4 ms·

If you reach the threshold required to get into YC, then your location and experience won't matter (and with the size of the batches getting larger and larger,

If you reach the threshold required to get into YC, then your location and experience won't matter (and with the size of the batches getting larger and larger, you could argue that it is in fact getting easier to raise money now than before). If something about your seed-stage startup is stopping you from getting into YC, then I would ask myself if I might be doing something wrong. This is coming from someone who went through YC with one startup and also got rejected in another instance. While YC does make mistakes, in my case they were spot on. Please know that I am not discouraging you from pursuing whatever it is that you're working on - every early-stage founder has a special place in my heart. Just realize that your time on this planet is limited, and there truly is so much opportunity out there. Spend your time wisely.

Aeolun 6y ago
Just because someone could get into YC doesn’t mean they want to. That means the signal isn’t there, even though the company is just as good as one that did enter YC.
- aerosmile 6y ago
  Technically, that's a correct statement. Even if you could get into YC, nobody is forcing you to take the YC tail winds, and instead you're free to throw yourself into the head winds.
  - solosoyokaze 6y ago
    Plenty of great teams skip YC. It’s kinda known for pumping out low quality startups anyway. Most YC companies are not Dropbox.
    - aerosmile 6y ago
      > Plenty of great teams skip YC. That was never up for debate. The real question is would those great teams have raised at better terms and from higher quality investors if they went through YC (obviously also accounting for the 7% YC tax)? From what I can tell by looking at the YC valuations, the answer is a no with one caveat: if they had a previous exit, their previous investors will give them a sweet deal with or without YC. > It’s kinda known for pumping out low quality startups anyway. Most YC companies are not Dropbox. It would be nice to see how you arrived at this conclusion. The YC portfolio is valued at over $300B [0], so I would say the investment community certainly disagrees with you (with or without Dropbox). In fact, that 300B figure was published before Stripe and Coinbase announced their IPO pricing, which has now likely added another $50B or so to the bottom line. [0] https://www.ycombinator.com/ https://www.ycombinator.com/
      - solosoyokaze 6y ago
        Just like every other VC, YC's successes are a small fraction of the investments they make. You can scroll through HN every day and see tons of YC startups no one has ever heard of/will hear of looking for engineers, launching... > It would be nice to see how you arrived at this conclusion. Demo days. If a great team is skipping YC, it's safe to assume they know what they are doing.
        aerosmile 6y ago
        > Just like every other VC, YC's successes are a small fraction of the investments they make. You said "just like every other VC." So, if it's a global phenomenon that's true in every segment of the VC landscape, why bring it up as an argument against YC? This entire thread is about venture capital, so I doubt you're trying to make a point about bootstrapping or something along those lines. I think what you're trying to say is that getting into YC is not a guarantee for success, but nobody ever claimed that. The odds are stacked against you either way, but the YC cohort's odds are way better than those of comparable startups that either didn't get admitted or never even applied to YC. If you want to debate this point, then let's see a substantive argument. Here's mine: YC's estimated IRR is 155% [0] (and this is an outdated number that doesn't include the recent IPOs). In comparison, the top ‘quartile’ of funds since Web 1.0 have returned about 20% IRR [1]. > Demo days. I can't really do much with this response, but thank you nonetheless. For everyone else, if you're contemplating applying to YC, I would refer you to one of the many discussions on HN where people presented actual math on when YC pays off and when it doesn't. For example, in this thread [2], the top comment links to a spreadsheet [3] that says if you want to raise $1m without YC, you should be able to get a seed valuation of $6.5m or higher, otherwise it's less dilutive to go through YC. Naturally, if you want to raise a higher amount, the threshold gets higher (eg: for $3m, the crossover valuation is $9m). Not to mention other value-added benefits, such as access to the Series A program, thousands of potential customers, etc. [0] https://www.quora.com/What-is-Y-Combinators-IRR-or-estimated-IRR https://www.quora.com/What-is-Y-Combinators-IRR-or-estimated... [1] https://www.quora.com/What-is-the-average-IRR-achieved-by-venture-capital-funds https://www.quora.com/What-is-the-average-IRR-achieved-by-ve... [2] https://news.ycombinator.com/item?id=24616649 https://news.ycombinator.com/item?id=24616649 [3] https://docs.google.com/spreadsheets/d/1kxOBF0CPhcktmgFvAZtYJVHrlf-hMw7nsw8S56dmt1A/edit#gid=0 https://docs.google.com/spreadsheets/d/1kxOBF0CPhcktmgFvAZtY...
solosoyokaze 6y ago
Raising money from YC is the same as any from any VC: you need traction or to be part of the VC’s network. If you don’t already have a bunch of users or know a bunch of VCs, you won’t be raising money.
- aerosmile 6y ago
  > you need traction Let's compare the experience of YC vs non-YC. YC: you submit an application with about 30 inputs. One of them has to deal with traction, and it's clearly a very important one. If that's not looking good, you have 29 ways to make up for it. It's not easy, but every batch has startups that had 0 traction when they were admitted, so clearly it's possible. At the end of the day, you're guaranteed that a group of people will read your application and will discuss it internally. Non-YC: to make an apples-to-apples comparison, I'll assume you have no prior relationship with the VC you're trying to reach. So you'll need an intro, which is nothing else but someone else taking on the burden of vouching for you. So someone at some point needs to believe that you're onto something. But if you don't know anyone, how do you get to that point, especially if you have no traction? Good luck with cold emails in that case! > If you don’t already ... know a bunch of VCs, you won’t be raising money. True for VCs, not true for YC. Just look at all the startups from India and Africa that got into YC and are killing it. You think they were super well-connected with the YC network when they applied?
  - solosoyokaze 6y ago
    If you have traction, YC or any other VC will invest in you. If you have great relationships with VCs, YC or any other VC will invest in you. You seem to be trying to make the case that YC offers some sort of unique lift to that of other firms and I don't agree, they gate on the same criteria as everyone else.
    - aerosmile 6y ago
      YC allows you to fill out an extensive application and then they guarantee you that they will read it several times across several people. Compared to what you get from VCs, that's a unique lift.
rexreed 6y ago
So you're saying that the threshold to getting into a fairly exclusive club (getting VC funded) is to get into an even more exclusive club (getting into YC). I find it comical that the VC community thinks it is diverisifying its entrepreneurship base by backing the same network of people that moved from San Francisco to Austin or New York. The truth of the matter is that capital might indeed be abundant, but it is going into much the same places it always has. The concentration of wealth and opportunity continues unabated. I challenge VCs with all this extra money sloshing around to rethink the path to sustainable entrepreneurship. If this was the late 1800s, the money would all be flowing into steel mills in Pittsburgh and the emerging oil barons and tycoons in those cities that are very much ignored today.

Aeolun 6y ago

Just because someone could get into YC doesn’t mean they want to. That means the signal isn’t there, even though the company is just as good as one that did enter YC.

aerosmile 6y ago
Technically, that's a correct statement. Even if you could get into YC, nobody is forcing you to take the YC tail winds, and instead you're free to throw yourself into the head winds.
- solosoyokaze 6y ago
  Plenty of great teams skip YC. It’s kinda known for pumping out low quality startups anyway. Most YC companies are not Dropbox.
  - aerosmile 6y ago
    > Plenty of great teams skip YC. That was never up for debate. The real question is would those great teams have raised at better terms and from higher quality investors if they went through YC (obviously also accounting for the 7% YC tax)? From what I can tell by looking at the YC valuations, the answer is a no with one caveat: if they had a previous exit, their previous investors will give them a sweet deal with or without YC. > It’s kinda known for pumping out low quality startups anyway. Most YC companies are not Dropbox. It would be nice to see how you arrived at this conclusion. The YC portfolio is valued at over $300B [0], so I would say the investment community certainly disagrees with you (with or without Dropbox). In fact, that 300B figure was published before Stripe and Coinbase announced their IPO pricing, which has now likely added another $50B or so to the bottom line. [0] https://www.ycombinator.com/ https://www.ycombinator.com/
    - solosoyokaze 6y ago
      Just like every other VC, YC's successes are a small fraction of the investments they make. You can scroll through HN every day and see tons of YC startups no one has ever heard of/will hear of looking for engineers, launching... > It would be nice to see how you arrived at this conclusion. Demo days. If a great team is skipping YC, it's safe to assume they know what they are doing.
      - aerosmile 6y ago
        > Just like every other VC, YC's successes are a small fraction of the investments they make. You said "just like every other VC." So, if it's a global phenomenon that's true in every segment of the VC landscape, why bring it up as an argument against YC? This entire thread is about venture capital, so I doubt you're trying to make a point about bootstrapping or something along those lines. I think what you're trying to say is that getting into YC is not a guarantee for success, but nobody ever claimed that. The odds are stacked against you either way, but the YC cohort's odds are way better than those of comparable startups that either didn't get admitted or never even applied to YC. If you want to debate this point, then let's see a substantive argument. Here's mine: YC's estimated IRR is 155% [0] (and this is an outdated number that doesn't include the recent IPOs). In comparison, the top ‘quartile’ of funds since Web 1.0 have returned about 20% IRR [1]. > Demo days. I can't really do much with this response, but thank you nonetheless. For everyone else, if you're contemplating applying to YC, I would refer you to one of the many discussions on HN where people presented actual math on when YC pays off and when it doesn't. For example, in this thread [2], the top comment links to a spreadsheet [3] that says if you want to raise $1m without YC, you should be able to get a seed valuation of $6.5m or higher, otherwise it's less dilutive to go through YC. Naturally, if you want to raise a higher amount, the threshold gets higher (eg: for $3m, the crossover valuation is $9m). Not to mention other value-added benefits, such as access to the Series A program, thousands of potential customers, etc. [0] https://www.quora.com/What-is-Y-Combinators-IRR-or-estimated-IRR https://www.quora.com/What-is-Y-Combinators-IRR-or-estimated... [1] https://www.quora.com/What-is-the-average-IRR-achieved-by-venture-capital-funds https://www.quora.com/What-is-the-average-IRR-achieved-by-ve... [2] https://news.ycombinator.com/item?id=24616649 https://news.ycombinator.com/item?id=24616649 [3] https://docs.google.com/spreadsheets/d/1kxOBF0CPhcktmgFvAZtYJVHrlf-hMw7nsw8S56dmt1A/edit#gid=0 https://docs.google.com/spreadsheets/d/1kxOBF0CPhcktmgFvAZtY...

solosoyokaze 6y ago

Raising money from YC is the same as any from any VC: you need traction or to be part of the VC’s network. If you don’t already have a bunch of users or know a bunch of VCs, you won’t be raising money.

aerosmile 6y ago
> you need traction Let's compare the experience of YC vs non-YC. YC: you submit an application with about 30 inputs. One of them has to deal with traction, and it's clearly a very important one. If that's not looking good, you have 29 ways to make up for it. It's not easy, but every batch has startups that had 0 traction when they were admitted, so clearly it's possible. At the end of the day, you're guaranteed that a group of people will read your application and will discuss it internally. Non-YC: to make an apples-to-apples comparison, I'll assume you have no prior relationship with the VC you're trying to reach. So you'll need an intro, which is nothing else but someone else taking on the burden of vouching for you. So someone at some point needs to believe that you're onto something. But if you don't know anyone, how do you get to that point, especially if you have no traction? Good luck with cold emails in that case! > If you don’t already ... know a bunch of VCs, you won’t be raising money. True for VCs, not true for YC. Just look at all the startups from India and Africa that got into YC and are killing it. You think they were super well-connected with the YC network when they applied?
- solosoyokaze 6y ago
  If you have traction, YC or any other VC will invest in you. If you have great relationships with VCs, YC or any other VC will invest in you. You seem to be trying to make the case that YC offers some sort of unique lift to that of other firms and I don't agree, they gate on the same criteria as everyone else.
  - aerosmile 6y ago
    YC allows you to fill out an extensive application and then they guarantee you that they will read it several times across several people. Compared to what you get from VCs, that's a unique lift.

rexreed 6y ago

So you're saying that the threshold to getting into a fairly exclusive club (getting VC funded) is to get into an even more exclusive club (getting into YC). I find it comical that the VC community thinks it is diverisifying its entrepreneurship base by backing the same network of people that moved from San Francisco to Austin or New York. The truth of the matter is that capital might indeed be abundant, but it is going into much the same places it always has. The concentration of wealth and opportunity continues unabated. I challenge VCs with all this extra money sloshing around to rethink the path to sustainable entrepreneurship. If this was the late 1800s, the money would all be flowing into steel mills in Pittsburgh and the emerging oil barons and tycoons in those cities that are very much ignored today.