| I understand what you are saying and I agree that our visions are very different :) What would be your financial model? Bear in mind that I'm in Australia, so $20k - $30k to me might be something completely different to you. From my perspective, if you can't find $20k, you aren't serious about your business. Also, in my model, $20k gets you to a point where you have a business that you can market, run and start taking orders. AFAIK, YCombinator doesn't build you an MVP, or provide you hosting or do all the items on your start up checklist, so I don't think this is a fair comparison. As for valuation, at the point that you walk in with an idea and nothing more, I think your idea is worth about $1. Valuation at this stage is fairly meaningless. They are paying $20K at cost for the services I'm providing. I forgo making a margin on these services in exchange for 20% equity. So, in effect we share the risk. I reduce my risks by making sure I at least cover my costs. They reduce their risks by knowing they'll get to MVP stage without any hassles caused by their inexperience or lack of technical prowess. Maybe 20% is too much equity, I don't know. What I do know is that I want a potential piece of any large upside I might help create. That's my price for forgoing margin on the initial services I provide. Yes, for the model you envision the marginal costs should be low. However, you are looking at requiring a very long runway. How long do you think it would take before you start making money? You've got to include the time not only to launch your own start up but launch the first customer's start up that makes money. Considering a potential 90% + failure rate, you might be waiting a while. This is why I think you need to at least try and cover your costs. |