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I am actually surprised they were doing this at all. They have no obligation to support the startup beyond the initial 7% investment more so for the Series A.

I am actually surprised they were doing this at all. They have no obligation to support the startup beyond the initial 7% investment more so for the Series A. Companies who can't stand on their own two feet and raise money on their own simply don't deserve to survive. I actually wish YC would take it a step further and offer an option where they don't invest any money at all. You participate in the accelerator, have access to their resources, are part of the alumni but simply don't accept the $150k and 7% equity dilution.

goatherders 7y ago
YC is a for profit entity. Why would they offer a free cup of coffee much less access to the resources and network if they aren't getting anything out of it? I like YC and enjoy HN, but the altruism comes after the profit (as it should).
- threeseed 7y ago
  I should have clarified. I meant an option where they take some fraction of 7%. Not sure whether this is necessarily a great deal for YC or not. Depends how cheaply they can raise the $150k they need for each company in each batch. I just know for many startups like mine $150k is basically worthless. It's not enough to hire and you just stay somewhere cheaper and commute into YC for the program.
  - anticsapp 7y ago
    You're right. A no investment incubator would kind of suck but there are pay to play incubators?! Reverse investing? Makes no sense, but your scenario would be better than that. Nothing wrong with a Harvard scholarship.
    - travisjungroth 7y ago
      There are few government run 0% equity accelerators. Start-Up Chile gives $35k in reimbursed expenses and six months of office space + mentorship. Their hope is you stay in Chile and they make it back in taxes.
  - phkahler 7y ago
    >> It's not enough to hire and you just stay somewhere cheaper and commute into YC for the program. As I understood it, the original intent was just to pay living expenses while doing the program and developing a minimum viable product. The intent was that the makers would own the company. It has strayed from that for better or worse.
  - goatherders 7y ago
    Got it. I always thought the 150k was meant for smallish teams as a "spend 3 months growing here and 3 months raising more money" kind of money, which is important for many companies.
sdan 7y ago
$150k for startup/living expenses for 3 months and 7% if they succeed. $150k in the grand scheme of things isn't much: YC knows you'll raise a lot more and much faster right after demo day if you need to.
s17n 7y ago
You are surprised they do pro-rata follow-on rounds, or that they had a blanket "participate in all follow-on" policy?
- threeseed 7y ago
  The latter and I am surprised it has taken this long. Maybe in the early days it was more like being part of a family that looked after you as you grew older. But now with the batch sizes being so large YC is much more like an industrial machine.
  - sdan 7y ago
    Industrial machines with a 1% acceptance rate? We're talking about YC, not Startup School.

goatherders 7y ago

YC is a for profit entity. Why would they offer a free cup of coffee much less access to the resources and network if they aren't getting anything out of it? I like YC and enjoy HN, but the altruism comes after the profit (as it should).

threeseed 7y ago
I should have clarified. I meant an option where they take some fraction of 7%. Not sure whether this is necessarily a great deal for YC or not. Depends how cheaply they can raise the $150k they need for each company in each batch. I just know for many startups like mine $150k is basically worthless. It's not enough to hire and you just stay somewhere cheaper and commute into YC for the program.
- anticsapp 7y ago
  You're right. A no investment incubator would kind of suck but there are pay to play incubators?! Reverse investing? Makes no sense, but your scenario would be better than that. Nothing wrong with a Harvard scholarship.
  - travisjungroth 7y ago
    There are few government run 0% equity accelerators. Start-Up Chile gives $35k in reimbursed expenses and six months of office space + mentorship. Their hope is you stay in Chile and they make it back in taxes.
- phkahler 7y ago
  >> It's not enough to hire and you just stay somewhere cheaper and commute into YC for the program. As I understood it, the original intent was just to pay living expenses while doing the program and developing a minimum viable product. The intent was that the makers would own the company. It has strayed from that for better or worse.
- goatherders 7y ago
  Got it. I always thought the 150k was meant for smallish teams as a "spend 3 months growing here and 3 months raising more money" kind of money, which is important for many companies.

sdan 7y ago

$150k for startup/living expenses for 3 months and 7% if they succeed. $150k in the grand scheme of things isn't much: YC knows you'll raise a lot more and much faster right after demo day if you need to.

s17n 7y ago

You are surprised they do pro-rata follow-on rounds, or that they had a blanket "participate in all follow-on" policy?

threeseed 7y ago
The latter and I am surprised it has taken this long. Maybe in the early days it was more like being part of a family that looked after you as you grew older. But now with the batch sizes being so large YC is much more like an industrial machine.
- sdan 7y ago
  Industrial machines with a 1% acceptance rate? We're talking about YC, not Startup School.