Venture Hacks — Thoughts on Adam Smith’s Letter to Graduating Y Combinator Companies

By At Work, Start-Ups, Venture Capital No Comments

Venture Hacks has great commentary on Adam Smith’s letter to Y Combinator companies.

Y Combinator is a mini-incubator that focuses on getting very early-stage companies access to seed money, technical and business advice, and other things that help raise the probability of getting to market.

One particularly enlightening part of the post included the discussion of traunching. While I don’t know the correct definition, it seems a lot of term sheets are written with the ability for an investor to re-price their investment later. That would suck…

"Tranches are generally stupid. They have zero upside and catastrophic downside.At best, tranches give your current investors a right to invest at
yesterday’s valuation if your company is doing well. If your company is
doing poorly, your investors will figure out how to get out of their
obligation to invest."

Link: Venture Hacks — Thoughts on Adam Smith’s Letter to Graduating Y Combinator Companies.

The Journey…

By Books & Learning, Start-Ups No Comments

Here’s an opening quote from Steven Gary Blank, taken from his book, “The Four Steps to the Epiphany“:

“All new companies and new products begin with an almost mythological vision – a hope of what could be, with a goal that few others can see. It’s this bright and burning vision that differentiates the entrepreneur from big company CEO’s and startups from existing businesses. Founding entrepreneurs are out to prove that their vision and business are real and not some hallucination; to succeed, they must abandon the status quo and strike out on what appears to be a new path, often shrouded in uncertainty. Obstacles, hardships, and disaster lie ahead, and their journey to success tests more than financial resources. It tests their stamina, agility, and the limits of courage.”

True, very true. What I’m finding is that although the path seems empty, there are a lot of other people walking (running, more like it) on the path. None of us are alone – and the road’s been traveled before.