Why Raising 1M$ ain't all that

[motherofone]

@givenallthings Its the peace of mind to build and more importantly the vote of confidence. Thats what the 1M is

 

[lillian2014]

@givenallthings YC invests $500K and expects you to have runway for about 2 years with it (regardless of if you raise seed). You’re saying you can only last about half that time with twice as much money?

The math ain’t math’in.

 

[ministerryan]

@lillian2014 Are they expecting you to not pay yourselves? Like 2 years for 2 people is $125k/year each and that's with no other expenses and no other employees, and that has to cover everything including all the stuff a company pays for that isn't salary - taxes, insurance, etc

 

[lillian2014]

@ministerryan If founders are paying themselves a 6-figure salary each, in a pre-pmf software startup, they seriously need to get their priorities straight. The only scenario you need to pay that high of a salary is when you’re having to outsource work as a non-techie (which I suspect is OP’s cause of high burn rate).

My cofounder and I are both technical and we are in biotech space, building our own ML model.

Our biggest cost has been buying the necessary hardware required to train our model locally. Our second biggest expense has been consulting with subject matter experts in biology.

All of that has been less than $25K, and our MVP is 90% finished. Both of us are building full time and also working full time to support our selves.

So yeah, I don’t buy the excuses for the high burn rate and something smells fishy to me.

 

[ministerryan]

@lillian2014 I don't think I could work full time and also do a startup full time, not without pretty seriously sacrificing on the full time job. Like possibly I could be a very shitty employee for a year and also work on a startup, idk. I have significant responsibilities at my full time job and I rarely work less than 40 hours at it.

$125k/person would not most likely amount to a 6 figure salary anyway

Is Y combinator really cool with giving money to people who's focus is divided in half?

If I were going to do a startup, I would want to be able to devote my full attention to it. I'd accept less than a normal salary, sure, by my normal salary is, uh, way way north of $125k

 

[gogonz]

@ministerryan Bro you are conflating that you are an employee. You are a founder. You don't deserve that kind of salary in the initial years of the founding. You just should take aa much as to survive.

Now that would be a different case when you don't believe in the product and is just willing to take as much salary as you can get. Show frugality to your employees and investors.

When Tesla was about to be bankrupt, Elon sold nearly every asset that he has to convince investors that he is all in on the business and that convinced Daimler to invest 10 million into the company.

 

[lillian2014]

@ministerryan

1. $125K is literally six figures.
2. Building a software company full-time and working full-time are not equivalent. I don’t need to work 40 hours to build a software MVP. I need like 25…over a month.