[macksd]

Is it just me, or does it seem like an odd assumption that this hard-codes the value of the company to $2.5M-$2.7M? I would think they would have a percentage cut they target or a dollar amount they target, and the other variable is filled in based on their assessment of the startup's value at the time?

[fuzzfactor]

I think this is very realistic when technology risk is involved in a field that is always going to be capital-intensive, it's so different than software you've got to start with more.

But $400,000 is a lot of money so the confidence has to be there for all, that they will actually make enough progress before the money runs out so that it's comparable to what a more mature operation would have who is worth over $2 Million at least.

Even if the new venture is still ramping up and not yet expected to have marketable products, services, or IP yet, that kind of progress needs to be there or how could further investment be justified.

Basically it can be just one or two top performers actually capable of accomplishing a couple million worth of work, or building something that would otherwise cost almost $3 Million if given this type of opportunity.

OTOH you could get 10 to 20 contributors who each work with lesser resources but could still build equal momentum over a respectable runway.

If either of these or anything in between is built for $400,000 that's a good start for all.

In my field I could dispatch a calibration crew from a single reference instrument, or arrange with a preferred client to maintain theirs as a reference instrument and go labless.

Too bad Theranos ended up taking massive funding instead of you less-well-connected biotech entrepreneurs, so much real progresss could have been deployed instead.

[mattkrisiloff]

We want teams to feel like peers and not like we're treating some teams more favorably than others -- from my experience having worked at Y Combinator, I think creating a sense where everyone is equal is one of the many things YC has done really well.

[fuzzfactor]

I think there's also some opportunity for a community of synergistic biotech entrepreneurs to thrive overall under each different company's business plans where the workers from the ventures that do not have financial success will still have their talents be known quantities to the ventures that do take off, so without failure they could jump right in and become entrepreneurial contributors at a time when good people who can hit the ground running are needed most and hard to find.

[aripickar]

Early stage startup valuations are more or less worth the paper that they're printed on. Probably more cost effective to hard-code the valuation to the same number than to try and determine the value for each startup applying.

[tylerhou]

It's not uncommon for seed funding. YC offers $125k for 7%, which implies a ~$1.8 million post-money valuation.