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Comment by acecreamu | Hacker News Reader

Any investor would hate this idea, it's a terrible deal for them, and YC are smart enough to get it out of you. The whole business of VC is to sell later at the higher price. If they give you money at val of 5M+ and you sell for 2M - they are in loss.

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It's not val of 5M though? It's ~1.7M IIUC. 7% for 125K, an additional 375K can be invested though, with additional equity attached. Is that not right?

edit: Investors are also expecting to take a loss on many of the investments. 2M is one exit option, which still gives them +17% return on investment

I know that's not the standard type of exit YC are looking for, and I'm open to growing a bit more, but not as interested in taking additional investments. Final exit could end up being 10M for all I know.

I just think this growth at all costs attitude needs to change a bit with the current economy. I'd be happy to take $80K for a 7% investment also, but they have a standard deal which I think perverts the incentives and, frankly, leads to outcomes where they're pushing you to take more investment even if you could just have a sustainable business pulling in 10-30K MRR or something

The whole business of business is to sell later at a higher price.

In some businesses selling earlier at a higher price is also acceptable. It’s only the delivery that is later (or indeed concurrent).

Surely the majority of businesses are small, and are more about making profits every year, rather than selling shares?

I don’t usually see one-liner comments from you.

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