Actually, he explicitly called pg a venture capitalist...specifically, he said:
"He’s a venture capitalist."
You can't possibly take that any other way.
"He’s a venture capitalist."
You can't possibly take that any other way.
From the front page of YC: "Y Combinator is a new kind of venture firm specializing in funding early stage startups."
In essence he's correct, but at this point it's just semantics.
No.
There's one very significant difference between a VC and YC. VC's invest other people's money. YC doesn't. VC's may also invest their own money, but this is incidental to their primary business, which is to assemble investment portfolios for other people to invest in. They charge a fee for this, and many VC's make most of their money from these fees, not from the returns on the investments.
This has real consequences. VC's are much more risk-averse than YC, because if they have a bad year it can put them out of business. (No one will want to invest their money in a VC which lost money for their previous investors.) If YC has a bad year they can just shrug it off, learn from the experience, and try again.
This dynamic also changes the VC's risk posture in another way. A VC has much more to lose from a loss than they have to gain from a really big win. If a VC has a really big win, most of the money goes to the investors, not to the VC. The VC's primary benefit from a Really Big Win will be that more people will want to participate in their next round of investments, which is nice, but that in and of itself doesn't make you a billionaire. So VC's are much more interested in avoiding loss than in going after a Really Big Win. YC, by contrast, has nothing to lose from a loss except the money they put in (which is not much), and a lot to gain from a Really Big Win (since they are the investor). This makes YC willing to take much bigger gambles than a VC would. It also aligns YC's interests with the interests of the companies they invest in, since the bigger the company wins, the bigger YC wins.
You don't need to have the latter to be the former. A VC can use their own money exclusively, and do so all the time. The professional VC's that manage pooled investments of other people are only a subset of the term Venture Capitalist.
That's why I'm suggesting it's all semantics.
Not really... http://www.bandangels.com/ What's the difference between YC and these guys? Maybe in the amounts invested.
Q: What does the Band look for in their initial review?
As with most venture funds, the Band seeks to invest in companies with a strong management team, unique technology and a large potential market.