Agreed-- EXCEPT in certain cases where there are only N slots to fill (like TechStars and some others).
Techstars, for example has 10 slots (I think). If they have 300 applicants and 10 slots, how do you think it'd work if they said, "take your time, let us know whenever". If they accept you, they aren't accepting the next startup on their list... And basically, they can't send accept/reject notices to folks until they fill all of their slots.
Or am I missing something? If a YC competitor has a fixed number of slots, is there a way they could NOT have an exploding term sheet (other than not have a fixed number of slots)?
If you have a fixed number of slots you have to have a deadline. The problem is when the deadline occurs. If the firm in question made their first round of offers expire in 20 days instead of 2, it would be a moot point.
i.e. they offer first round of 10 companies and give 'em 20 days. 8 accept. They then work there way down an alternate list.
They could even have 2 types of acceptance. i.e. 10 offers and 20 alternates (so the rejected companies could get on with their lives). They could tell the alternates: "You didn't make the top 10, but you were really close. It's possible a slot could open up within 30 days. If it does, we might call you."
If it's TechStars, they purportedly have their deadline set based on academic calendar. You oughta try hopping in front of them to test that assertion. :-)
I'm just talking about the general case of exploding termsheets. If it's known ahead of time that they may get an offer that they have to take or reject BEFORE they apply, that's not an exploding termsheet.
Techstars, for example has 10 slots (I think). If they have 300 applicants and 10 slots, how do you think it'd work if they said, "take your time, let us know whenever". If they accept you, they aren't accepting the next startup on their list... And basically, they can't send accept/reject notices to folks until they fill all of their slots.
Or am I missing something? If a YC competitor has a fixed number of slots, is there a way they could NOT have an exploding term sheet (other than not have a fixed number of slots)?