Probably not all that much, in the big picture, where billions of dollars are the order of magnitude that things seem to be happening at, but it's cool to see in any case.
I dunno - the logistics of investing are hard and the sample documents are just a start. If you give people step-by-step directions and access to the right professionals, you may very well see a demonstrable increase in angel investing.
Things like this are why the Valley's so important. You'd think someone somewhere else would have done this, but noooooo. You just know that if someone else had done this, they'd have tried to make a buck on it. This is a completely altruistic move on YC's part - hell, they're setting up additional competition for the YC program.
Oh, I agree it's really cool and all, but compared with job losses in the 10's or 100's of thousands... I'm just not sure that it'll make much of a difference in terms of "help stimulate the economy and help liquidity start flowing again".
But that's no argument against it, or saying it's not important; just that perhaps getting a few more people investing is not going to fix the economy overnight.
I don't think it'll make much difference now, but I wouldn't be surprised if a program like this is the catalyst that sparks the recovery a couple years down the line.
Most hacks take a few years to really show their impact, but somebody's gotta do it, or we'll be in a depression forever.
I think the effects of a few more people investing are probably minimal compared to N * 100 billion dollar stimulus package kinds of things, GM going into bankruptcy, etc... (Whether you view the effects of that as positive or negative).
That doesn't mean it won't lead to good things, I'm just skeptical of a smallish conference in terms of "saving the economy". I don't think that's really it's purpose in any case.
So the way to figure out whether that means anything at a large enough scale to matter, is to look at how many angels might invest how much money. I honestly have no idea, but here are some random numbers:
10,000 investors invest 10,000 dollars each is 100 million dollars. You could vary that to 1,000 investors doing 100,000 of investment each. 1,000 investors each doing a million dollars would be 1 billion dollars. What relationship do those random numbers bear to reality? Has YC even spent a million dollars on all the companies involved? And there are several people investing in YC, so I think it probably comes out to less than a million a head, and they've been doing this for a while now.
The real impact of startups is not likely going to be in hiring in any case, but still, it's worth looking at some numbers to get an idea of the order of magnitude that we're talking about.
For the first part of your math, YC has spent at least 1.5 million (~300 founders * 5000). Team sizes vary, but if we hold them at 3 members, we get another half mil. So by my very back of the envelope calculations they've invested about $2 million.
We need to add another 100 ghost founders to account for the extra $5,000, so that makes it: ~350 founders x $5,000/founder = ~$1.75 million invested, so far.
Y Combinator has (I personally believe, but do not necessarily know to be true) additionally sunk capital investment into:
* Beans and rice
* A building and associated land in Boston
* A building and associated land in Mountain View
* Utility bills
* Travel expenses
* Legal fees (including 102 incorporation-fee packages)
* Accounting fees
* Misc.
That's my point, exactly - it'll likely take years for anything getting angel funding now to have much of an effect on the economy. Google isn't even in the top 50 list of US corporations, according to the Forbes 2008 list.
It bears repeating that I'm not knocking what you guys are doing - quite the contrary, I think the best thing most of us can do is just do what we do, well, and hope for the best. I just don't think that your conference will do all that much to get the US economy going again, nor should it be expected to.
Edit. Whatever, people, if you think that PG and company are going to single handedly have more of an effect than billions of dollars in taxes or tax cuts or infrastructure spending or GM failing or more banks going under, or China selling their dollar assets, or whatever, you're welcome to your beliefs, I'm done arguing the point.
I think perhaps you meant to qualify your statement by time rather than space. I.e. "not much in the short term" rather than "not much in the big picture."
Certainly - if we have to wait until some company currently getting angel funding is big enough to hire up all the fired auto workers, we are really screwed:-) I think what you guys are doing is awesome, but think that it's basically impossible to predict much about long term effects: some YC company might create a system that saves the newspaper industry, or they might create the final nail in the coffin. Who knows... you (the generic you) just have to get out there and try and experiment and do your part.
No one ever said that this would have a greater effect than all that, just that this type of thing, along with Mark Cuban's latest offer, will help small businesses and startups get off the ground in a time when getting any type of loans through traditional outlets, banks, is nearly impossible. I was meaning to be vague as to not spur any economic debate, sorry.
