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Comment by manholio | Hacker News Reader

Probably flagged by readers who are tired of this drama (not one of the flaggers, btw). In the thread you were saying something like 'you can't find any reason why your ramen profitable start-up received such a tepid response from YC and you got the advice to come back with a co-founder' [other than the implied systemic misogyny].

Sorry, but that just not an acceptable response to a rejection. Startup accelerators do not exist to empower women founders, make the world a better place or other such grand idea, they exists to make money and you failed to convince one such accelerator that you can make money for them. It's as simple as that. Biases might affect their decision process, but that's a problem for their business, not yours.

Edit: here's the thread https://news.ycombinator.com/item?id=34267515

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Here's my original post, which doesn't mention anything about "empowerment" or "making the world a better place" or "implied systemic misogyny."

>> I've always been super curious about the YC application vs. accepted demographics. ESPECIALLY who gets told to come back with a co-founder. I applied as a solo woman technical founder with a product that is already close to ramen profitability. Going in, I thought this already made me an outlier - especially because I'll be able to tap my network and hire a founding team with some cash in the bank.

The tepid response during YC interviews was jarring. I know the panels are an exhausting marathon, but my group partners acted like they'd rather be anywhere else than talking to me. I got the impression that maybe I'd been invited to fill a quota, and the Zoom interview was just going through the motions.

The whole experience made me sit down and reverse-engineer the actions needed to hit 10-15k MRR by Q2 2023. With that amount of cash flow, I can reach out to angels directly. Just 6 angels in for 30k/1% party round is 180k @ 3M post.

If you're a woman with a similar story, I'm an angel investor (B2B, Saas, manufacturing). Reach out (email in profile.

Why would you need 6 angel investments, if you're offering angel investing to others? If you get 6 angels and give out 6 angels, you're just diluting your own stake to diversify into others' extremely illiquid companies that you have no control of.

You say you have $2m and $50k expenses. You can self-fund a 4-person team to get to PMF if you want to, without YC's $500k. But based on these 2 signals, you seem risk-averse and not actually willing to go all-in to your company. Personally, I'm a male and didn't get a YC interview for any of my YC applications, but I can't feign sexism over that.

This is a really good question, because it seems counter-intuitive to invest your money in other people if your own business needs funding. Here are a few motivations:

* When an angel invests 30k, I get value beyond the cash amount.

The angels I reach out to are founders with multiple successful exits, board members of other startups, and have 20-30+ years of experience. I get access to a fountain of wisdom and the person is motivated to answer my emails and take my calls when I'm stumped by a challenge.

I'm not good at EVERYTHING (who is), but I am proactive about getting help when I need it.

* A priced seed round sets the value.

Let's say you own 100% of a fine work of art, which you've priced at $10M. There's just one problem - only you value it at 10M, so there's no anchor for the real-world value. To get a return on your investment, you have to find a buyer that agrees with your valuation.

What if instead you owned 25% time-share of a work of art (this is a silly asset class, just using it as an example) that you and 3 other people price at $10. If you want to realize a return, there are now at LEAST 3 other prospective buyers that agree on the market value of your shares.

* There are more people like me out there.

I make angel investments in under-estimated Founders, because they're often overlooked by the pattern-matching lemmings in the institutional investment world. This isn't charity either; since a fund-raising round is similar to an auction, there are fewer investors bidding and betting on these founders. That gives me an edge.

I also tend to invest in "work horse" companies, not necessarily potential unicorns. Institutional investors have to chase unicorns that produce outsize returns, but I can participate in seed rounds that never raise after a seed or Series A.

There's a fund that follows the same thesis (https://tinyseed.com/) but I don't know of many institutional investors who make these kinds of investments.

* The best time to raise money is when you don't need it.

In the example I gave (6 x 30k @ 1% for 180k/3M post-money for a business earning 10-15k MRR), I have options for revenue-based financing and other kinds of debt.

Like I said, a fund-raising round is like an auction. If you have leverage or alternatives, you can command a higher price.

YC's startups get 125k for 7% + an additional 375k SAFE, which gets priced when you raise another round. If you sell another 15-20% on demo day, YC can end up owning roughly 20% of your company for 500k.

So, all I could think of during the tepid interview was "y'all want 20% of this business, but are acting like you're at the dentist." People didn't even introduce themselves (names) or ask mine. I know this wasn't intentional rudeness, it's due to application volume. The factory-farming way YC operates made me realize I could engineer better circumstances for myself and my business via an angel round.

Hope that all makes sense.

> If you sell another 15-20% on demo day, YC can end up owning roughly 20% of your company for 500k.

How will YC own another 13% if you only sold another 15-20%? That would mean you sold 2-7% for 60k - 200k at a 2.9m valuation, unrealistic. Seed rounds themselves will be 10% - 15%, $2-5m at a $15 - 50m valuation. Most likely they're getting another 1 - 3% for that 375k if you raise a standard seed.

I agree that YC could've got a lot more impersonal with the huge 500+ batch sizes these days. But I still don't agree that the "connections" you're making or making "more people like me" are important when you're spending the money you say you need by raising from your own angels. Raising from your own angels stands as important because you're getting cash for operations and advice, no brainer. I think there's a good reason why founders angel invest after series B+, when they're possibly able to pull liquidity to the tune of several million dollars, making the $50k angel investments trivial. It shouldn't be your focus right now.

Have you written anything about your investment thesis / approach to angel investing that I check out?

Nothing more than here. If you need $200k from angels, you don't have $200k to give out angel investing yourself.

If for you "invited to fill a quota" is not [very forcefully] implying systemic misogyny, then you are using the language wrong and will get many more rejections.

I don't think "systemic misogyny" fits here.

If YC is trying to interview a certain number of under-represented founders per batch (quota), then that seems like an earnest attempt to change their demographics.

However, after like 15+ years in the tech world, I've noticed that quota-based targets train people to tune out. I don't think that's misogyny, since it's a pretty natural reaction to check-out if you don't think your input will impact an outcome because there's a mandated quota.

Does that make sense? I'm trying to give you the benefit of the doubt here, but I don't think you're assuming good intent or approaching this discussion with the curiosity I've come to respect on HN.

I think the possibility that YC is discriminating against women is worthy of discussing. If they are, it would be beneficial for both YC and the world at large if they did something to address it. If they are not, it's still interesting and possibly valuable to attempt to figure out why the list looks like it does.

Sure, it's worth discussing. But it's just a bullet point on a very, very long list of arbitrary things accelerators discriminate for. Just look at those faces. Where are the New York mechanic or soccer mom types, or people with visible tattoos? What in God's name have they done with the elderly, tuned them into Soylent green?

You can see from a glance that is NOT a representative sample of the population, and that's based on looks alone. Let's not even mention things like the way you talk and present yourself, educational and employment background. God forbid you are one of those neurodivergent people - Google even has a cute word for those poor undesirables: lacking googliness.

Bottom line, entrepreneurship is just anohter political occupation that relates to power over other people. It cannot function otherwise than as an extension of power relations in society, because those relationships permeate the market and affect the businesses` ability to make money. Startup survivorship is so low and the pool of qualified applicants so inexhaustible, that an accelerator cannot but work to enforce those stereotypes and power structures: why waste capital on a militant atheist founder in a devout society if there is even the slightest chance some parts of the public will boycott their products?

And having a 80% of a full chance on account of gender is in this context a minor problem compared with a 0% chance of anybody that does not talk the talk investors expect for purely cultural reasons.

Well said indeed. We're finally getting back to the unvarnished truth, it's only returns on capital that truly matters.

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