Posted by shscs911 3 days ago
Occasionally in YC founder circles a new founder will raise a bunch of money and then ask something like "What's the best way to invest all the money our company just raised?"
The responses are always along the lines of "Your startup is already risky. Don't innovate in areas of your business where the status quo is known to work. Innovate your product + technology, don't be innovative with your company's finances, HR, etc"
That advice always stuck with me. It just makes a lot of sense to do things in the most boring way possible, except where it matters (your competitive advantage <-- that's where you innovate, that's where you set yourself apart)
Running a startup is distracting enough. Doing things non-standard just adds to the list of distractions that you don't need as a founder.
The simplest explanation is that this is a mostly symbolic move: They want to show that the stable coin and crypto companies they invest in are actually trusted by YC. It starts to look hypocritical if an investor is funding crypto companies and praising them as important breakthroughs, but not actually using them where it’s important.
Advising unproven risky businesses to depend on other unproven risky businesses? Doesn’t that just increase the likelihood that something goes wrong?
Read carefully: They’re not actually advising that startups prefer it. They’re allowing it as an option.
It doesn’t mean that it will actually be used. They just don’t want to appear like they’re avoiding the companies they’re funding. It’s a bad look.
> YC, like most incubators, has always encouraged (…)
“Encouraging” means advising, advocating for, not “allowing as an option”. I don’t know if YC really does that, but that’s the conversation. It’s about the claim made in a comment, not the submission.
Yes, I understood that perfectly.
> I wasn't claiming they encouraged the use of stablecoins.
Neither have I claimed you did.
> I was adding historical context to the move.
Yes, I know. All my answers are congruent with that.
I'm convinced the point of YC must be something other than launching successful businesses
Why wouldn’t they?
I would consider that a risk decreaser, because the loop creates a stronger fit signal.
Even more powerful, since across a cohort the encouragement is N-way, or really N^2-way, it actually lowers risk on average the more startups act as each others’ early customers.
And co-adopters benefit from getting unusually responsive suppliers with a strong indirect stake in mutual success.
Encourage isnt a requirement. Adopt only if it makes sense.
Are you saying founders don't mount an FTP account using curlftpfs and access it using SVN?
The people that did exactly that never had to worry about (hyper)inflation...
Gold is interesting because more of it was being mined and produced all the time. There wasn’t even a finite amount of gold.
Thinking that a gold standard means no inflation (or in practical terms, deflation as the population grows) is a modern fantasy.
Oh but hey, checkmate, burglar who is threatening to cut my daughter’s finger, my wallet is multisig !
It’s the same logic as iPhones bricking themselves after being stolen. Even if your specific phone isn't an iPhone, the fact that most phones are now useless to thieves discourages the crime across the board.
Our knowledge is constantly expanding, allowing us to build things differently than we used to. Modern cryptography, which makes things like multi-sig possible, is only a few decades old; it didn't even exist when the current banking industry was being established.
Break in, bash owner about with a wrench, get coins. <Insert xkcd>
There are ways to prevent this. Like using multi-sig with geographical separation (so you can't move funds alone) or setting up forced time-delays. Ultimately, being your own bank is a massive responsibility, and I think too many people take that reality too lightly.
There are no good banks in Canada.
I get money
You get mad because the bank's shut
Why would their having reasons make me feel better when my payments don't go through? We complain when Apple plays nanny and makes their product a walled garden. How is a bank different? They should be doing their job without causing inconvenience for me.
Withdrawal and transaction limits are commonly such a thing, politicians get hounded because some people were frauded out of their monies and they feel a need to show that they're doing something about it.
Banking is very international, you can put your money in some other jurisdiction if you'd like to. Many transnational banks are connected to the usual payment providers, you can probably figure something out if you put your mind to it. One way to do it is to start a company, business accounts at banks generally have different limits and then you pay a lawyer or bean counter to clear how to do the books and pay appropriate taxes.
Putting stricter limits on intermediate devices like pocket computers doesn't seem very tyrannical to me. Interac's web site says the typical default limit would be 2-3000 CAD, i.e. 12-1800 euros or so, unless you have a small business account, then it's more like 25000 CAD.
If you often find yourself spending thousands of CAD on a whim, perhaps it would be a good idea to open accounts with a bank that is tailored to people with a lot of money. I'm sure there are some available in Canada.
Debit I'd agree would suck because it is your money. Credit cards on the kther hand is you lending mkney from the bank.
What a strange toss-up.
See for yourself the blacklist features
https://github.com/circlefin/stablecoin-evm/tree/master/scri...
No, it's not. It's not possible to come to the US soldiers with a bunch of US dollars and some demands and get what's demanded in return for the dollars.
Only trust of the other market participants backs the US dollar.
For states:
They quietly inflate the money supply by forking fiat, achieving monetary base expansion without the political cost of explicit money creation
For issuers:
They convert user deposits into a private mint: risk-free interest on collateralized reserves, with none of the upside shared with holders
For users:
For everyone but the unbanked & criminals, stablecoins are strictly inferior money surrogate: no yield, no guarantees, and no recourse
It’s a sign of commitment to something they’ve invested in as OPs says.
You should invest in some YC startups with your YC investment money.
Stablecoin-adjacent YC companies:
• Bridge (acquired by Stripe for $1.1B) — stablecoin infrastructure, now offers "Open Issuance" platform for others to launch stablecoins
• PrimeVault (S2022) — helps enterprises issue & manage digital assets/stablecoins
• BlindPay (W2025) — stablecoin API for payments
• Coinbase (S2012) — issues USDC (with Circle)
This also makes sense from the investors point of view, they invested in your company to receive growth from your product/business, not from random stocks you bought with it.
That said, I think there is a distinction between trying to be innovative across the company (ex. Gitlab's open employee handbook, CEO shadows, etc.) which is arguably not a bad thing at all, and this specific case of trying to actively invest company funds. In some cases, a more innovative way of doing things may actually be simpler and less complex than the default way for bigger companies, it just depends on the exact scenario.
That strikes me as unwise. If there’s a sharp downturn in the total market, that’s precisely when you might need to call upon otherwise unneeded cash reserves.
Oversimplifying:
X = full amount of raised capital
Y = expected spend over 12 months
Z = $ value of percentage contingency for 12 months
Y+Z goes into use-it-however-and-whenever-you-want account (likely low to no interest)
X - (Y+Z) goes into a 12 month higher interest account, ideally staying untouched until maturity (stake the stablecoins in this context)
I'm skeptical of crpyto holding companies though, explicitly because of the lack of regulation. The likes of BlockFi, Celsius, and FTX gives me the cold sweats. Regulation in the US is notoriously lacking even in well established finance and banking, never mind the crypto 'industry' which was always high-percentage grifters, and now the Epstein files has added 'morally corrupt' tags to more of them.
Recipe for sleepless nights, which is already a problem for a startup founders isn't it?
Also X=Y for almost all startups.
But of course, YC being YC will fund another startup which will help other startups manage their stablecoin portfolios...
Also note that in most jurisdictions, you cannot pay employees with crypto, stable coins or not. Nor can you pay suppliers. Or AWS/GCP/Azure.
This is literally a textbook example of, in YC's words, a solution in search of a problem.
Seems sub optimal to drop millions into a founders bank account for couple of years runway.
Will we see some pivots into bullshit crypto holding companies? Sure, but VC returns are notoriously lottery-ticket distributed and 0 is 0 however you get there. I'd hazard a bet that the number of otherwise-successful companies who die due to this policy rounds to 0, while the probability of an inflationary wrecking ball that wipes out an entire batch of otherwise promising startups in the absence of such a policy is... north of zero.
To be clear, I don't think this is due to a special property of crypto, just the flexibility to get away from USD in case of emergency.
EDIT: maybe 24/7 trading could be an argument. It would be a meme for the ages if a raft of startups survived because they were up hustling and grinding at 2AM when the boats hit the Taiwan Strait.
If the US falls apart, your startup will too. No matter how well preserved your cash reserves are.
The US going to war or entering hyperinflation is probably at the bottom of most founders lists of existential worries. Not a risk to mitigate (it’s a risk you need to accept since there’s nothing you can do - worrying about it won’t help)
Also, worth mentioning that no one lost money with SVB’s collapse. One might argue it was an incredibly smart decision for YC to recommend people bank at SVB since if SVB goes under, virtually all LP’s and everyone in the VC community will go under too (too big to fail, so they won’t, or if they do, everyone else fails too — kind of like AWS us-east-1)
Startups that wanted to treasury in BTC or GLD, were told no, and were vindicated in hindsight are not a meme. Startups that were force-fed 10% inflation and a collapsing bank aren't a meme. That happened.
You can complain that it's irrational to hedge against these things which have been happening an awful lot lately, but you aren't the one who gets to decide. If an enterprising alternative VC is peeling away good founders by being flexible on this point, YC's option is to compete or let the deals go.
is this the right comparison? us-east-1 goes down a lot to an extent because everything goes down at the same time, rather than as a collective need to stay up. its one of the worst AWS regions if what you care about is stability and up time. too big to fail does not add extra up time guarantees to that region
Inflation and hyper-inflation can wipe out debts with future money that's cheaper more easily in some ways. I forget where I had read or learned more about this in other countries that had experienced it.
Why won’t the fed raise rates?
The upcoming decision by the Supreme Court on case Trump v. Cook is about this very issue[2]
[0]: https://www.cnn.com/2026/01/29/economy/federal-reserve-indep...
[1]: https://www.pbs.org/newshour/nation/why-the-federal-reserves...
[2]: https://hls.harvard.edu/today/will-the-federal-reserve-remai...
Trump is trying to change that through judicial means, rather than purusing a legislative one. Dubious at best, but the Supreme Court as of late has not been reliable in upholding important precedent.
The return won't be much but it's better than letting the cash sit idle and evaporate due to inflation
If you have a huge chunk of change sitting around, you've raised too much or too early, and you've successfully diluted yourself for zero reason.
If you actually had a reason to raise a lot of money, you'd do with the money what you promised the investors (who gave you the money) you would.
I've raised before. I raised what I needed. Not a penny more because I didn't need the money.
I'm not saying raising and then buying T-Bills is better than just raising less.
I'm saying if you find yourself with excess cash, you can't just un-raise. In that scenario, then short term T Bills are strictly better than cash.
I get that if you're running super lean and you've raised enough to run lean for a while and use cash when you need to, but at the same time why raise more than you have need for?
The latter group most commonly in the bay area.
Which is crazy to me.
You write a check for a lot of money, and don't care how/when/where the money is spent? Or you accept bullshit vague answers?
That's not due diligence, that's deliberate ignorance.
I always thought a startup can return cash to investors as long as the payments or dispersements are proportional to the amount of stock owned.
- 12 months runway - $100k/mo. burn rate - 4% APR
Gives you about $25k interest.
Seems worth it to me.
Don't get bogged down with that stuff.
For the love of God, no. Do not do that. The cycle begins when you take the money. How there are still people here that don’t get this, I don’t understand.
Occasionally it’s the public market…
https://medium.com/@Arakunrin/the-post-ipo-performance-of-y-...
Most often for successful exits, it’s to get acquired and shut down the original product with a “Our Amazing Journey” blog post.
For instance, I know Coinbase may be down -22% from the IPO price, but that doesn't mean YCombinator lost money nor made very little. If they, for instance, sold off during the first few days of the IPO they would have made out quite well.
There's also the whole question of how much money did YCombinator put in vs what they got out.
Without knowing this, about all the chart tells me is YCombinator is not a predicated on building exceedingly durable businesses, but it doesn't mean they lost money on any of these investments either.
> There's lots of reasons to be concerned about relying on USD.
So no, even if this statement is true it's irrelevant to this thread.
All major export economies (Italy, Germany, Japan, China) have clearly shown in the last decades that being an export economy is a major weakness.
Also, the elephant in the room: the real exports of US, which are services, are not included in the very same trade balance. How much money flows to US through services? From google and meta ads to Netflix subscriptions to financial services and payments, from Hollywood movies to Amazon's/Cloudflare's cloud services, etc, etc?
What currency controls have been implemented? A cursory search turns up no results, though there is some speculation that capital controls could be coming, they never the less haven't materialized, at least in such a way that no credible news outlet has plainly stated it.
The debasing of the USD is again, a fear, and Trump is absolutely stoking the fire around it, but it hasn't actually happened, as far as I can tell.
If you have evidence of the contrary to either of these I'm quite curious to see it. I wouldn't put it past this administration in the slightest, but there is a difference between implementing them and talking about them and for correctness sake I want to understand.
The Remittance tax has an enormous amount of exemption businesses (because no institution that is subject to the Bank Secrecy Act is subject to it, neither is cryptocurrency, which I find interesting) its functionally a tax on individuals that send money to their home countries, as once you work through all the exemptions its the only transfer function left.
While its deplorable, I thought something much more draconian was afoot
Not to say that Trump isn't wreaking economic havoc and madness, but the USD is resting on a far stronger base than somewhere like Argentina.
Expect most teams to convert stablecoins once they receive it, but even then it's a cheap/fast money movement layer, especially globally. Even in US, cheaper and faster than wire.
All crypto/browser automation/bot detection companies are jumping on the bandwagon:
https://docs.cdp.coinbase.com/x402/core-concepts/http-402
https://docs.browserbase.com/integrations/x402/introduction
https://developer.mozilla.org/en-US/docs/Web/HTTP/Reference/...
https://docs.datadome.co/docs/monetize-policy
In a world without search engines, LLM chat bots will need to be held to account for the server resources they're using. Seems like a lot of companies are betting on them paying for access or acting as AI shopping agents.
The bank would argue that an AI using your account on your behalf is fraud.
Those awful regulations won’t let me say the “computer ate my homework”. Imagine.
What situations do you imagine where one :
- changes frequently and/or covers a LOT of APIs
- requires little to no budget oversight
- requires little to no quality oversight
?
To start, it's great for micropayments globally. There are examples where you want an API once and not again, and you don't want to create an account or link a credit card.
Cloudflare was one of our earliest partners, and they saw a critical need for it for web scraping by AI.
My personal Website supported WebMonetization (details https://webmonetization.org ) for more than 5 years already so no need to convince me about that, I agree. I also believe one could just as easily have a funding.md with an IBAN and structured communication to make the equivalent.
Anyway that's beside the point, what I still don't get is a use case without or without AI according to the constraints I listed before.
If you consider that AI agents may end up autonomously designing, building and running SaaS-like products, or API microservices, it makes sense that they should be able to pay systems in stable coin. It allows them to operate without the restrictions put in place by traditional financial institutions. That's my futurist opinion.
YC are presumably paying for the usage with fiat.
Or perhaps Y Combinator is great at funding startups, but incredibly bad with financial decision making.
In which case it is an IQ test for Y Combinator, which they have failed.
How does that make any sense to the company? Who's out here wanting their salary in stablecoin? And who among those want that and can't receive dollars and then turn them into stablecoin?
There's a sliver of talent that won't have access to the US banking system, but I can't imagine that making it worth putting up with risk + txn costs of stablecoins for the whole company.
The majority of humans are losing interest in digital ephemera South Park-WoW guys are desperate sell them on, otherwise South Park-WoW guy might have to work to live not just shill hallucinations like a priest.
It also trades under the ticker "COIN": https://finance.yahoo.com/quote/COIN/
And after a serious beating it's still value at $48 billion.
Put it another way: of all the companies YC funded, both those who succeeded and the countless who failed, only two companies, AirBnB and Doordash, are valued more than Coinbase.
I don't think YC hates cryptocurrencies as much as the typical commenter on HN.
I don't really care about short term gold gambling with ~1-2 year market spans or altcoins if you want to disagree.
The biggest threat to bitcoin and gold is something breaking their scarcity. Gold, nuclear chemistry. Bitcoin... quantum computing or something(ignoring rollback).
https://ndl.ethernet.edu.et/bitstream/123456789/41452/1/112....
You'll never guess, but most banks didn't actually have enough specie to back their notes, and banks constantly failed during the Free Banking era. If a bank failed then the notes value went to zero, and so notes always traded at a discount to their face value, and there were even brokers who were paid by local merchants to give them the latest correct discount rates for all the local banks (updating daily), and if a bank note got far enough away from the bank that the local broker didn't know about it, well, then it wouldn't be accepted by a local merchant. So effectively a similar result here in the capitalist, non-aristocratic US for about 15 years.
This is an enormous amount of overhead in actually running an economy, which was why it was ended and we had the National Banking Acts of 1863 and 1864 to try to create a more uniform currency, and the Bureau of Engraving and Printing created in 1862, etc. Because the actual businesses started to demand simpler accounting, and so more financial regulation of the banks.
That sounds like a libertarian paradise. Sign us all up!
Ironically enough though, could feudal currencies actually be better on a blockchain? Think shares in a business. Bitcoin is backed by nothing, but if businesses all trade on Ethereum–style L2s, you could lock in whatever you want. Think: I want 2 tonnes of lumber for my new house build so I will trade whatever for 20000 $HomeDepotLMBR and it entitles me to exactly that amount when I go into the store.
A cryptocurrency system can negotiate that my six cow NFTs (which are not jpegs, I guarantee they are exchangeable for cows) for two Ethereum, of which 0.05 is taken as a fee and 1.95 flows on to Uniswap to buy Home Depot coin which buys two tonnes of lumber at a specific location and time. Except oh dear — Home Depot only trades on Polygon. Well then my 1.95 ether is bridged to Polygon where my 1.94 wrapped ether is traded for 9999999 POL and then for Home Depot coins. Or I buy wrapped Home Depot coins atomically on Ethereum and then unwrap them back to Polygon.
Crucially it all happens automatically.
That infra doesn't exist since cows and lumber aren't being traded on a blockchain, but it's the kind of thing that could be enabled.
Since I only hold ETH, WETH and POL during the transaction, their absolute value doesn't matter.
At this phase, stablecoins are largely best for easy money movement, but the money ends up in fiat.
We are seeing some examples of teams using it for payouts, e.g., Gusto and Deel both support stablecoin payouts. Expect that to grow, but still very early days.
Of course, given that the grandparent said "If they aren’t a crypto startup" - Axiom clearly doesn't apply.
YC -> Circle -> Coinbase -> YC
And if you didn't know that's what you're supporting with the hype train, well now you do. Those folks all love and greatly benefit from difficult to audit financial instruments.
I asked ChatGPT for an honest translation:
“We’re actively trying to manufacture demand and legitimacy for stablecoins by forcing them into the startup supply chain.”
Here's Gusto's CTO: https://x.com/edawerd/status/2018785968669815011
• Bridge (acquired by Stripe for $1.1B) — stablecoin infrastructure, now offers "Open Issuance" platform for others to launch stablecoins
• PrimeVault (S2022) — helps enterprises issue & manage digital assets/stablecoins
• BlindPay (W2025) — stablecoin API for payments
• Coinbase (S2012) — issues USDC (with Circle)