Yes I have the same question too. The $120k for 7% is meant for seed stage startups where $120k is a Big Deal.
If you already have $800k revenue each month, what is the math behind giving up 7% of your company, permanently, for $120k?
If you already have $800k revenue each month, what is the math behind giving up 7% of your company, permanently, for $120k?
pg wrote about it a few years ago: http://www.paulgraham.com/growth.html
Y Combinator has always been about business. That's the point of a startup: to build a successful business, not to build useless technology that no one wants.
For example, if you made $100 million MRR, then a "stamp of approval" for 7% is probably too much right.
I guess what I mean is, yes stamp of approval, alumni network etc. is great value, but at some point you kind of have to look at the math and say "well where do you draw the line". With 800k MRR already and growing, does it really make sense to give up 7% for stamp of approval
7% is a ton of equity, especially for a company that's already doing 800k MRR. You can do a lot with 7% equity of a company that has 800k MRR
For 7% of a 800k MRR fast-growing rocket, you can probably get multiple really veteran execs from your industry (healthy snacks in this case), each bringing on their own industry connections (e.g. to wholefoods etc).
800k MRR is 9.6million ARR, so even if you don't grow monthly, that's a lot of money. With that ARR you can probably raise much more than 120k with 7%. Every dollar counts in a startup
Maybe they did the math and it looks to be worth it. Or maybe when they joined YC they had $0 MRR and YC helped them get to 800k by graduation day. I can only guess with limited info from Techcrunch so my guess may not be accurate!
But if the genius already founded and is running a growing business at $800k MRR, then maybe she shouldn't pay the 7% entrance fee to get Harvard stamp of approval right
Stamp of approval is great. All I'm asking is, where is the line when cost/benefit makes sense. Can't be infinity right
I know personally asked to forego the Fellowship financial investment for a credit to Gigster to develop apps for my beta, of course that was ignored, but a deal I am sure any non-technical person would make any day of the week if they were serious about success.
> $800,000 monthly recurring revenue, too. Ohmygreen does 700 deliveries every month, but at its core, it’s a logistics company,
> Snacks ($21 per month per person)
Its totally possible that the major chunk of their revenue comes from just Amazon. Hence they want to expand to small companies (also known as scaling problem) hence YC would be a good fit. Twitch, YC etc etc can now order from them.