Regarding the recent Techcrunch interview with Paul Graham, Partner at Ycombinator, an early seed angel investor and incubator that is covered in the kiko.com video segment previously: I do plan on extending this article in somewhat more depth, but the following is just my answer to the vitriol poured on Paul Graham by folks in the Techcrunch article comments.
Picking apart the overarching selection model and track record of a seed funder as innovative as ycombinator is just......eechhh....I don't have a word for it.
You can state your opinion, I would never stop someone from stating their opinion, but I have one, too. We need more Paul Grahams and Ycombinators.
Some of the longer and more pessimistic comments regarding Mr. Graham exhibit a quality of transparent jealousy that I haven't seen in a while.
Providing mentorship and seed funding to small teams working directly on their own code and prototypes is a laudatory, Johnny Appleseed model for the community of angels placing direct equity into very early stage teams. Getting there teams to a fully realized product, and driving on to further rounds of financing, however, will be celebrated by a subset of these fortunate seedlings.
A small direct investment in teams that do the work themselves, in an environment of innovation, is just like a greenhouse for great things of the next web.
I really get a kick out of the folks who pooh pooh Paul Graham and Ycombinator - picking out each venture and flippantly disparaging each startup like a Monday morning quarterback. feh on you.
This is what we need - the freedom for small teams to get the rent paid, buy food and office supplies, hire that one other team member - and this is what Ycombinator does.
To make a short-term assessment of the track record of Mr. Graham and Ycombinator is to narrow the scope of the issue of technology incubation, and completely ignore the viability and wider dispersion of great ideas that are fostered in environments like Ycombinator.
It’s not the top 40, it’s not all about IPO’s. It IS however about successful products, services, teams, and companies; the longer view should take into account the legacy and genealogy of the entire startup portfolio of a given angel investor, and the intellectual capital that is spun off - no matter where it originated.
In the final analysis, whether Mr. Graham is an investor or philanthropist can only be revealed at the bottom line of his personal and corporate financial statements. Traditional Institutional Investors have a distinct calculus for their placements of equity - these funds in various instances might be called failed philanthropists.
My central point regarding the enumeration of the ycombinator portfolio’s win/loss ratio is that such a model, fostered by a visionary, wealthy, and thoughtful angel investor, lends a quality of ‘breathing space’, for the flourishing of ideas that might not have a chance if left to the wiles of the typical VC.
I don’t think there is one here that would disagree that acquisition
is the penultimate goal of any technology based venture - that or
sustainable growth over the long haul. However, I stand by my core
premise that there are far too few like Paul Graham and Ycombinator.
One only has to walk down that tree-lined neighborhood in Cambridge MA, walk through the doors of Paul's incredible incubator of ideas, and breath in, deeply, that aroma of new and potentially great things.
Here's to you, Paul Graham, here's to you.