Let’s say the following is the situation:
- I can convince YC to accept me in a batch
- …and that even though my idea is in a draft state, without customers
- My idea will possibly make a huge revenue (not billions, but it will be a great business still)
- I only need the initial 500k$ to build that great business as a single founder
- I do not want a follow-up investment round
- The business will continue operation and won’t shut down
Two questions:
1. Do I need to pay back the 375k$ if there will never be another round?
2. Would it be illegal/breaking any contracts if I knowingly receive money from YC with the intention to never collect any additional investor money?
Side note: I understand it’s highly unlikely YC will ever invest into such a startup because it’s not a real VC case but for the sake of it, let’s imagine they would.
Thank you!
2. You would be lying here. And you assume that YC partners will not catch it, which I doubt. YC invests in people, not in ideas. Some YC startups pivoted to be a services companies (one example is web scraping-as-a-service), and they are selling their services to other YC alumni startups. I don't think it's a good idea to strive to build a life-services business, better have some ambigous goal first, and only in the worst case pivot to productized services, lifestyle, or consulting company. Remember starting up a small company and starting up a large company takes more or less the same effort (at least initially).