2) I'm not criticizing the idea of funding, I'm saying the amount is small. Google got either $100k total or $100k each from David Cheriton and Andy Bechtolsheim, depending on which article you read. Presumably they had their living arrangements already covered, so it could all go to the company and not to rent.
Even though computing resources are cheaper now, the bar is much higher, so if your project needs a cluster or significant bandwidth it's still expensive in relative terms.
1) A lot of things have the "potential" to work out, but you can only count the ones that actually do.
Besides, even a billion-dollar exit isn't "The Next Google". By Paul's own binary metric, that's still a failure. Let's say they owned 6% but that got diluted to 1/4th from follow-on rounds; their cut would be 15 million before taxes. They (Y Combinator) took $2 million in 2009 and then $8.25 million in 2010 from investors including Sequoia, so it's either going to be divvied up a dozen ways or has to pay back the $10.25 million first or whatever the terms are. Or maybe that's only for 2009 and 2010 startups, so it only has to be split between the 4 partners they had at the time (of funding Dropbox).
It's a win for the founder, but there are other wins that this model can miss.
Even though computing resources are cheaper now, the bar is much higher, so if your project needs a cluster or significant bandwidth it's still expensive in relative terms.
1) A lot of things have the "potential" to work out, but you can only count the ones that actually do.
Besides, even a billion-dollar exit isn't "The Next Google". By Paul's own binary metric, that's still a failure. Let's say they owned 6% but that got diluted to 1/4th from follow-on rounds; their cut would be 15 million before taxes. They (Y Combinator) took $2 million in 2009 and then $8.25 million in 2010 from investors including Sequoia, so it's either going to be divvied up a dozen ways or has to pay back the $10.25 million first or whatever the terms are. Or maybe that's only for 2009 and 2010 startups, so it only has to be split between the 4 partners they had at the time (of funding Dropbox).
It's a win for the founder, but there are other wins that this model can miss.
David Heinemeier Hansson at Startup School 08:
http://www.justin.tv/hackertv/b/259414909 http://www.youtube.com/watch?v=0CDXJ6bMkMY