You've got YC one-itis. There are a zillion other places to raise money. Any one funding source says no 98% of the time, it has nothing to do with you.
-a 55 year old founder who just raised a $20M Series A
As an older founder, it's easier to raise $20M Series A than as a younger founder. I'm pretty confident I have a much better chance of raising money than I did a decade or two ago. To be specific, I think I would have had almost no chance way back when, and I think I'd probably have better-than-even-odds today, if I tried (which I wouldn't; I'm committed to what I'm doing).
However, that doesn't mean places don't age-discriminate.
Truth of the matter is, I'd enjoy doing Y-Combinator at some point in my life, but I don't think it will every be possible:
- I don't think they'd take someone like me
- If they did, once you have kids and mortgage, you can't relocate
- If you do, once you have kids, you can't do the Y-Combinator lifestyle of 80 hour work weeks, sprints, and ramen
- The offer would be exploitative, for people with more senior backgrounds. Perhaps I can get by this, but 7% is a lot to give up for advising.
Y-Combinator: "We think that $125k is currently the right amount for founders to be able to run their company and pay expenses for around 5-6 months, and sometimes even longer" (https://www.ycombinator.com/deal/)
That's great for a grad student, but I think a lot of people read this to mean "no older people." I mean, I might be able to self-finance or raise capital, but founding team for $125k for 6+ months? That's delusional if you're out-of-school and have expenses.
The move to SFBA is a real issue, and an obstacle for anyone with family commitments. I'm not sure what they can realistically do about it, since part of the premise of the program is that you're benefiting from being physically proximate to them.
The rest of this, I think you're wrong about.
I'm at a YC company right now (Fly.io) --- technically, I'm a YC founder at Fly.io --- and I've spent the last several years working directly with YC companies, and I haven't perceived any distinctive "80 hour work week, subsist on ramen" lifestyle out of those companies. I know why people believe this about YC companies, and I think it's a convenient fiction YC itself sort of deliberately doesn't knock back, but I don't think there's much truth to it.
I used to think 7% was ludicrous for what YC was bringing to the table, but YC brings a lot more to the table now than it did when I thought that. There are cynical ways to look at the YC benefit and there are generous ways to look at it, but either way: if you're going to go on to raise more money, you're getting something significantly more than $125k for the share you give up.
I'd be more concerned about the "$125k for a founding team is ludicrous" thing but for the fact that for me, and for most of the people I talk to about this stuff, the alternative to YC is bootstrapping and consulting. If you're looking at the money YC gives you for the session as the entire financial permission structure for your company, you weren't going to succeed no matter who invested in your company.
To jump in for a second as the OP. What is also interesting about me is that I do not need a single dime from YC. I value their input enough that I would easily give 7% for a $1 investment. Part of being where I am is that I have secured myself financially to the extent that my thinking about YC as an option wasn't at all related to startup money. I don't need it. I own a quarter million dollar industrial-grade shop perfectly capable of manufacturing just about anything I need. What I can't manufacture directly I can get made through myriad industry relationships for almost nothing.
The primary value I saw in trying to enter YC was about driving the inflection point through a larger investment after self-funding everything up to and including getting product in front of prospective customers, booking some sales and demonstrating traction. At that point, I wanted to have both the financial horsepower and network available to push hard on the accelerator.
My prior experience taught me that being starved of cash is the single most difficult hurdle to jump over. I put over $300K of my own money into my last serious startup. That money went a long way because I was able to wear so many hats (and I was working from my garage).
The problem surfaced when I had to grow. I was starved for cash. It was as twice as painful as anyone could possibly imagined. The slope of your growth curve, at some point, becomes a function of financial horsepower. I mortgaged my home and pulled out another $250K. That helped, but it wasn't enough. Hardware is hard for a reason. You need cash, lots of it.
The inflection point started to appear in 2008, it took an indescribably effort and unimaginable personal sacrifice to get there from starting in my garage in 2001. At the peak I closed a five million dollar sale that was going to provide enough money to truly put the business on the map and displace multi-billion dollar market-leader companies from the segment we were in.
And then the economic implosion happened. Our five million dollar client defaulted on the contract. The company went from having an acquisition offer to the tune of tens of millions dollars on the table to being as close to bankruptcy as you can get by mid 2009. I almost closed another multi-million dollar sale that would have saved the business in 2010. In the end, the tail end of the financial crisis ended-up imploding that potential sale, and that was the end of it.
Life can be an interesting ride for entrepreneurs.
The problem isn't the offer, so much as the rationale behind the offer. It's perfectly possible to make a similar offer without being ageist:
* Grad schools do that. "Learn; we'll give you $24k per year as a stipend."
* YC could pitch the $125k, a for example, a means to improve inclusiveness and DEI.
* Etc.
That's not what they do. They say that the program is for founding teams for whom $125k will cover a half-year of expenses, at least. That means young teams. There's a lot of ageist copy from YC. That's why I assume I'm not welcome there.
Again, I'm (technically) a YC founder, I'm in my 40's, and I don't get that at all from the $125k number. If anything, I feel like I have an easier time with first-year startup expenses at this age than I did in my 20s.
My recollection is that $125k came about because when there was more money (and there was at one time) it was enough to tempt a non-trivial number of founders to fight over rather than build a company.
The problem, in so far as what I read on HN, was not three cofounders deciding to take the money and travel the world instead of building the company. The problem was that the founders who were interested in fighting over the money were distributed across many teams.
As for the realism of six months of expenses from $125k, thinking about it those terms is a signal that someone might not be a good fit. If it's a problem, it's a surmountable problem either through work (and luck) or through a willingness to fail.
> We usually invest $5000 + $5000n, where n is the number of participating founders (i.e. 2 founders get $15,000, 3 get $20,000), in return for between 2% and 10% of the company. The median is 6%.
Originally it was that low. Then it went up until it hit the point of creating problems. Now it is where it is which is lower than where it once was but much higher than it was before the peak.
The increases started I believe via an outside investor (maybe Conway? maybe Arrington? maybe not) agreeing to spread dollars uniformly across each batch's portfolio. There were also things like AWS credits. Basically, there were miscellaneous efforts to extend the runway.
As YC has matured, the efforts have become more organized.
It's worth noting that the lower investments originally were more commensurate with both the cost of living for a few months in the Bay Area and with the valuations of startups...Reddit sold to Conde Nast for about $10 million and sub-million dollar funding rounds used to be news on the front page of Hacker News.
> You've got YC one-itis. There are a zillion other places to raise money. Any one funding source says no 98% of the time, it has nothing to do with you.
I don't think you read my post. Or, if you did, you didn't understand it. What you are saying has nothing to do with what I said, what I think of YC or anything in my post.
Congrats on raising capital. I never have. It seems you have in the past. Which explains why it might have been easier for you. I have, however closed five million dollar sales with single international customers for the startup I mentioned I self-funded and launched from my garage.
Different paths in life. If it hadn't been for 2008 I would be telling a very different story today. That's just the way things go sometimes.
I would say "Done thinking YC is the right fit for me" could be more accurate.
Of course, now they've flagged the thread, so not sure if any of this discussion matters. Instead of cancelling the discussion, it should be actively promoted.
I am not accusing of YC doing anything explicitly. I think they make the right decisions when it comes to what you need in a young team in order to succeed. An example of this is the multiple founder bias. Right on point. Young people are just not equipped for the brutality entrepreneurship can deliver.
I also think that some of their process results in unintentional age bias. Asking for age is one example. Older founders might not need or want co-founders. And relocation is something might be impossible as well. As an example, in my case, I have full industrial-class manufacturing capabilities where I live. Moving to YC for three months, quite literally, means I would be far less efficient and likely get very little done. Or, I would have to abandon work on hardware and focus solely on software.
They didn't cancel the discussion; users did. I didn't flag this thread, but thought about it. It's got nothing to do with the validity of your argument. I'm in my 40s, am alert to ageism, and tend to think it's a real thing. But threads like this, where there's barely even circumstantial evidence in the story as presented (the whole story might be much clearer!) tend to be total shitshows as threads.
I think the bias towards founder teams is especially problematic. If I was trying to marshal a case that YC pattern-matches on 25-year-old top-school grads, I'd leave the solo-founder thing out. They're right about solo founders, and they're right along multiple dimensions. We can have a healthy debate about that, but all it'll do is muddy the waters about the ageism thing.
It sounds to me, given all the circumstances you've rattled off, the YC just isn't a fit for what you want to do. It wasn't at all a fit for my last couple businesses, either, and they did (/are doing) great.
That's precisely why being an older person helps. You have experience under your belt. If you're 55 and have never done anything, that's a strong signal to not invest in you, since you're unlikely to do something now.
20-year-olds are risks. 55-year-old have track records.
This doesn't make sense. What is "never done anything" supposed to mean?
I've worked with people in their 50s who have never raised money or started their own business but are incredibly capable with knowledge, experience and connections that would give them a massive advantage if they were to compete against younger founders.
It means precisely that -- if you're in your 50s, and have the experience of someone in their 20s, that's a red flag.
Good:
- You ran a successful business
- You managed a division at Google
- You were faculty at an elite university
- You were a management consultant at an elite firm, and build out a rolodex of elite connections
- You had a diverse array of jobs which give you a unique skillset for the startup at hand. For example, if you worked in a hospital, in China, and as an EE, you might be in a unique position to start a medical devices outsourcing firm.
Etc.
Bad:
- Spending 35 years as a SWE at a random company.
- A series of random jobs, with no coherence or anything of note (e.g. sales rep, admin, IT, etc.)
- ... and so on.
"incredibly capable with knowledge, experience and connections that would give them a massive advantage" means you can either get funding from a friend who knows you, or you probably want to find some way to signal that. If you haven't found a way to signal that in 35 years, odds are you won't be able to e.g. signal why someone should partner with you, buy your product, work for you, etc.
A 55 year old who is new to entrepreneurship should be viewed as analogous to a 20 year old, not worse. Track record should be evaluated without reference to age, there's nothing wrong with pivoting in your career. I thought maybe OP was reading into things too much (and maybe he is with respect to YC), but you're proving his point.
A fifty five year old has more track record upon which to form a judgement.
A twenty year old who can't find cofounders is more likely to be a positive outlier than a fifty five year old who can't. There are another thirty-five years of adult people skills there. If a person knows a cofounder would help but eschews finding one, it's not a strong positive signal.
I'm not sure that's true, a 20 year old is among their peers when trying to find a cofounder. I would expect it to be harder for a 55 year old to find a cofounder. I understand judging on not having a cofounder period, but age shouldn't come into it directly.
It's true an older person has more past, but if they were in a different line of work before there is only so much info that can be gained from it. It shouldn't be treated as a negative, at least not any more so than a fresh out of college kid is viewed.
At the end of the day it is quite literally age discrimination when you start making different judgements about the same measures (like presence of cofounder for example) just because of someone's age. To me that is clearly wrong. I don't have a problem with judging on factors that happen to relate to age (again like presence of cofounder), but however a particular person scores on that metric has to be taken at face value, not with reference to age.
No cofounders is a known problem when it comes to YC applications.
Finding a cofounder is not going to be among the hardest problems either will face.
It is not unreasonable to expect significantly greater resourcefulness from a fifty-five year old than a twenty year old when it comes to any particular problem.
Very self selective. You can't complain that your age is being used against you and then use other people ages who happen to be yours against them by gatekeeping.. if you haven't done x or raise y before my age that's a strong signal...
In the same manner your age is being used against you.. don't use it against others.
You know there are other career paths besides start up, right? Is it wasted potential for someone to be a doctor for 25 years and then decide they want to pursue some idea for a new medical device? Hell, I think certain spaces could use more entrepreneurs that have spent time on the ground first - edtech is a prime example.
I don't know if OP is qualified for YC but I'd hardly call the career he describes a waste.
Yes, of course. Indeed I consider parenting and friendships better metrics of success than career.
In terms of a snap business decision, the hypothetical fifty-five year old doctor who cannot get anyone to jump off the bridge with them is probably not worth making a bet on. Between friendships and personal relationships, nobody who knows them is willing to make a leap of faith. Or the doctor is unwilling to work with someone else.
If not having a cofounder was not a known problem, things would be different. But it is a known problem. A mature adult who cannot solve it doesn't get as much slack as a kid who can't. The kid is more likely to have extenuating circumstances. The adult not really.
I had a convo with an angel who was asking me (for some reason) for advice on breaking into the YC investor network.
The most surprising thing is that angels appear to be semi-excluded now. I don’t have anything more than two datapoints:
1. That angel who reached out to me
2. The fact that the YC investor demo day application explicitly excludes angels.
Of course, #2 is misleading. You can certainly submit an app as an angel. You just can’t fill out >5 of the fields, because they begin with “If you represent an investment firm…”
The takeaway for me was, ironically, there may be an opportunity for angels to band together and take some risks. YC is all about risk analysis. If they don’t want to risk it on a 58yo solo founder with satellites in orbit, perhaps others will.
But you’re right about YC one-itis. Right now it’s hard to see any alternatives. They do exist, though.
EDIT: By the way, a word to OP: don’t take rejection so hard. (http://www.paulgraham.com/judgement.html helps with this.) One of the key features of YC is that they invest in people who look like a good bet. As I was reading though your post, I couldn’t help but think that pivoting a few times may not be a good bet. It’s true that startups do pivot, but not having a clear idea of who your customers are is also a warning sign.
As someone else said, put some contact info in your profile. You’ll get dozens of people reaching out to you from this thread if you hurry.
Of course, you could be right about the discrimination aspect, which is different. In that case, rejection would be personal.
However, that doesn't mean places don't age-discriminate.
Truth of the matter is, I'd enjoy doing Y-Combinator at some point in my life, but I don't think it will every be possible:
- I don't think they'd take someone like me
- If they did, once you have kids and mortgage, you can't relocate
- If you do, once you have kids, you can't do the Y-Combinator lifestyle of 80 hour work weeks, sprints, and ramen
- The offer would be exploitative, for people with more senior backgrounds. Perhaps I can get by this, but 7% is a lot to give up for advising.
Y-Combinator: "We think that $125k is currently the right amount for founders to be able to run their company and pay expenses for around 5-6 months, and sometimes even longer" (https://www.ycombinator.com/deal/)
That's great for a grad student, but I think a lot of people read this to mean "no older people." I mean, I might be able to self-finance or raise capital, but founding team for $125k for 6+ months? That's delusional if you're out-of-school and have expenses.