offer, not that it wasn't a good deal for the startup. Almost every YC alumni I've talked to believes it was worth it.

"...a combination of being plugged into a large network of alumni and having the halo effect which comes from getting into a cohort..."

But that's exactly what a dealmaker does, right?

After reading some of his books, essays and hearing people talking about him, I think Graham is first and foremost a nerd and hacker, the other stuff is secondary. At least that's how it looked before the last couple of years, his view on things seems to have slightly changed recently, so not sure anymore actually.

He certainly started that way; his Common Lisp stuff is interesting, although I don't usually agree that it's the best approach. But as far as I know, the only technical thing he's done since selling Viaweb is ... this forum. You apply to YC for money and for contacts---exactly what dealmakers do.

He's done internal software to manage YC.

YC itself was born out of an attempt to hack the hack the VC funding system. Shift things to be more friendly to technical types.

So it was an attempt to improve a complex system as opposed to focussing on making deals. Systems focussed instead of people focussed.

Is there really that much custom software needed to manage YC? As opposed to the Excel spreadsheets that most investment banks operate with?

There is; you'd be surprised.

I think the idea is that some people are naturally dealmakers, and the whole idea of YC was technical-minded people taking over the job that would normally be done by social-minded people and doing it better.

Same with artists; the ones who became famous or at least successful in their lifetime were good at making deals. And self-promotion. The ones who could not fit in socially, not so much.

Nerds didn't spring fully formed with the invention of the transistor - they have always existed in various forms throughout history.

But it has also been true that moving to a dealmaker provides more impact, especially once you get past a certain point.

He worked on this for several years after leaving YC:

http://www.paulgraham.com/bel.html

Not sure how that doesn't count as technical.

I think "Hackers & Painters" was after ViaWeb as well, a book I'd consider technical. I'm sure there are more technical things he been doing since ViaWeb also.

They said as far as they know. More likely they never heard of it.

Whatever happened to Arc?

It's doing fine and is happy powering this site.

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

Yeah, given that we're talking about the guy who wrote "On Lisp" I think it's fair to say he has technical credibility.

He may be a dealmaker these days, but that doesn't take away that he is a luminary in the nerd community.

Agree.

”There has never been a better time to be a nerd. In the past century we've seen a continuous transfer of power from dealmakers to technicians — from the charismatic to the competent — and I don't see anything on the horizon that will end it.”

I think the continuous transfer is in nerds learning how to be dealmakers, not in some magic power shift to nerds.

George Westinghouse was an inventor. So was Thomas Edison. You can think of both as “fierce nerds” in my book.