YC
Andy Bromberg - Startup Investor School Day 4
@ Y Combinator
03/09/18
Takeaways
YC
Y Combinator Cast
03/09/18
@ Y Combinator
Taxes can be a complex issue in angel investing, especially when there's an exit, as it often involves installment sales and determining your basis.
YC
Y Combinator Cast
03/09/18
@ Y Combinator
Qualified small business stock under Section 1202 can significantly impact your tax liability, so it's worth investigating.
YC
Y Combinator Cast
03/09/18
@ Y Combinator
Investing in billion-dollar companies can provide more resources to effect change in the world, even if your primary motivation isn't profit.
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Y Combinator Cast
03/09/18
@ Y Combinator
Anyone can access deal flow in investing, which is crucial because it provides options and choices for investors.
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Y Combinator Cast
03/09/18
@ Y Combinator
Even amateur angel investors can approach investing professionally by being organized, thinking about their portfolios, and recognizing that it's a long-term game.
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Y Combinator Cast
03/09/18
@ Y Combinator
The history of venture capital is essential to understanding current trends, as many patterns repeat over decades.
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Y Combinator Cast
03/09/18
@ Y Combinator
The cost to start companies has decreased significantly over time, making it easier for entrepreneurs to launch new ventures.
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Y Combinator Cast
03/09/18
@ Y Combinator
The availability of capital for startups has increased, leading to more companies being founded and more people trying to make a difference in the world.
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Y Combinator Cast
03/09/18
@ Y Combinator
The emergence of venture capital firms in the 1940s and 1950s marked the beginning of a recognizable venture funding structure, with significant returns on early investments.
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Y Combinator Cast
03/09/18
@ Y Combinator
The 1980s saw a boom in venture capital, driven by increased institutional investment and the realization of high returns in the sector.
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Y Combinator Cast
03/09/18
@ Y Combinator
The 1990s experienced a massive influx of capital into venture capital, with AUM skyrocketing from $12 billion to $220 billion in just four years.
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Y Combinator Cast
03/09/18
@ Y Combinator
The rise of convertible notes in venture funding, largely due to Y Combinator's influence, has changed how early-stage companies raise capital.
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Andy Bromberg
03/09/18
@ Y Combinator
The rise of convertible notes from 2005 to 2009 allowed startups to raise funds faster as the cost to start a company decreased.
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Andy Bromberg
03/09/18
@ Y Combinator
In the mid to late 2000s, more capital became available for early-stage startups, making it easier to start a company.
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Andy Bromberg
03/09/18
@ Y Combinator
After the recession in 2010, there was an increase in angel investors and seed funds investing smaller amounts, leading to seed rounds exceeding a million dollars for the first time.
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Andy Bromberg
03/09/18
@ Y Combinator
The JOBS Act and subsequent legislation significantly changed the early-stage funding ecosystem, making it easier for startups to raise money and for more people to become investors.
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Andy Bromberg
03/09/18
@ Y Combinator
The introduction of the SAFE (Simple Agreement for Future Equity) in 2014 marked a return to convertible structures, allowing startups to raise funds without the complications of debt.
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Andy Bromberg
03/09/18
@ Y Combinator
Initial Coin Offerings (ICOs) represent a new trend in early-stage fundraising, allowing companies to raise money online without traditional meetings with investors.
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Andy Bromberg
03/09/18
@ Y Combinator
Tokens in ICOs serve as an incentive layer on decentralized networks, allowing for trustless transactions without a central authority.
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Andy Bromberg
03/09/18
@ Y Combinator
Filecoin, created by Protocol Labs, exemplifies a decentralized solution for file storage, incentivizing users to provide storage space through a token model.
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Andy Bromberg
03/09/18
@ Y Combinator
The future of early-stage fundraising will likely continue to focus on liquidity, with tokens providing instant liquidity compared to traditional equity investments. The trend towards faster liquidity in startup investments is accompanied by an increase in secondary trading and more equity secondaries being executed in startups.
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Andy Bromberg
03/09/18
@ Y Combinator
Companies are becoming cheaper to start and raise funds due to advancements in legal automation and standardization, making it easier for investors to invest.
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Andy Bromberg
03/09/18
@ Y Combinator
Investors are increasingly able to invest in both equity and tokens simultaneously, with evolving structures in the ICO market reflecting this trend.
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Andy Bromberg
03/09/18
@ Y Combinator
The ICO market is currently a global phenomenon, with significant fundraising occurring in both Europe and the United States, reflecting the rapid growth of the cryptocurrency ecosystem.
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Andy Bromberg
03/09/18
@ Y Combinator
The relationship between equity and tokens in a successful token sale may blur, as the company's value could derive more from its token holdings than from traditional equity.
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Andy Bromberg
03/09/18
@ Y Combinator
The current trend in the ICO market is towards liquidity, but early investors may still be locked up for a significant period to ensure their support for the company.
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Andy Bromberg
03/09/18
@ Y Combinator
The ideal scenario in the ICO market is to raise enough money to launch a network, after which the network should operate independently without needing further funding.
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Andy Bromberg
03/09/18
@ Y Combinator
Many token companies may fail because they run out of money, highlighting the need for effective fundraising strategies to support ongoing development.
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Andy Bromberg
03/09/18
@ Y Combinator
The ICO market has not yet established effective mechanisms for stabilizing token prices immediately after launch, which could lead to volatility.