I almost applied for the $37. Then, by the time I typed out my email I realized how giving away your concept and plans for profitability with only a speculative offer for publicity and $37 dollars is a total rip.
Quoting the article: "By the end of the evening, he had upward of 40 applications, as well as offers to supplement each of his investments, to the tune of $50 apiece, from venture capitalist Marc Andreessen (of the aforementioned Andreessen Horowitz) and tech entrepreneur Thomas Ptacek."
I think this is great. Many ideas suffer from lack of publicity and not lack of usefulness. His own Pinboard took a long time to get noticed and to become the sensation it is. I offered to contribute $20 per startup, but I am sure that he is already overwhelmed with support.
The only problem with this is that he wants anything in return at all. If you take convertible debt (as he says) you must be 1) incorporated, 2) lawyered-up, if at all serious. Maybe the marketing he can provide is worth it, but I look at this as almost a statement/art project. From that context, it is just not going to make financial sense to bother with for a one-man show.
It looks like Maciej Cegłowski is trying to undercut Y Combinator! PG himself made the apology of this strategy in one of his essays. But Maciej should be careful because there is still room to undercut him.
Actually this isn't a bad model: If you use software to easily create syndicates, you could raise a few months, assuming you keep your burn at two guys in a garage.
Kickstarter meets angel.co
If you put money in the company, it's completely through standardized docs that say it is uncapped convertible debt.
So you can create rolling syndicates of people that each contribute $50 or $250 or $1250 dollars.
This is done publicly, and is a way for angels to signal mild interest in a company in a public way.
Conversion should not be triggered by an investment under $50K, to prevent the argument that the early investors bought equity at the same price as YC.
It makes the market for equity in startups a little more efficient.
Aren't we supposed to make a great and compelling product that makes each one of our customers pay us this $37. Why do we even need to do do all this rolling syndicated thingy?
Investment from anybody is a pain that is worth taking if you are getting a large amount in return. For the smaller amounts, working with customers is better on the pain-return axis.
Okay so people don't want to appreciate this guy. That's fine because it's nothing as big as it is tooted to be but let's also understand that he's not doing the tooting - and nor is he doing this to gain attention to himself... it's to a philosophy/policy that he wants to gain attention to.
1. He knows what he's doing. Only a fool would actually make this crazy idea so public.
2. $37 is nothing and he accepts it publicly so let's keep those "it's cheap, it's a spam, it's a joke, it's crap" comments to ourselves :)
3. It's not a speculative offer: at least, not after it's got so much public coverage and someone will be snooping around to see if he keeps his word. So $37 for focused publicity is pretty good.
4. In fact, he's doing a good thing. Most startups need nothing but exposure and connection with the right people. A few good men talking about the startup on their blogs gets a lot of good for the startup.
5. The part about convertible debt is going to be very debatable... and downright condemned but his investments in the form of time and contacts-expertise is going to be more than what a million-dollar VC would invest.
I thought the original concept was a satire of VCs and incubators meant to point out that you don't need a lot of cash to build a startup, you just need drive and hard work.
But now, it seems everybody's taking it seriously? For example, the comments on that Wired article are dead serious.
So I don't know if I'm the one who's missing the point, or if everybody else is…
Not as bad as it sounds. That works out to approx 180 packets of Ramen noodles. In theory you could survive for 90 days like with any other incubator, though you might come down with high blood pressure from all the excess sodium.
I agree with his argument that 37+publicity will be enough.
But the selection process is the most important thing in this bet, and should not be simplified, he should spend as much time as HN people spend to select their batches.
