But mortgages have an underlying asset that's usually of some value, as do cars, for instance. Getting loans for both is relatively easy, if you have decent cre

But mortgages have an underlying asset that's usually of some value, as do cars, for instance. Getting loans for both is relatively easy, if you have decent credit. On the other hand, I'm skeptical about this for a few reasons: - If it was as easy and plugging your qualifications into a computer, why aren't banks doing it already? There is obviously a high level of risk in a startup, and most investors have many defenses in place to try to assess higher quality startups, many of which are exceptionally frustrating to the entrepreneur (although perhaps justifiably so). - As a follow-up point, how are they going to defend against a large number of people who become good at "faking" a startup? If you're investing $20k, what's to stop someone hungry for cash from outsourcing a prototype and applying? Since they never meet in person, I'd think it would become exceptionally difficult to distinguish between the legit companies and those legitimately good at faking it. - As has been repeated many times, the most valuable part of YC isn't the money, it's the mentoring. Without mentoring, it's "just money". If you're just looking for money, family & friends of family are a pretty decent place to start. It's easy to think that if you just had money, you'd be able to bring the company to the next level, but oftentimes the reality is that you need help to get there. This model would seem to encourage people to take the money, lock themselves up, and plug away, which really isn't the right approach.