Khosla Ventures is joining the YCVC Program

http://blog.ycombinator.com/khosla-ventures-is-joining-the-ycvc-program

by dshankar • 13 years ago

92 35 13 years ago

blog.ycombinator.com

mathattack2• 13 years ago

Great to see them involved. I'm curious about this model... At what point does the overhead of following so many companies become prohibitive relative to the small amount invested? I suspect this could be why Milner left.

I don't have much (any) data on this, and no professional stake in this. I'm just fascinated by the YC model in general, and by a way of "buying the market" for emerging companies. (The closest thing to an S&P for startups) That, and I'm tired of arguing about unions on the other thread.

karamazov2• 13 years ago

The YCVC investments are a fire-and-forget portfolio investment; VC's usually don't follow the companies directly unless they put in additional money.

mathattack2• 13 years ago

I see - thanks! So it really is like an index, but of options. One or two will hit, and when they do, it's time to pay attention. I've heard stories of universities that seed firms with a Fire-and-Forget mindset, and then finding out after the fact that someone has a bunch of valuable contracts in a filing cabinet.

off-topic - I'm a fan of what your company is doing.

midas0074• 13 years ago

http://ycombinator.com/ycvc.html

wellboy2• 13 years ago

Curious as to why he left, since each of his $80,000 investment is a "guaranteed" 30x return, if we take his investment at a $800,000 valuation and the average valuation of a YC startup of $23.7M.

pbreit3• 13 years ago

Aren't YCVC investments safes (nee notes) which have recently been averaging around $5m caps? 4-5x still pretty good.

outericky2• 13 years ago

Yuri wasn't the sole investor in the YCVC notes. At least not each batch.

delinquentme• 13 years ago

The report makes it sound like Milner is out of investing in YC? Or just the seed stage?

outericky2• 13 years ago

Just the YCVC portion I'd guess - which is the "guaranteed" investment into all YC companies when they start YC. That's not even seed stage. That's just YC stage...

nodesocket• 13 years ago

Interesting, curious if Yuri Milner was not seeing returns on the YC seed investments and decided to withdraw.

Harj• 13 years ago

It generally takes at least five years for a seed investor to have a clear picture of what kind of returns they can expect. Yuri's smart enough to know that and he started doing this just under three years ago.

rdl2• 13 years ago

Interesting that SV Angel ducked out when it became YC VC, and now Yuri is out. a16z is the longest running current member.

lquist2• 13 years ago

I never understood Yuri's involvement. I always thought his investment philosophy was to enter at the Series B or later stage.

On another note, here's a recent anecdote (the plural of anecdote is not data!) about Khosla Ventures. A successful entrepreneur ($300M exit under his belt; CEO of $5B company) was in advanced talks (post-term sheet) to raise funding from them. Out of the blue, Khosla came back with a list of demands such as adding a 3rd co-founder. Obviously just one situation, but left a bit of a bad taste in my mouth.

rdl2• 13 years ago

DST investments in YC seed stage are probably less than Yuri's property tax bill on just his Bay Area house. If it made it easier to get into any good Series B deals, doesn't that make it worthwhile?

lquist2• 13 years ago

Does it really make it easier? If DST knocked on the door, I know I'd answer. Well, if I was looking for funding ;)

pg2• 13 years ago

It's true Yuri is mainly a late stage investor, but for a while he experimented with earlier stage investments.

tptacek• 13 years ago

Serious question: why did you bother with the press release structure for this post, complete with the (pointless) Rabois quote?

pg2• 13 years ago

YC has gotten bigger. I don't write everything myself anymore, and other people may feel they can't take such liberties with formats.

marcfawzi• 13 years ago

Ah. Is Khosla Ventures related to Vinod Khosla? The same guy who sealed off a popular surfing beach in a small California town and declared it as his own? I always found that to be a terrible reminder of how money, greed and selfishness go hand in hand. Never mind me.

pbreit3• 13 years ago

Pretty off-topic but: http://www.mercurynews.com/breaking-news/ci_24380282/vinod-k...

I'm not sure it was that popular or that Khosla declared it as his own.

dkl• 13 years ago

Yes.

Buchwald based his decision on the 1848 Treaty of Guadalupe Hidalgo, which settled the Mexican-American War, and required that the United States recognize Mexican land grants as long as the owner filed a claim. The original owner of the coastal property filed such a claim. The U.S. government challenged his land patent, but the U.S. Supreme Court confirmed his ownership in 1859 -- 14 years before the California Constitution was first drafted.

I can't make head nor tail of this.[1]

EDIT: OK, this[2] is clearer:

The judge's ruling skirts the fundamental conflict between the rights of private property owners and the rights of Californians to access the shoreline. Instead, Buchwald rooted his decision in the land's history during the mid-19th century. Since there was no public easement attached to the property at the time the United States acquired California from Mexico, the judge reasoned, the question of whether the California Constitution now guarantees access to the beach is immaterial.

The original owner of the property was Jose Maria Alviso, who received a provisional land grant from the Mexican government in the late 1830s. He later transferred the property to his brother, Jose Antonio Alviso, whose rights to the property were upheld under the 1848 Treaty of Guadalupe Hidalgo, which settled the Mexican-American War. The U.S. government challenged Alviso's land patent, but the Supreme Court confirmed Alviso's ownership in 1859.

[1] http://www.nbcbayarea.com/Vinod-Khosla-Can-Keep-Public-Off-B...

[2] http://www.mercurynews.com/breaking-news/ci_24380282/vinod-k...

midas0074• 13 years ago

Also: http://www.surfrider.org/jims-blog/entry/vinod-khosla-beache...

midas0074• 13 years ago

Wealth doesn't make automatically turn someone into an asshole (plenty of counterexamples). It does wreak havoc with one's social life and bring people out of the woodwork.

nashequilibrium2• 13 years ago

I have noticed a trend on HN whenever Vinod Khosler is mentioned, there seems to be a lot of hostility towards him. Is there any concrete examples of them doing shady stuff? I am just curious.

guptaneil• 13 years ago

This trend isn't limited to HN. When talking to people (even lawyers and such who I know do not read HN) that have dealt with Khosla, I have repeatedly heard that he is shady, but I have yet to hear any concrete examples. From everything I read about him on TechCrunch and elsewhere though, he sounds like a great investor to have...

midas0074• 13 years ago

See the shoreline access issue below. To me, that whole matter signals someone impossible to work with. If he were of decent moral fiber and wisdom, he would have found a workable arrangement that preserves public and personal interests. Going to trial was just even more embarrassing.

arikrak2• 13 years ago

You can see reviews on thefunded: http://thefunded.com/funds/show/Khosla+Ventures

nashequilibrium2• 13 years ago

Wow rated 2.8, I was not aware of this website, but these reviews seem really problematic for startups accepting money from them. By accepting this partnership with them, is Paul Graham kind of vouching that these guys are actually good for startups? I wonder if a startup could refuse their money, but then again there are so many startups, it may be hard to take the moral ground.

jgalt212• 13 years ago

FWIW, Vinod's mom thinks he's a splendid human being.

codex• 13 years ago

How does YCVC work exactly? YC invests in startups directly already, so why bring in unnecessary partner money? Is it that the YC front runs the investment and the YCVCs are allowed to come on board slightly later at worse terms? If so, that's a good deal for YC, and even if the IRR doesn't work out, the VCs are paying for access to a pool of potential deals. If that's the case VC churn doesn't send the best signal.

Khosla Ventures is joining the YCVC Program

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