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Comment by tptacek | Hacker News Reader

I would like to take this moment to announce PICPC-VC, which is an automatic follow-on investment, structured as uncapped convertible notes, of $50 available to any founder accepted into the PICPC program.

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Andreessen Horowitz will match your $50 with another $50.

Excellent. Not too long ago I asked a partner at a very well known VC firm if they would consider investing a small amount ($x00) in many "startups" to see if the founders would use the money effectively and follow up with a more serious investment if so. He looked at me as though I was asking sarcastically rather than sincerely.

I'm confident that these six new Pinboard/Ptacek/A16Z companies will have excellent return on investment.

Humor aside, there are many smart founders but being brilliant and being money-minded are orthogonal.

I wonder how much having any amount from a top-tier investor like a16z is worth (since you don't need to reveal the amount, at least initially, and once they're already talking to you...). Presumably that $50 is worth more like $5-10k, unless someone reads this thread.

Does that mean that recipients can legitimately tell the press and other investors that a16z is one of their investors?

Assuming that the recipient can keep a straight face?

EDIT: Perhaps having a16z as the only VC in your seed is a very bad idea. Chris Dixon (now a partner at a16z) cautions enterpreneurs against the risks of having a sole VC in your seed round:

http://cdixon.org/2012/04/02/revisited-big-vcs-investing-in-...

"I can think of about 15 founders I’ve spoken to recently who tried or are trying to raise Series As but are seriously hampered by the fact that a big VC invested in the seed round but isn’t participating in the Series A."

If our $50 participation hampers your A round, we will bridge you with another $15.

Then I'll kick in another $5 for a pier.

I would love that offer - care to make it official? http://lookapinky.com

pmarca: I think you're onto something here.

A large micro-investment portfolio.

Anything in this portfolio is sort of a tip of the hat from a16z, a micro-endorsement that messages: "we've got our eyes on this company."

Due to the reduced size of the round, the announcement can only cite investment from a1z.

oh, the LULZ! ;)

Shit just got real.

Yuri Milner will match with his usual $150K... because that how they print them US money in Russia

I guess people didn't get the joke! Atleast it should have ended here.

Heck, I will wager $37 that submitting your startup idea to HN will get you more exposure than posting on Pinboard's blog.

I'll match the $50 in development services from AbtainLabs.com as long as Ruby on Rails is used. Small sites could actually host on Heroku for free.

Are there any good "State Engine" packages for use with Ruby on Rails? I have been working in Javascript for the Windows 8 UI (and probably PhoneGap to make a quick Android port), but if it would help get the product done to go another direction, I am willing to consider.

Are you sure investing this much capital in young startups is wise? There is precedent for it leading to messy disputes.

I'm just the follow-on investor. The disputes are Maciej's problem.

I would like to take this moment to announce PICPC-VC-2, which is an automatic follow-on investment, structured as uncapped convertible notes, of $500 available to any founder accepted into the PICPC-VC program.

I like where this is going. The next step is $5,000, then we've entirely lost the plot.

Very Inception-ish. "We've got to go 3 funding rounds deep."

We're only up to $87 so far in my book. Pinboard and tptacek are legit; toomuchtodo has yet to show us credentials.

$137. pmarca seems legit too.

I'm being vetted as an "investor" on the HN comment board. Forgive me for thinking this situation is hilarious.

Already replied to this comment, but what the heck, I thought about what you said and had some more to add (since my original posts were "ha ha" funny, or at least I thought so).

I don't have startup credentials. My last startup was 10 years ago; I built a hosting company and sold it to a consulting firm for a couple hundred grand. I'm still in IT, so I clearly haven't made enough to cash out yet (I'm an IT operations lead; paid well, but definitely not F-you money).

I'll offer something better though; come to me with an idea I believe in, something that is going to change the world for the better. I'll provide free room and board for six months while you build it (my wife and I aren't great cooks, but practice makes perfect). If you get huge, awesome. I don't want any equity, I just want you to succeed. If it doesn't work out, head on over to a code school in SF that guarantees you a high five figure salary after your time with them.

I can't offer credentials; I can offer to give what I can to help someone reach their goals/dreams. The startup scene needs an airbnb.com for founders who don't need cash, just time and a place to live, and for people who are willing to host said founders at no (or very little) cost to help with their goals.

startupbnb.com?

I like this idea. How can I get in touch? (Email won't show in your profile unless you put it in the "about" section.)

At this point I'm out.

This much money, I mean... what would I do with it. I think I can build a sustainable business but I fear at this point that the sums involved are forcing me to give up too much control and to grow faster than will be sustainable. I have legitimate concerns that this will ultimately be bad for the company and that it's helping to fuel a salary bubble.

I wouldn't really be into it for the money, just the mentorship and publicity. $137 worth of mentorship and publicity.

I think he's already given me $137 of mentorship via his blog.

The going colo article a few months back is invaluable on it's own: http://blog.pinboard.in/2012/06/going_colo/

People seem to be missing the point. While the $37 is a gimmick, the reality is that this investment, in the form of advertising, is worth perhaps tens of thousands of dollars (I am not familiar with the intimate details of Pinboard's traffic, so I could be high or low on this). Google should adopt this model, since they have more advertising inventory than anyone and have the power to instantly propel promising startups to success. They could quickly obtain equity stakes in a vast number of startups that they deem to be promising, and throttle their "investment" based on analytics.

Can someone more in touch with corporate finance explain what an uncapped convertible note means for ownership and operation of a company? Serious question.

In overly simplistic terms:

That $50 would be converted into stock at the time of their next fundraising. Uncapped means there is no cap on the valuation at the time of the next round. So if one of the founders raised money at a $100,000 valuation later, the $50 investor would get 50/100,000th of the shares.

If it were capped, say at a $50k valuation - the investor would get 50/50,000th of the shares, regardless of the valuation.

Thanks! I'll reiterate obilgic's question since I don't know if your showdead is on: what is the ownership situation before, or in absence of, subsequent fundraising? Would a company be considered automatically split into some number of shares at some point?

Then it's typically a loan with a pre-defined interest rate.

A convertible note does not buy equity - thats what 'convertible' means - and 'note' means 'loan'. So it's a loan that can convert to equity based on certain conditions.

As I said, all of this is overly simplistic. It's just a 30,000 foot overview.

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