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by PaulDavisThe1st 1466 days ago
"on average" does not mean "most companies".

It could mean that, but in all likelihood it means that some YC funded companies make huge amounts of money for YC that sufficiently balances the losses that they keep doing it.

Ya know, like most investment (that works).
1 comments
scarface74 1466 days ago
That’s not how VCs make money. They make money based on “exits” either via acquisition or IPO. Over the last few years, most companies had exits without ever showing profitability.

Joe Bob’s Burgers don’t have the luxury of losing money hoping they can survive long enough to find the “greater fool” either via acquisition or IPO.

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PaulDavisThe1st 1466 days ago
> That’s not how VCs make money. They make money based on “exits” either via acquisition or IPO.

It doesn't matter. The only question for YC is whether they make money or not. They make money on some of their investments, and lose it on others. It's fairly clear that on average, that is, summed across all winners and losers, they make money overall.

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scarface74 1465 days ago
I’m not questioning YCs business model. I’m calling out the hypocrisy of people who say that “companies who can’t afford to pay their employees a livable wage and stay in business don’t deserve to exist” while many people here work for companies who are only able to pay their wages even though they work at non profitable companies because they are being propped up by VC funding.
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PaulDavisThe1st 1465 days ago
Well, in this you're seeing the result of living in a society that is responsive to the needs and desires of people with money and power. In this case, YC is an example of such people, and they've made the decision that what Overinflated Sense of Self's Startup is up to is potentially valuable enough that they'll fund it. OSSS has been judged "worthwhile" by enough money that for now at least, it can keep going.

On the other hand, Andy's Average Appetizers is of no particular interest to VC money, or any other money really, and so yep, they're going to go under because they don't anything that attracts enough money to make them viable (possibly at a higher living wage standard, possibly at current minimum wage standards).

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