Y Combinator putting on special event called AngelConf for would-be investors | Hacker News Reader

Y Combinator putting on special event called AngelConf for would-be investors

angelconf.com

101 pointspclark44 comments

This is a brilliant idea for YC. Having gone thru the YC experience and demo day, I would say that the scarcest resource for YC companies is that bridge between "just launched" and Series-A-fundable or profitable.

A lot of companies can be lean enough to survive this phase on their own, but a lot teams/projects are capital intensive (or slow to get revenue) amd need seed-stage help. There are precious few VCs that focus on this stage (True Ventures, First Round, USV, SoftTech, etc).

Not just for YC companies. I've gradually come to believe that the number of viable startups is more a function of the amount of angel investing going on than any other factor. VCs are useful in getting really big, but without angels startups don't survive to the point where VCs are willing to invest.

"Have you thought about investing in startups, but didn't know how? [...] How do you pick winners?"

Why not raise a side fund and do full fledged seed investing if you can pick winners?

These are the Glengarry leads.

Only for closers? Or are you referring to whether they are ultimately not the types of investors you would want anyway?

If the latter, (a) anybody willing to give you money now is someone you should consider, (b) if you look at people who are considered sophisticated now, they all were considered unsophisticated at some point.

Can someone explain what this means?

It's a memorable line from a monologue delivered by the Alec Baldwin character in the movie 'Glengarry Glen Ross'.

[scene] http://www.youtube.com/watch?v=y-AXTx4PcKI

[transcript] http://www.whysanity.net/monos/ggr2.html

(Language is NSFW... unless of course your workplace is like the one in the movie.)

A more modern, work-safe version from SNL:

http://www.hulu.com/watch/3362/saturday-night-live-glengarry...

I'm hoping someone is going to post videos (if permitted).

Justin.TV just agreed to webcast it.

Good idea! This seems like the type of thing that will really help stimulate the economy and help liquidity start flowing again.

I think its really great of YC to run a free event for this stuff - kudos to them, and good luck.

Well, of course it's free. They're trying to beef up the angel market so that YC companies have more options to turn to.

For YC it naturally makes sense, to the extent that it's possible, to be the hub for early stage investors and entrepreneurs.

Probably not all that much, in the big picture, where billions of dollars are the order of magnitude that things seem to be happening at, but it's cool to see in any case.

I dunno - the logistics of investing are hard and the sample documents are just a start. If you give people step-by-step directions and access to the right professionals, you may very well see a demonstrable increase in angel investing.

Things like this are why the Valley's so important. You'd think someone somewhere else would have done this, but noooooo. You just know that if someone else had done this, they'd have tried to make a buck on it. This is a completely altruistic move on YC's part - hell, they're setting up additional competition for the YC program.

Oh, I agree it's really cool and all, but compared with job losses in the 10's or 100's of thousands... I'm just not sure that it'll make much of a difference in terms of "help stimulate the economy and help liquidity start flowing again".

But that's no argument against it, or saying it's not important; just that perhaps getting a few more people investing is not going to fix the economy overnight.

Sure, but if we got funding, what would we do? We'd hire people.

So the way to figure out whether that means anything at a large enough scale to matter, is to look at how many angels might invest how much money. I honestly have no idea, but here are some random numbers:

10,000 investors invest 10,000 dollars each is 100 million dollars. You could vary that to 1,000 investors doing 100,000 of investment each. 1,000 investors each doing a million dollars would be 1 billion dollars. What relationship do those random numbers bear to reality? Has YC even spent a million dollars on all the companies involved? And there are several people investing in YC, so I think it probably comes out to less than a million a head, and they've been doing this for a while now.

The real impact of startups is not likely going to be in hiring in any case, but still, it's worth looking at some numbers to get an idea of the order of magnitude that we're talking about.

For the first part of your math, YC has spent at least 1.5 million (~300 founders * 5000). Team sizes vary, but if we hold them at 3 members, we get another half mil. So by my very back of the envelope calculations they've invested about $2 million.

~250 founders of 102 companies: http://www.youtube.com/watch?v=JHlj3xKyChg

We need to add another 100 ghost founders to account for the extra $5,000, so that makes it: ~350 founders x $5,000/founder = ~$1.75 million invested, so far.

Y Combinator has (I personally believe, but do not necessarily know to be true) additionally sunk capital investment into:

  * Beans and rice
  * A building and associated land in Boston
  * A building and associated land in Mountain View
  * Utility bills
  * Travel expenses
  * Legal fees (including 102 incorporation-fee packages)
  * Accounting fees
  * Misc.

~350 founders x $5,000/founder = ~$1.75 million invested, so far.

Was there something incorrect, or otherwise objectionable, about this comment?

But not a statistically significant number. Fred had a great post on this, "Twenty-Two Years Of Job Creation Wiped Out In One Day"

http://www.avc.com/a_vc/2009/01/twenty-two-years-of-job-crea...

I don't think it'll make much difference now, but I wouldn't be surprised if a program like this is the catalyst that sparks the recovery a couple years down the line.

Most hacks take a few years to really show their impact, but somebody's gotta do it, or we'll be in a depression forever.

I think the effects of a few more people investing are probably minimal compared to N * 100 billion dollar stimulus package kinds of things, GM going into bankruptcy, etc... (Whether you view the effects of that as positive or negative).

That doesn't mean it won't lead to good things, I'm just skeptical of a smallish conference in terms of "saving the economy". I don't think that's really it's purpose in any case.

Probably not all that much, in the big picture

http://www.wired.com/science/discoveries/news/2007/09/dayint...

That's my point, exactly - it'll likely take years for anything getting angel funding now to have much of an effect on the economy. Google isn't even in the top 50 list of US corporations, according to the Forbes 2008 list.

It bears repeating that I'm not knocking what you guys are doing - quite the contrary, I think the best thing most of us can do is just do what we do, well, and hope for the best. I just don't think that your conference will do all that much to get the US economy going again, nor should it be expected to.

Edit. Whatever, people, if you think that PG and company are going to single handedly have more of an effect than billions of dollars in taxes or tax cuts or infrastructure spending or GM failing or more banks going under, or China selling their dollar assets, or whatever, you're welcome to your beliefs, I'm done arguing the point.

No one ever said that this would have a greater effect than all that, just that this type of thing, along with Mark Cuban's latest offer, will help small businesses and startups get off the ground in a time when getting any type of loans through traditional outlets, banks, is nearly impossible. I was meaning to be vague as to not spur any economic debate, sorry.

I think perhaps you meant to qualify your statement by time rather than space. I.e. "not much in the short term" rather than "not much in the big picture."

Certainly - if we have to wait until some company currently getting angel funding is big enough to hire up all the fired auto workers, we are really screwed:-) I think what you guys are doing is awesome, but think that it's basically impossible to predict much about long term effects: some YC company might create a system that saves the newspaper industry, or they might create the final nail in the coffin. Who knows... you (the generic you) just have to get out there and try and experiment and do your part.

I sure hope that this isn't a one time event. If this gets popular, raising funding will get easier for all of us.

The big question is whether this event is for accredited investors only or not?

My means don't allow me to invest much money at all (say $5K), and I am not accredited (I wish I was of course). So I'm like an amateur in the game but very interested. I can't tell if the event is for me or not.

If you aren't accredited and you are investing in a company, a lot of times you are doing them a disservice. Have you read up on the consequences of taking on non-accredited investors?

I'd love to be an angel investor, too-- but if you can't pass that particular test, you really shouldn't be in the game.

And, honestly-- $5k isn't worth the cost of the legal paperwork necessary to take you on as an investor.

If you want to be in the game, try to get an advisor role with a tiny sliver of stock.

Do you have to file some paperwork to be officially accredited, or is simply meeting the wealth or income criteria sufficient?

The precise definition is at http://www.sec.gov/answers/accred.htm

Either you are, or you are not. There is no paperwork or exam (is that constitutional to seggregate based on wealth?)

For most individuals, the requirement is:

a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000

a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million

I'd love to finally know how to tell if a startup will succeed! Please post the knowledge afterwards.

So what kinda people are you looking to attend this event. I'm interested, but i'm a developer. Nevertheless, i don't mind or wouldn't mind helping someone else out in the hope someone might do the same for me one day. Make sense? I have zero accreditation in investing.

> March 5 2009, 1:30-3:30

You're going to get through that whole program in two hours?

Can I get an invite. :D

any confirmation this is an official YC event?

You can do a whois on the domain name. It's registered to a Paul Graham. It was reported on TC. So either it's real, or an elaborate ruse to kidnap a bunch of wealthy people.

Why can't it be both? :)

Besides that, it's pretty obviously PG written copy.

It is official

Fundraising 101 brought to you by Lil Wayne:

"Start with straight shots and then pop bottles. Flirt with the hood rats and then pop models."

Translation:

Do a few startups, then build a Google. Talk with the angels, then do series A with VCs.

Citation: http://www.youtube.com/watch?v=iQ3I4YY4YJA

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