It feels like the amount given to incubated startups is creeping up, both in YC and now in TechStars, as the programs have gotten more popular.
Do people no longer feel that "the amount a graduate student makes for three months" is enough to actually start a company? Or is this more reflective of the market value rising for the amount of equity typically taken by a top incubator? If it's the latter, wouldn't there be a new opportunity for an incubator to give grad student wages to willing companies for a much smaller equity stake?
So you know how startups are a star search with returns dominated by whether you invest in Google/FB/etc? This is apparently pretty true for YC as well: the AirbnBoxen/Dropboxes will swamp most everything. Given that everyone is trying to invest in that one best startup this year, the prior valuations of "we guess the best starup will be in this pool" are pulling away from the generic "two guys with a gleam in their eye" ones, as a consequence of market participants reacting to YC et al being ridiculously better at picking winners than previous screening mechanisms.
One of the stated potential uses for the $100k is "help a team make a critical hire". I think this may be a result in part of rising market rates for quality developers.. It used to be a lot easier to get someone to come work on your startup for 1% equity + $30k salary than it is now.
The StartFund style money is entirely in play so investors can get in on "the next big thing". There's a pretty common belief that the next Google will go through a really good incubator on their way to world domination.
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It feels like the amount given to incubated startups is creeping up, both in YC and now in TechStars, as the programs have gotten more popular.
Do people no longer feel that "the amount a graduate student makes for three months" is enough to actually start a company? Or is this more reflective of the market value rising for the amount of equity typically taken by a top incubator? If it's the latter, wouldn't there be a new opportunity for an incubator to give grad student wages to willing companies for a much smaller equity stake?
So you know how startups are a star search with returns dominated by whether you invest in Google/FB/etc? This is apparently pretty true for YC as well: the AirbnBoxen/Dropboxes will swamp most everything. Given that everyone is trying to invest in that one best startup this year, the prior valuations of "we guess the best starup will be in this pool" are pulling away from the generic "two guys with a gleam in their eye" ones, as a consequence of market participants reacting to YC et al being ridiculously better at picking winners than previous screening mechanisms.
Yay capitalism, by the way.
One of the stated potential uses for the $100k is "help a team make a critical hire". I think this may be a result in part of rising market rates for quality developers.. It used to be a lot easier to get someone to come work on your startup for 1% equity + $30k salary than it is now.
The StartFund style money is entirely in play so investors can get in on "the next big thing". There's a pretty common belief that the next Google will go through a really good incubator on their way to world domination.