Posts Tagged y combinator

Is Silicon Valley Getting Desperate? in the last week has posted about two non-tech, completely boring, run-of-the-mill, service companies. You know, the kind that have been around forever. For instance, you can get your food delivered by Y-Combinator backed DoorDash or you can, wait for it… Get your laundry done by a service called Prim – goofy shirted people and all:

Prim Y-Combinator backed Laundry service

This leads us to the question: How desperate is Y-Combinator?

Part of the point of Venture Capital firms is to invest in high-risk, high-reward businesses – the idea being that a business that exists primarily on the web is able to grow (scalable) at a rate that can’t be equaled by a business that requires human capital.

This is why the startup community is so alluring to so many people, if you can sell a product or service online, your customer base isn’t geographically limited, nearly the entire world is available to you to sell to.

So, this leads us to consider the possible reasons Y-Combinator, a well established, highly respected Venture Capital firm, is investing in very low-growth, geographically limited startups. I can think of just a few possible reasons:

  1. The talent is so ridiculously smart, driven, and well-connected that Y-Combinator is willing to do anything to keep them from becoming a competitor.
  2. Y-Combinator has some senior partner who has run amok and is doing whatever the hell they want (probably not…).
  3. Y-Combinator has decided to diversify their portfolio and add some lower-risk businesses to their holdings.
  4. Y-Combinator is working to parlay this experience as delivery services into some software to support other delivery businesses and that will be a more typical investment for them.

What’s next for Venture Capital firms? Investing in gas stations?

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