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Startups Can’t Survive On $20,000

Stashed in: 106 Miles, YCombinator, Startup Lessons, @paulg, business

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Brief but important post by a longtime YC watcher. Do the math, kids!

Essentially, YCombinator is an elaborate machine to sell young people to tech companies:

Within a year, the startup has burned through what little investment money they had just to keep up with the cost of living. The money has been spent on basically nothing but rent. If the startup took out loans like YC VC, then they also have debt. And so getting acqui-hired is one of the only reasonable solutions for a failed startup. Acqui-hires are a good deal for the acquiring company because they get an entire team of people they know can work together. The startup founders likewise get a fresh start and job security.

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