Bullshit. As a YC alumni I can say this will have a <i>huge</i> positive impact on productivity.<p>Before: "<i>should I raise now? I'm supposed to wait for demo day but XYZ is doing it, maybe I should just raise a little to be sure? I'll just get 2 intros and that's it, promise.</i>"<p>After: <i>code code code code.</i><p>This is YC making sure their startups don't forget what matters: the product. Great move.
As I understand it, recent YC graduates were already almost assured angel funding because of the YC brand. So, in effect, investors were already using YC as a proxy for evaluating startups. Now they're just making it official.<p>I think the greatest impact of this deal is that now founders don't have to devote months of their time and energy to fundraising. Which means a few extra months to focus on building the company.
$150K will not make your startup succeed on its own. There were already companies raising larger amounts before YC started and this did not seem to hurt the "spirit" of YC.<p>I think the biggest effect this will have on the YC process is that more teams, especially those who pivot during YC or are building something very complicated, will choose to delay fundraising past demo day in favor of working on their product/trying to get traction for several more months.
Of course it won't. It simply means that YC start-ups now have a guaranteed bit of extra runway if they should need it and if they think the terms are favorable enough for them (they probably do if they think it through).<p>Nobody is standing there with a shotgun forcing YC companies to take this, it's an <i>offer</i>.
It's a very legitimate concern. From my personal experience, I think "being starved" is an important part of the experience, it prepares you for the long grind (unless your are the lucky few that grow gangbusters out of the door). I think the right amount of money is the key.
I think that this found will improve the chance for a startup to become big, because with this extra money they can focus on the product and have a bigger found for advertising. If YC dose this is a win win situation for them because the companies that they found will get a bigger evaluation from the start. So now they invest $20K (let's say) and get somewhere to 10% if they invest $150K and still get 10% the company is worth $1.5 mil from the start not $200.000 like in the current funding.
The only thing I'm upset about is that I put in my application yesterday and now the competition is going to skyrocket!<p>But overall I think this is great for YC, and great for their startups. It's everyone else that should be worried.