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Why Does Your Company Deserve More Money? by Michael Seibel
4 segments available
Michael Seibel is a partner and the CEO of YC. He cofounded Justin.tv, which was in the winter 2007 batch and Socialcam, which was in the winter 2012 batch. https://twitter.com/mwseibel In this video Michael comments on his essay Why Does Your Company Deserve More Money? https://blog.ycombinator.com/why-does-your-company-deserve-more-money/ The YC podcast is hosted by Craig Cannon - https://twitter.com/craigcannon *** Topics 00:00 - Why Does Your Company Deserve More Money 1:00 - A team, a product, and an office are all just a means to an end 2:00 - If you don’t really deserve money, what is an alternate path to create leverage? 3:45 - Breaking even at Justin.tv was a moment of infinite clarity 6:00 - Series A program and leverage
Segments Timeline
The Tough Question: Why More Money?
Michael Seibel discusses the challenging conversation he often has with founders who have spent their initial funding without achieving product-market fit. He emphasizes the importance of justifying the need for additional funding and highlights the misconception that having a team, product, or office guarantees success.
"why does your company deserve more money sometimes the hardest conversation I have to have with the founder is when they've spent their 1 to 2 million dollar angel round but haven't found product mark..."
Finding Alternatives to Funding
In this segment, Seibel explores alternative paths for startups that may not deserve more funding at the moment. He stresses the importance of cutting burn rates and achieving break-even as a more viable strategy than seeking additional investment, especially when product-market fit is still elusive.
"then sometimes founders once again sometimes founders kind of cargo cult like me they think oh well we've we have this team we built a team right we have this product right got a cool office yeah we h..."
The Clarity of Breaking Even
Seibel reflects on his experience with Justin.tv, sharing how reaching break-even provided him with clarity and confidence. He explains how operating on investor funds can lead to a focus on pleasing investors rather than users, and how achieving break-even shifts that focus back to generating revenue from users.
"in like manner in the starway justin.tv like i sometimes i just think of justin.tv i just had myself completely fooled like literally I just can't like I was out there pitching a site that like the ha..."
Leverage in Fundraising
In this final segment, Seibel discusses the importance of demonstrating business leverage when approaching Series A fundraising. He highlights how YC helps companies prepare for fundraising by focusing on revenue generation and sustainable growth, emphasizing that a solid business foundation makes for a compelling pitch.
"man the in the fear went away yeah it's like this isn't gonna die tomorrow like well you have confidence and then all of a sudden when you look at the other side of the table now you have a product th..."