Startup Offers Failed Entrepreneurs A Million Dollar Signing Bonus - SFGate
Gregory Alan Bolcer stashed this in Failure
I don't get it:
A startup called Twice is offering a $1 million cash and equity signing bonus to anyone who launched a startup through accelerator programs Y Combinator, 500 Startups, and TechStars and now needs another job.
Is your read of this that they're only doing this for one team, so anyone who wants to compete they'll have a little bake-off to figure out which one team to acquire?
Because my read of it is that they're acqui-hiring anyone with that background.
And also, what's the woman in the picture got to do with it? SFGate, what the dilly, yo?
I think Nicholas Carlson (at Business Insider, where SFGate grabbed this from) misinterpreted the Twice press release in his lede/headline, aided by a poor choice of words in the release.
From the release, it seems more likely this is a $!MM *fund* for the purpose of acquiring such companies (as a portion of Twice's recent $4MM raise). The offer to a (likely moribund) company isn't $1MM.
I suspect they'll pay YC's liquidation preference, the note to Milner, and then some consolation signing bonus to the team. (That's an outlay of less than $200K/company.) Then, give the team salaries and new option packages at Twice.
With this interpretation the 'fund' could be used to acqui-hire up to 5 down-and-out accelerator graduates. Maybe they'll be more generous with cash and pick up fewer; maybe they'll be more generous with equity so YC or any other early angels in the companies have some stake in Twice.
It's a nice PR stunt that fits with their market -- "secondhand ecommerce startup picks up secondhand teams at an unbeatable price" -- and will get them some consideration from any struggling accelerator team even if none ever take the offer.
Yeah, I know it was a little bait-and-switch, but from the acquiring company, still an interesting way to get a cheap, semi-vetted team.
I would think the more and more these offers sprout up, it will hurt the quality of YC. Since YC's success operates under power-law, it needs the folks who have the biggest appetite for risk to grow successful companies, unflinchingly, and sell or go IPO at x billion dollars. However, who they will attract in larger and larger numbers are really smart risk-averse engineers, buoyed by the opportunity to start a company with $170k in the bank and the opportunity to acqui-sell if things go south.
My impression is that's what the application process is designed to filter.
Designed to filter good/smart teams who like (to work with) each other. Which is why they'll accept teams with no ideas, which seems odd to me, again given the success of the two and three-person teams of Dropbox and AirBNB, respectively, which never pivoted.