CHEESE AND CRACKERS. Startup godfather Paul Graham was in town this week to promote Y Combinator, the accelerater program that remains the gold standard despite the fact that it does not have its own TV show. Living in New York makes his upper lip sweat, he shared, indicating a YC branch in the city is not in the cards. Entrepreneurs were salivating over the chance to meet the jolly and gracious Mr. Graham–“never seen so many dudes in a line” as someone on Twttr, we can’t remember who, tweeted. But Mr. Graham is not as beloved when it comes to the investor community. A notoriously fierce advocate of founder power, Mr. Graham pushes for extremely favorable investment terms for YC companies–namely in the form of uncapped notes, whereby the stake in the seed round converts to a proportionate amount of stock in the next round. “Angels and super-angels tend not to like uncapped notes,” Mr. Graham has written. “They have no idea how much of the company they’re buying. If the company does well and the valuation of the next round is high, they may end up with only a sliver of it.”
The main problem with this, one investor told Betabeat, is that Mr. Graham takes a straight six percent stake in YC companies even as he waxes righteous when those companies go out to raise. Entrepreneurs defer to Mr. Graham’s advice, this source said, even when there’s another investor they’d like to work with. “He’s protecting those two blockbusters,” this source said, referring to the relatively small number of mega-breakout YC startups such as Airbnb and Heroku.
It’s fine by some investors if Mr. Graham wants his companies to talk a big game, our source said–personally, this source plans to clean up by investing in YC companies later when they “have to do a down round” after the inevitable failure to meet their investors’ artificially inflated expectations.
ARRINGTON TOWN! Mike Arrington seems to be breaking stories on his own Twitter feed rather than push them to TechCrunch writers–and now that he’s got his own blog, we’re expecting to see some direct competition with his own stomping grounds. After years of pressuring startups to give TechCrunch exclusives, some sources speculated that Mr. Arrington is now telling founders not to send stories to TechCrunch. Betabeat was unable to confirm that, but we’re told by TechCrunch staff that Mr. Arrington is no longer Skyping or Yammering or with the team, and he’s stopped forwarding stories to tips@techcrunch.
“I have no idea where Mike tells people to send his scoops,” former TechCrunch writer Paul Carr said. “I think he’s breaking stories on his own Twitter feed.” So with TechCrunch out of the way, where are founders sending their stories? Perhaps that other tech-y blog with the prominent personality at its helm? “BI is trying to replicate the fuck you attitude of classic TC,” Mr. Carr said.
NEXT! Justin Johnson, the first creative filmmaker hired at Next New Networks, is bowing out. If you recall, NNN, the company that brought you “Bed Intruder,” has been taken over by YouTube (read: Google). Mr. Johnson is headed to L.A. after four and a half years at NNN; he’s behind the popular YouTube Time Machine, which had more than million page views in just over a week after launching last year.
Given the “Google crushes startup souls” narrative going around, we wondered if Mr. Johnson felt his new corporate overlord was cramping his style. Nah dogg, Mr. Justin told us in an email. “The Time Machine App has been hugely successful which has given me some cushion for sure, but ironically, I just got sick of being a teacher of how to succeed on YouTube, and wanted to get off the bench and give it a go myself,” he said. “I call it ‘quitting YouTube to work on YouTube.'” Friend and former co-worker Erik Beck, who launched the YouTube channel Indy Mogul with NNN and Mr. Johnson, is also leaving Google. “We’re working to build up a channel of our own for fun and profit,” Mr. Johnson said. “I think it’s a very positive story for YouTube–we believe so much in the system, we want that freedom to profit from pure creation ourselves instead of the salary and ridiculous benefits at Google.”
BIRCHBOX: A NEW SCENT FOR MEN, COMING SOON. As Guyhaus ramps up for toiletry delivery and Bespoke Post launches out of the ER Accelerator cannon with “curated awesome” subscription care packages for men, Birchbox just may scoop the market first. “My husband would like monthly samples,” one customer queried via Tumblr. “Why not a birchbox for men?” “We’ll have something for him very soon :),” Birchbox answered. “Stay tuned!”