21 ms·

Is Y Combinator worth the money?

• acecreamu 4y ago
  Happy to honestly answer any brutal questions you have!
  • monetus 4y ago
    With the market conditions right now, have any ideas about how it could be better? It sounds like structural critiques; like a smaller, tighter community that onboards with better incentives, enables more efficient engagement with the alumni and batch would be a big gain. And importantly, like ycombinator could show more flexibility and interest in the batch. That sounds like a smaller network overall though, with less success stories to tout. If they have a better 'batting average' so to speak, though, that would help the investor environment. How does it affect their income and social lives, balancing it all I wonder. Thanks for the article!
    • acecreamu 4y ago
      I think they did a right move - making the batch smaller and moving it back in-person. The money amount that was not very attractive at 2021 makes a lot more sense in 2023 as well. As for the community I believe it can only be build relatively strong for <100 people. Hence, smaller niche-specific batches?
  • ahstilde 4y ago
    How much did your company raise in total, and at what valuation? Would it have been able to do so without YC?
    • acecreamu 4y ago
      I can say, we didn't see significant uplift at Demo Day, the highest bump of valuation happened when we got accepted, it's fair to assume we wouldn't get it otherwise. I can't answer your question completely as in the end we decided not to raise and returned the money...
  • dilippkumar 4y ago
    Thanks for sharing this. What’s the strongest counter argument you can make in favor of YC?
    • acecreamu 4y ago
      There are a lot of good, even in what I write. The strongest I believe is the early and fully independent support for ideas that received no other recognition yet.
  • pcthrowaway 4y ago
    Do you think YC would make sense for a company that doesn't intend to raise money beyond the YC investment? I have an idea for a b2c product I want to build that has a few paths to revenue (and a possible b2b offshoot), as well as acquisition by FAANG (or FAANG-adjacent). Is there something about taking investment from YC that prevents me from turning around and selling it for $2M after building it out a bit more? Alternately, as a solo founder, if I got to a point of $10K MRR I'd be happy to just keep doing what I'm doing, but I guess I'd have an obligation to continue trying to grow? edit: to clarify, I'd be using the $125K 7% part of the investment without necessarily dipping into the additional $375K in this situation. But maybe I'm not understanding how the MFN provision works
    • acecreamu 4y ago
      Any investor would hate this idea, it's a terrible deal for them, and YC are smart enough to get it out of you. The whole business of VC is to sell later at the higher price. If they give you money at val of 5M+ and you sell for 2M - they are in loss.
      • pcthrowaway 4y ago
        It's not val of 5M though? It's ~1.7M IIUC. 7% for 125K, an additional 375K can be invested though, with additional equity attached. Is that not right? edit: Investors are also expecting to take a loss on many of the investments. 2M is one exit option, which still gives them +17% return on investment I know that's not the standard type of exit YC are looking for, and I'm open to growing a bit more, but not as interested in taking additional investments. Final exit could end up being 10M for all I know. I just think this growth at all costs attitude needs to change a bit with the current economy. I'd be happy to take $80K for a 7% investment also, but they have a standard deal which I think perverts the incentives and, frankly, leads to outcomes where they're pushing you to take more investment even if you could just have a sustainable business pulling in 10-30K MRR or something
      • tptacek 4y ago
        The whole business of business is to sell later at a higher price.
  • ychnthrowaway24 4y ago
    What led you to shut down and not continue and pivot?
    • acecreamu 4y ago
      Huge % of dilution after going through two accelerators (EF and YC). Would be too much of a burden to drag into a new venture.
      • blast 4y ago
        Didn't you know that when you took the money?
        • acecreamu 4y ago
          When we took the money we were planing to build up the original idea, not to start another one. For the consecutive growth of the original idea it wouldn't be an issue.
• dtagames 4y ago
  Interesting quote: Even when it came to fundraising, all the YC’s advice came down not to how to raise smarter and more, but to the fact that everyone needs to follow their simple framework, not try to shine too much, not try to choose the right words, wash off all the makeup, put on a gray uniform, and present dry facts—how much money customers already paid you, what the size of the market, if you count all the units you can sell, what you have actually built and what is working today. And this will always sound bad for anyone, it just can't sound good in the early days. And what actually works is storytelling, confident vision, committed revenue, and all these subtle things. It looks as if they are trying to make the selection process among 400 companies easier for the investors, and cover their own reputational risks, instead of trying to wrap each company in a beautiful wrapper and help it to raise easier. Just for ref, I did SUS and applied to YC three times unsuccessfully.
  • nonethewiser 4y ago
    I guess both perspectives seem completely rational to me. Why shouldn’t Ycombinator care most about viability and why shouldn’t startups care most about vision? Each side needs to cater to the other a bit but ultimately this is just the difference between funders and builders.
    • b112 4y ago
      When a woman is pregnant, the fetus tries to grow as large as possible, while to womb/woman works to restrict growth. Too much of either is not good, so perhaps the same is true here.
      • jamiek88 4y ago
        I think you need to brush up on your reproductive knowledge.
      • komadori 4y ago
        I think the foetus has a vested interest in not growing too large!
      • 4y ago
• silverlake 4y ago
  I always thought the primary benefit of YC was the brand. It's like an Ivy League school for startups. The article suggested it didn't help much. Perhaps going too big has diluted the YC brand?
  • xwdv 4y ago
    It’s not like an Ivy League, it’s more like joining a frat, but for startups. Except, it used to be more fun, when all companies worked at the same location and you could bump into people in halls and then go do keg stands after work or sleep on couches, etc. Now it’s just remote webinar garbage, talk to some people on Zoom, etc.
    • avree 4y ago
      I think it would have always been the same for overseas companies - I've had several YC-founder friends, and the experience is vastly different if you're YC-in-the-Bay versus YC-elsewhere.
    • necubi 4y ago
      FYI, YC is now back to primarily in person (although there is a remote option, it's strongly encouraged to be in SF).
    • gist 4y ago
      > It’s not like an Ivy League The Ivy League is talked about and well known all over and public knowledge your neighbor your aunt, your wife, your mother, the guy who owns the local bakery etc. It's an international brand. YC known in the startup community. Most likely the guy who runs the local 200 person wholesale operation wouldn't even know about it unless he read about it in the WSJ he reads print edition. Go to sell to that company and they will say HUH what's that mean 'YC'.
      • majani 4y ago
        In my experience, even most people in tech don't know what YC is (I am based in Kenya, so this probably skews the results).
• varelse 4y ago
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• nico 4y ago
  Heard similar opinions from other YC founders before. I think any educational system will run into similar issues. The problem is that the system takes over and becomes more important than the original goal of educating, coaching, helping. And instead it just becomes a conversions and return optimizer. At the end the individuals don’t matter as long as the aggregate produces good enough results.
  • dang 4y ago
    The original goal was to make money by investing in early-stage startups, and that's still the goal. It's true that the energy has changed from "let's hack the economy / see if this works" to "yup it works".
• RestlessMind 4y ago
  A recurrent theme I noticed is that a fully virtual setup (zoom calls, distributed companies in the batch) coupled with varied timezones lead to shallow interactions, weak bonds and no sense of community. Furthermore, if you are in a remote timezone (vs SF/NY) like the author, you will have even more trouble like ungodly meeting hours or very few fellows in the same timezone. This is very similar to how I have experienced remote work as well. Just replace startups with individuals and the takeaways are still the same.
• pclark 4y ago
  This stood out to me: > In their picture of the world, you, the founders, should only build a product and talk to customers, everything else is superfluous and waste of time. Hiring is waste of time, paid advertising is waste of time, content is waste of time, talking to investors is waste of time, getting media coverage is waste of time. IMHO YC doesn’t want you to “build” a product they want you to “grow” a product. I think the YC framework (again IMHO) is to get an idea out and then do everything you can to make it grow 30% each week, and if after a few months you’re obviously failing at that — maybe that product isn’t working. This seems, on the whole, like kind of reasonable high level operating parameters for startups, since traction is what defines revenue and fundraising chances. I do think there is a flip side to this approach which is it can kind of lead to short-term-erism where if things aren’t working you flail about, and/or it can encourage founders to specifically tackle things they can ship quickly rather than things that are maybe more compelling. I would argue that when things are slowly working that’s exactly when you need skilled advisors and founders to give you critical advice. Most dying startup don’t flat line… they slowly grow.
  • arbuge 4y ago
    > In their picture of the world, you, the founders, should only build a product and talk to customers, everything else is superfluous and waste of time. Hiring is waste of time, paid advertising is waste of time, content is waste of time, talking to investors is waste of time, getting media coverage is waste of time. Getting you to focus on those two things, particularly the second one which many technical founders are initially out of their comfort zone doing (I need to work on it myself), is probably a huge value add in itself if they're successful at doing just that.
  • 0xbadcafebee 4y ago
    > get an idea out and then do everything you can to make it grow 30% each week Compounded? After 8 weeks you go from 10 customers to 81, seems doable. But after 6 months you'd have 5,428 customers. Maybe if it was an App Store app? But if you have to talk to any of them, yikes. Might not be the most sustainable rate of growth?
    • 4y ago
• mbesto 4y ago
  YC doesn't scale for students. In fact, no accelerator does (500startups has ~3k investments as well). Accelerators are about relationships, signalling, prestige, advisory, networking, etc. The success is asymmetric, because YC is a numbers game - the more bets they make, the higher likelihood they are to succeed. Many of the negative criticisms here have to do with the fact that there are 4k companies that have gone through YC, and this batch specifically had 400 companies, so it's no wonder there are aspects that are less than ideal.
  • mikrl 4y ago
    >Accelerators are about relationships, signalling, prestige, advisory, networking Interesting to see this after reading the ‘nice vs competent’ threads because everything you mentioned is a soft skill, and correlated with EQ/SQ, niceness and playing of the game. I guess it’s a reminder that there is no objective superior strategy of being nice vs being competent because the game is too complex for that. It’s strategically applying both to increase your own survivability and if you’re so inclined, that of your company too.
• ahstilde 4y ago
  I did YC in W21 in NYC. I was not allowed to meet people in large groups until April (after the batch). I disagree with each and every one of these ratings and conclusions. Firstly, the comparison should be "Is the alternative to YC worth it?" For many companies, the alternative is raising nothing and bootstrapping, or raising at significantly lower valuations. Additionally, I believe founders approach YC the wrong way. YC is not there to coddle you. They are there to give you access to hundreds of exceptional founders, brilliant partners who have seen much more than you, and a fundraising platform. It is on the founder to adapt their behavior to get the most out of Y Combinator. Unfortunately, many founders are unable to do so, and waste the opportunity.
  • itsoktocry 4y ago
    >They are there to give you access to hundreds of exceptional founders Define "exceptional"? Is that major exits above a certain valuation? YC has hundreds of these?
    • deleted 4y ago
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  • rhtgrg 4y ago
    YC will absolutely coddle you if you manage to become one of their “darling” startups, just like any other incubator or VC firm. That’s the type of thing that you have to earn, and if you earn it you don’t need it.
    • acecreamu 4y ago
      That's totally true, we also heard that the attitude is dramatically different if you're in the top of the batch. Unfortunately, long-term performance is proven to not correlate well with performance during the batch, and YC are transparent about it. So I wouldn't recommend over-stressing it.
• ianbutler 4y ago
  I'm surprised they haven't moved back to being in person. That seemed like one of the core benefits to companies, grinding it out with a set of like minded people who can all benefit in one place. Hearing you made a weaker network from YC than you would have liked is concerning, especially when you can find most of YC's wisdom on free videos. Network is one of the primary reasons I had applied and interviewed with YC a few times, both for investor networking and for founder networking and had presumed that was one of their main benefits. I agree with people here saying YC attempting to scale seems to be hurting the overall experience. Hopefully with their recommitment to early stage companies only, this changes for the better. Their earlier wins set them up as the pre-eminent accelerator and diluting that experience those earlier companies had seems like a bad idea to me. They have access to metrics I don't have though (obviously) so who knows I may be totally off base.
  • thesandlord 4y ago
    S22 and W23 have been in-person, W22 was the last remote batch. In person has been a significantly better experience from what I can tell!
    • ianbutler 4y ago
      I'm super glad to hear that!
  • Mikho 4y ago
    Wonder why YC wouldn't split into themed programs with less startups in each like some other accelerators. More focused themed groups could probably be more helpful for startups. Only very broad generic recommendations kind of work for everyone.
• hassy 4y ago
  Did YC S21 which was an all remote batch. my 2c. YC is 100% what you make of it. It's not a lean back experience. I did not meet most of the companies in my batch but I've gotten to know many founders through YC that I would not have otherwise. Founders that have been source of advice and support. Network of clients - yep don't go into YC expecting to sell to other YC cos. It is easier to get warm intros through the network though. YC advice, office hours specifically - it's what you make of it too. Expecting a group partner to know your space in great detail is unreasonable but if you recognize that they've seen hundreds of companies with similar problems and make use of that pattern matching, you can get very valuable advice. Some of the advice I did not take and did the opposite and it was the right decision. And some advice that I did not take was exactly right, but I only saw it in retrospect months later. Fundraising - being a YC company definitely opens doors, and also helps protects you from bad actors who have to think twice before fucking with a YC co. Very valuable for any first-time founder. You have someone to sanity-check everything, terms you're not sure about etc. The bump in valuation is real too. I'd do YC again in a heartbeat.
  • itsoktocry 4y ago
    >Some of the advice I did not take and did the opposite and it was the right decision. And some advice that I did not take was exactly right, but I only saw it in retrospect months later. Sometimes their advice is right, and sometimes it's wrong? That doesn't sound particularly valuable. >Fundraising - being a YC company definitely opens doors, and also helps protects you from bad actors who have to think twice before fucking with a YC co. Very valuable for any first-time founder. I'd love to see this substantiated.
    • chimineycricket 4y ago
      You can't expect them to be oracles though, right? Even the most experienced can give not-good-enough business advice, they don't do it on purpose I imagine.
      • moremetadata 4y ago
        [dead]
• captaintobs 4y ago
  i was looking to do yc but decided against it because of the remote aspect
  • moneywoes 4y ago
    Sounds like it’s back to in person
• ngiyabonga 4y ago
  I find these two concepts [1, 2] at odds with each other. Not a critique on the author - on the contrary, empathy: I felt the same when applying to YC (did not make a batch). On one hand, the general impression you get when preparing for your application (via FAQs, Startup School, YC videos, etc) is very much in line with [1] - YC is looking for _very_ early stage. But once you go through the actual application you feel focus shift towards [2] - metrics and $. That is to say (with admittedly some not-having-been-selected bias), I feel [2] is a significant factor in deciding on applications. So as I weigh in on whether to apply for the next batch, I'm not sure whether a product I've just finished building makes sense for YC and whether I should gamble on attempt #3. I think it would help both YC and founders if they take some steps to make this clear(er) for potential applicants. [1] > In general, there is an evident focus on the very early stage without a product. The main theory and advice are about how to figure out what to do, how to build an MVP, how to launch, how to talk to customers, where to find the first 10 customers, how to raise the first money, and so on. Needless to say, for companies with tens or even hundreds of thousands in revenue it won’t be very valuable. [2] > [...] present dry facts—how much money customers already paid you, what the size of the market, if you count all the units you can sell, what you have actually built and what is working today. And this will always sound bad for anyone, it just can't sound good in the early days.
  • acecreamu 4y ago
    You're right, it feels contradictive. On the defense of YC, I would say, they aim to make you think in terms of metrics and $ from day 1, perhaps?
  • necubi 4y ago
    > But once you go through the actual application you feel focus shift towards [2] - metrics and $. That is to say (with admittedly some not-having-been-selected bias), I feel [2] is a significant factor in deciding on applications. While the application does ask about that (and I'm sure it's very helpful for getting in if you've already demonstrated traction) it's absolutely not required to have any revenue or users when getting accepted into YC. I'm in the current batch. We applied before we'd built anything and definitely before we had any users (we didn't even have a name yet -- we had to pick one in order to submit the application). Across the batch there are a few companies that came in with strong traction but they're definitely in the minority.
• itsoktocry 4y ago
  >I’ve seen enough cases when saying “oh, I’m also from YC” didn’t move the needle. When you're one of a thousand companies every year, why would it? Are YC particularly discerning, or are they optimizing getting as many through the "system" as possible?
  • acecreamu 4y ago
    > When you're one of a thousand companies every year, why would it? Exactly, therefore making very questionable the whole "YC network" concept
• celestialcheese 4y ago
  > In the end, YC is an investor, an investor with a strong reputation, who is now sitting in a very comfortable chair and can select the best startups and invest in them at a meager price Wait what? a ~$7m valuation, _pre product_, is considered meager these days?
  • HWR_14 4y ago
    A ~$7MM valuation? Did you read the same math I did? I see an investment at ~$1.8MM valuation and another investment as an MFN SAFE.
• dkuntz2 4y ago
  So much of this seems to just be a misunderstanding of how venture capital works. Like, yes, obviously they want your pitch to minimize flashy and showy and maximize real numbers like customer count, average spend, and market size. I may have a low opinion of venture capitalists but at the end of the day they're not complete idiots. They're operating with a known framework, they're trying to maximize their own returns, and the only way to know if that will happen is to know hard numbers (like how many customers you have, how much money you have in the bank, how quickly you spend money), all the hype and sales charisma is not going to help you, and if that's your entire presentation to investors they're going to tell _other_ investors not to waste their time talking to you. The reason you're getting advice to minimize hype and showmanship and maximize hard numbers is because when you get into those investor meetings they're going to cut off hype and showmanship and ask you to just tell them the numbers. This isn't some "make life easier for YC and make every startup fit into a box" thing, it's just how investor pitches work.
• _sentient 4y ago
  I wonder how much of this is a function of the W22 batch being remote. We all know the benefits: The fundraising pop is great, the brand patina helps you hire better talent than you would otherwise, the advice can be useful, especially for first-time founders, you can sell into the YC network, etc. All of this pales, IMO, to the value of the personal connections you make in the program. It sounds like OP, by virtue of being 8,400 miles away, missed out on that. I went through YC in S14, and I found the in-person experience to be invaluable. There were 80 companies at the time, so we had somewhere around ~200 founders in our batch. Even at that scale, you're not going to get to know everyone, and I found myself gravitating toward a smaller group of people who I connected with personally. I'm not going to lie, YC was stressful. You're dropped in amongst bunch of smart and accomplished people who are sprinting as fast as possible toward the all-consuming Demo Day. It's a bit of a pressure cooker, but that's not unintentional. Those shared experiences formed the substrate of some amazing, life-long friendships. I have 15+ close friends who went through S14. We talk every day. We've been in each other's weddings. We've watched each other have kids, shut down companies, start new ones, get acquired for enormous amounts of money, and everything in between. It's been incredible watching their trajectories over the last 9 years. Some are C-level execs at public companies, some are tier 1 VCs, a couple are billionaires, some are homesteaders and amazing parents. All of them are solid, kind, high-quality people, the likes of which you are unlikely to meet in the regular world. I think you lose much of that in the remote-only format. If I were to go through a remote-only accelerator located in Singapore, I imagine I would make few meaningful personal connections. Like it or not, Zoom is a pretty thin facsimile of real human interaction. My life's trajectory is meaningfully better for the friendships I made in S14, and I expect that trend to keep compounding over the next 30 years. If you missed that benefit, you missed much of what makes YC special.
  • anurag_baddam 4y ago
    This reminds of my college experience. My friends and I were always stressed trying to finish the next CS project or study for the next exam but we came out of it extremely close to one another. Nothing builds friendships like shared pain I guess.
  • Eiriksmal 4y ago
• cl42 4y ago
  I went through YC in S12 and have been investing in YC companies + active on Bookface and YC’s founder matching program. I recommend YC to almost everyone I meet and plan to apply again when/if I am working on a new product company. We’re all adults and we all have agency. Every community is a function of how much you put into it; how much you invest in getting to know others. It feels like the author expected YC to do all the work of community engagement for him. That’s 100% not what YC is about. Folks like Michael Seibel, Garry Tan, and other partners all respond to emails + engage as much (or as little) as you ask them to. It's unfortunate the author had an experience that wasn't ideal, but I'd be wary of saying this is representative.
  • rexreed 4y ago
    When you recommend YC, how do you help the people you recommend actually get in to the YC program?
    • cl42 4y ago
      Do the things that make you seem like a great startup/founder regardless of YC: show you can execute. This means coding or launching experiments, and show that whatever you're doing is getting some sort of a market response. A lot of people think YC has some secret formula they will teach you (I think maybe OP made this mistake?), in reality they are very open: build product and talk to users. If you can do that well, you'll get in. It's amazing how few people actually "get" this, though. I recently met with a friend who is running a consulting firm and is convinced he has a product... But there's no demo, customers can't just sign up -- they need to speak with him and it takes a few weeks to onboard them, etc... Yet his deep (and well-meaning, I'm sure!) belief is that he has a product. Nothing I say will convince him otherwise. 10 years post YC, I find most of the issues people have with startups (getting in to YC included) is they overcomplicate their interpretation of what YC says you should do.
    • acecreamu 4y ago
      There is a referral program, hey
• yaseer 4y ago
  We did W21, and whilst the point that 'remote < in-person' has some validity, I fundamentally disagree on the points about YC's network, partners and community. Most of the YC network effects occur after demo day. Likewise, most of the socialising occurs after demo day, as during the batch companies have little time to socialise. You get out of the network what you put in. Similarly, with YC partner advice - it depends on how you utilise it. To be honest, we probably under-utilise the partners (we made most of our stupid startup mistakes pre-YC). But looking at batch-mates I've seen companies attribute pivotal decisions to YC advice, particularly during funding rounds. I'd liken it a college experience - you won't be spoon-fed like you were in preschool. You must be self-directed to be successful, and there's always someone smarter and more successful than you to learn from.
• mikekij 4y ago
  I have minimal contact with YC these days, and have no particular motivation to artificially inflate the value of the program. YC was transformational for my company (MedCrypt). I have almost zero negative things to say about it, and would do it again immediately with my next company (despite probably not needing help raising the first $500k for a company). I can't think of a situation where I would recommend a company not accept a spot in YC.
• rhtgrg 4y ago
  YC used to be for people who investors wouldn’t normally take a chance on…and imo, it still is. If you have a FAANG attached to your name with multiple years of experience, you can probably find better deals elsewhere. YC has done a relatively good job of scaling themselves, but it has never been a “one size fits all” funding solution, and if you are a founder you’d be wise to consider your options carefully. That being said, removing the relocation requirement was a big mistake — it was partially a forced move, but it’s not at all surprising that you get a significantly degraded founder experience if you are not in SF.
  • opportune 4y ago
    I have FAANG attached to my name with multiple years of experience, where else would you recommend as a replacement or competitor to YC? I am aware of angel investors’ existence but looking for anything besides that
    • rhtgrg 4y ago
      It depends on what your goals are and what your business needs. I would recommend reaching out to your local angel investors —- even if you don’t plan to fundraise with them, they usually have an avenue for you to get in touch directly with investors —- and they can interview you about your startup and dispense free advice that is much more informed than what I can give you here. Assuming you are at a very nascent stage with your startup, there are still all sorts of options out there, including but not limited to —- Kickstarter, loans, raising from friends and family, running on a shoestring budget offshore, raising convertible notes from local investors (you probably have some of these people in your extended network already), selling preorders, self-funding (e.g. via collateral loans), grants, incubators (other than YC), etc. There are a lot of variables, and several options to choose from depending on your particulars.
      • opportune 4y ago
        Thanks! Yeah I guess to be more specific, what meant to ask is: besides YC and angel investors, what will help me as much or better than YC? Particularly in the context of the person I was replying to saying that people with my background can potentially find better deals than with YC (which I guess I assumed meant in terms of VC - you’re right that it probably helps with alternative funding routes too). Like, what better incubators or accelerators will be looking at 5+ years at FAANG as a shoe-in (honestly, I’m a bit skeptical that’s even a shoe in at at YC, but what do I know) and give me better terms and/or more support? I know Sequioa has a small incubator now and I’ve actually talked to them, but I assume there are some good ones out there that would be hard to learn about except through word of mouth.
• deleted 4y ago
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• seizethecheese 4y ago
  > Now, with a 500k deal, the amount is more substantial, but in turn, its terms are not super funder-friendly. Imho, the previous 125k deal was better for the founders since once the company gets accepted to YC it can raise easily a lot more money and on better terms. Wait, the additional $375k is an uncapped SAFE. How could a company “easily raise at better terms”?
  • acecreamu 4y ago
    Add one angel or one early commit of 10k to it and the uncapped SAFE turns into a very bad SAFE. Basically it blocks you from flexibility of building up fundraising moment gradually.
    • vmatsiiako 4y ago
      Not true. You can still raise on uncapped SAFEs. This will not trigger the YC MFN safe
      • rvnx 4y ago
        According to the contract, in exchange of 375K USD (+/- salary for 1.5 developer) you agree to this when you sign the MFN: == If the Company issues any Subsequent Convertible Securities with terms more favorable than those of this Safe (including, without limitation, a valuation cap and/or discount) prior to termination of this Safe, the Company will promptly provide YCombinator with written notice thereof, together with a copy of such Subsequent Convertible Securities and, upon written request of YCombinator, any additional information related to such Subsequent Convertible Securities as may be reasonably requested by the Investor. In the event YCombinator determines that the terms of the Subsequent Convertible Securities are preferable to the terms of this instrument, YCombinator will notify the Company in writing within 10 days. Promptly after receipt of such written notice from the Investor, the Company agrees to amend and restate this instrument to be identical to the instrument(s) evidencing the Subsequent Convertible Securities. == So, any type of issue triggers the MFN and the jackpot to YC.
        • 4y ago
• notahacker 4y ago
  Most surprising quote to me was this: If you have some kind of b2c or Enterprise business, all you will get is a knowledge exchange with homies. YC does not have any industrial partners, and YC partners themselves will not do external intros since this is a big part of other accelerators' pitch. Obviously YC can't compete with vertical-focused accelerators for depth of industry knowledge and day-to-day access to corporate sponsors, but knowing when and who and how to approach is one of the biggest challenges for an early stage startup and one where I'd assume YC's network was big enough to add value (beyond a list of companies to send cold emails to indiscriminately)
  • dang 4y ago
    I don't know what "industrial partners" are but "YC partners will not do external intros" is not true, and a weird thing to say since it wouldn't be in their interest.
• yeldarb 4y ago
  We did YC in S20 (fully remote during COVID) and, as a Silicon Valley outsider, it was absolutely, 100%, no-questions-asked worth it for the fundraising credibility alone. After demo day, we were able to get in the room with dozens of top-tier investors, got multiple term sheets, and were able to pick the seed investors that were right for our business. This is a luxury none of my non-YC founder friends have had (being outside of Silicon Valley it was just such a stark, stark contrast in our fundraising experience to my friends'). Fundraising has always been a struggle and giant distraction for them. The doors YC opened for us let us focus on building and have had an outsized impact on our trajectory. Re the 7%: I'd much rather have 93% of a giant pie over 100% of a small one. Edit: I should caveat that YC and VC in general are built around finding & amplifying outliers. If you don't think you are an outlier founder and aren't trying to build an outlier company, our experience probably isn't relevant.
• vmatsiiako 4y ago
  From my personal experience, the greatest benefit of YC is being part of a group of so many brilliant founders that are trying to create amazing things - this creates healthy peer pressure and pushes you forward A LOT. As a result, many companies achieve absolutely crazy results in just 3 months This is even better now that YC is back in person. I think W22 batch was the last remote batch
• rubenfiszel 4y ago
  S22, solo founder, open-source infra + internal tools (windmill.dev). As the other ones in this thread have mentionned, YC is what you make out of it. For the fundraising alone, it allowed me to raise - a non US solo founder - at very comfortable terms and on the financial aspect alone it would have been worth it. But most importantly, the hardest part to start a company in my opinion is to keep being motivated. I was under the impression that surely a successful startup wouldn't have to go to any struggle and that founders were a special - genius-like - kind of breed. Being in YC opened my eyes: - everyone struggle, relax and keep working - the great people of this world are smart, but not crazy smart. They are crazy pragmatic, and crazy motivated, which you can be TOO - YC founders are nice people, and they make for great friends to keep. Those people are the only one that will understand truly what you're going through. YC was a transformational experience for me and I would recommend it to all. EDIT: To give a more balanced view, YC was also stressful, and the expectations were the same, solo founder or not. Be prepared for an intense ride.
  • acecreamu 4y ago
    These are good points! Especially for founders who don't have any founder-group in the first place, YC may be a source to create one. These things are really important, just that in comparison I saw alternatives which can help with it better (being in a small in-person group, for example)
  • mr90210 4y ago
    I didn’t know YC accepted solo founders. Congrats! I’ll definitely check your product out.
  • hu3 4y ago
    > a non US solo founder As a non US citizen, I'm interested so bear with me: 1) You had move to US right? 2) Did YC provide you the finances to do so beforehand? 3) What kind of Visa status should/could I seek for this? No need to answer what you don't feel comfortable. I would appreciate any pointers.
    • mmq 4y ago
• ychnthrowaway24 4y ago
  I did YC also remote, though a bit earlier than the article's author. The part that stood out to me was > In their picture of the world, you, the founders, should only build a product and talk to customers, everything else is superfluous and waste of time. Hiring is waste of time, paid advertising is waste of time, content is waste of time, talking to investors is waste of time, getting media coverage is waste of time. I talked to many other founders who also disliked this view (only talk to customers and build), and they all tended to be the worse founders in the batch - a large part of the value add yc provides imo is acting as coach/therapist and pushing back against founder pschology/thinking traps. The view that many things founders want to do early is a waste of time is correct and works, and hearing that can be jarring for many.
  • abe94 4y ago
    The founder psychology bit was key for us as well. You may not like hearing what you need to hear. Hiring before product market fit, increases the chance of death
• yawboakye 4y ago
  [flagged]
• rsp1984 4y ago
  Their logic can be understood: make a good product, and the rest will catch up. But in real life marketing and hype really matters, and when everyone does these things while you naively sit and code, they get an advantage in the market, and you get your cool product. I sometimes get the feeling, also by watching their public content on YT, that a lot of YC advice, especially w.r.t. what to prioritize, is from an era of startups about 10-15 years ago. Back then there were about 10x fewer SaaS startups (maybe that's a conservative estimate) and if you had a decent product that solved a problem for your customers and you were just plugging away at it, that was enough to get noticed and grow. Nowadays every worthwhile niche seems to have 10-15 companies in it in no time, all of them doing more or less the same thing. Even if your company differentiates in a very special and useful way, getting that across to your potential customers is a totally different game now. You basically need 1-2 full time staff doing nothing but content creation and social media outreach marketing. Also locking in (micro-) influencers in your niche is key. Once they start promoting your competitors it's game over. From the content that I see publicly on YT etc. it seems to me that YC thinks such things are basically a waste of time. And back in the late 2000s and early 2010s that was largely true. If you are targeting a narrow hyper-niche it is probably still true, however it's just not the reality for 99% of today's startups, even YC ones.
  • baxtr 4y ago
    Super interesting. Do you have an example in mind where a startup excels through marketing in a crowded niche with the mentioned 10-15 startups?
    • lossolo 4y ago
      In the crypto space currently, there are projects that excel in terms of technological merits, making them far superior to their competition. However, the competition often has better marketing and generates more hype and win the market.
      • ccortes 4y ago
        Technological merits are not the product.
• gamblor956 4y ago
  At least from the perspective of a potential customer, I now view Y Combinator as a red flag for a service provider, for a variety of reasons. The two big ones: YC companies try to "grow" too fast without any concern to the dynamics of how their market is supposed to work after they've achieved their targeted scale. The basic playbook seems to be: give stuff away for free until you kill the incumbents, then jack up prices to way more than what the incumbents used to charge while simultaneously reducing the services/products offered. There's also the issue of companies basing their business models around regulatory arbitrage, ignoring the rules that incumbents (are forced to) live by and then using their size to try to get away with their past misbehavior.
  • acecreamu 4y ago
    That's an interesting perspective! Do you feel YC companies get too pampered / arrogant?
  • satvikpendem 4y ago
    I don't see how this is specific to YC and not to other VCs too, unless you do mean to include other VCs too in your viewpoint.
    • gamblor956 4y ago
      YC at one point went out of its way to encourage regulatory arbitrage as a viable business plan. It's great for investors, it sucks for everyone else, and it's a huge part of why tech is so hated right now.
• paxys 4y ago
  Think of YC like a Harvard MBA. You may or may not learn anything substantial from it. The quality of education may or may not be better than your local state school. Graduating with that brand, however, may be valuable enough in itself to justify spending the hundreds of thousands of dollars. How you leverage the network is entirely up to you.
• ginger2016 4y ago
  I didn't go to YC. My impression of YC is from news articles and hacker news. I believe that YC is good only if it helps you raise money. Their advice is not worth it because advice is free on YouTube. Let's take PG; he often gives a lot of general and specific advice; he is a great writer and a fascinating mind. I enjoy reading his articles; they are outstanding, but they aren't any different from the many YouTubers giving advice. Unless you get personal time with YC staff, their services are not unique. Do you need to be Peter Mckinnon’s apprentice to learn photography? No, likewise you don’t need YC.
  • kingboss 4y ago
    If you think PG is a great writer and fascinating mind you absolutely need to expand your horizons.
    • ginger2016 4y ago
      I am not saying PG is Shakespeare, PG is good in his field of writing, i.e. giving random(but useful) advice to wannabe founders who listen.
• presidentender 4y ago
  Is there a way to get the Bookface knowledge base without participating in YC?
  • deleted 4y ago
    [deleted]
• weisser 4y ago
  "You, the founders, should only build a product and talk to customers; everything else is superfluous and a waste of time." I found it interesting that this seems to be described as bad advice that boxes founders in. "Hiring is waste of time, paid advertising is waste of time, content is waste of time, talking to investors is waste of time, getting media coverage is waste of time." The above all seem to be like a waste of time—but the OP is claiming otherwise. Perhaps this speaks to some YC companies being more mature than they used to be when they enter a cohort?
• aubanel 4y ago
  Anyone have similar insights about Entrepreneur First? Btw I still don't understand if during the program they you a salary anyway or only if they end up taking a stake in your company.
  • acecreamu 4y ago
    In fact I (OP) have, we went through EF before YC. They do give you a stipend regardless whether you make it to the second stage (investment)
    • aubanel 4y ago
      Thanks a lot for the info!
• yashap 4y ago
  The “credibility” value is pretty huge IMO. If you’re a small startup, the assumption from potential customers, employees and investors is that you’re super likely to fail, probably soon. Because YC companies have a strong track record, you instantly gain credibility with potential customers, employees and investors. It’s worth 7% of the company for most, because it makes it more than 7% easier to hire, sell and find raise, and those 3 things are the most important things for most startups.
• peter_d_sherman 4y ago
  Interesting article! >"Remember: accelerators and their help are temporary but the equity you give away forever" True! But the other side of that argument ("The opposite of a fact is falsehood, but the opposite of one profound truth may very well be another profound truth." - Niels Bohr) -- is that some entrepreneurial endeavors require the assistance of multiple specialized parties without whose help the entrepreneurial endeavor will not succed, and: Owning only part of a business venture that is successful -- might very well be more valuable -- than owning all of a business venture that is unsuccessful... In other words, a founder who accepts capital for equity (AKA "Debt") in whatever form -- is paying a percentage of future rewards for a better chance at initial success, and faster growth once that initial success has been achieved... Now, the counter-counter argument to the one I make above, which is applicable to myself, which is applicable to a few other founders, is that we don't want to give away any equity in our future companies -- thus our trade-off is one of guaranteed or near-guaranteed (or at least easier) potential early success and faster growth curves (what we give up) -- in exchange for doing things the hard way, doing things the old-fashioned way, doing things the debt-free way -- at the expense of time (and watching many other people who took other people's money be more successful in the short and mid-term) -- but NOT at the expense of education -- a real and practical business education that could not be had at most universities, at most institutions of higher learning, even in their MBA programs... So which of these two approaches is right? Well, I don't think either one of them is wrong -- it all depends on the individual or individuals involved and their personal preferences, goals and values... The only one differentiator between the two, perhaps, could happen many years in the future -- a company which has sold too much of its equity could become the subject of a hostile takeover... A single founder who has never given so much as a single percent of equity -- will have his company taken from him over "his (proverbially) dead body"... That differentiator is ownership -- true ownership -- of a company... Still, there is value in "team lifts", and putting together teams to accomplish what single founders cannot accomplish alone... Related: Joel Spolsky, "Foreword to 'Eric Sink on the Business of Software'": https://www.joelonsoftware.com/2006/04/07/foreword-to-8220eric-sink-on-the-business-of-software8221/ https://www.joelonsoftware.com/2006/04/07/foreword-to-8220er...
• giorgiop 4y ago
  Thanks for writing this up. The white on black background made me blind for today.
• dang 4y ago
  It's true that YC will tell you over and over to (1) work on your product and (2) talk to users. Those are the "make" and "people" in "make something people want". If you want to focus on marketing tricks / media hype / "content" / that kind of thing, you're going to hear the above repeatedly, since those are neither (1) nor (2). For my part this reflects well on YC. In fact it's a little reassuring to hear that this is what (some) people are complaining about. If you're a YC startup and want to launch on HN (https://news.ycombinator.com/launches https://news.ycombinator.com/launches) you're going to hear even more of it from me. I like this part: "present dry facts—how much money customers already paid you, what the size of the market, if you count all the units you can sell, what you have actually built and what is working today." On the HN side we also push for "just the facts" and urge founders to cut hype and marketing speak. That's as much about the HN audience as core values, but it's nice (and for me a relief) that those overlap. If building a valuable product, talking to users, and focusing on facts sounds good to you, you should consider applying to YC. (feel free to discount this to zero based on my bias but I wanted to say it anyway!)
  • joshxyz 4y ago
    this to me is very appealing. while i dont know if ill get into this upcoming batch, all i know is i can just keep watching and reading yc's free content and i know i'll still be on the right track. most of it is boring and repetitive, but effective.
  • rsp1984 4y ago
    Appreciate the chime-in and honesty. > If building a valuable product, talking to users, and focusing on facts sounds good to you, you should consider applying to YC. Also being perfectly honest, it does sound very appealing, but I'm afraid it unfortunately just isn't what makes startups successful in 2023. Speaking from personal experience and carrying the battle scars.
    • dang 4y ago
      It's certainly not sufficient and experiencing that in practice is painful and sucks.
• neric 4y ago
  Geez my eyes, what happened to rule #1 never use pure black?
• jawns 4y ago
  At the very bottom, in a post-script: > The constant comparison and growth benchmarking triggered us to look differently at our business and we decided to wind up its operation right after the Demo Day. What happens in this scenario? YC gave them $500K in exchange for 7% of the business, and then they immediately shuttered the business? Did they get to keep the $500K?
  • iamnafets 4y ago
    Absolutely not. SAFE investments have liquidation preferences - the investors will get what's the left of the money back.
  • acecreamu 4y ago
    We didn't take 375k in fact. In W22 batch they were optional, and would trigger MFN for many. As for the rest of money, we returned what has been left. That's why closing so rapidly - to be able to return more.
    • satvikpendem 4y ago
      Why not take the 375k and/or pivot?
      • acecreamu 4y ago
        The dilution at that point would be unbearable
        • satvikpendem 4y ago
          I saw your other comment, makes sense. Are you working on a new startup then?
          • acecreamu 4y ago
            Yes sir, slise.xyz - new market, new team, much larger and more painful problem to tackle. Lessons learned.
• neric 4y ago
  [dupe]
• deleted 4y ago
  [deleted]
• hinkley 4y ago
  There's something to be said for having churn in some disciplines rather than a comfortable consistency. And that something is Goodhart's Law. The longer the game, the more game theory you're dealing with.
• tschesnok 4y ago
  Wow. In the footnote they mention they shut down right after demo day? Perhaps I'm old school but I always had a huge feeling of indebtedness to my investors. So here they lose all the money within 3 months and write a scathing review to boot? Is it not a two way street?
  • hk__2 4y ago
    This is answered in the disclaimer at the top of the post: > YC are the ones who teach how important is negative feedback for improvement.
  • frozenport 4y ago
    >> I always had a huge feeling of indebtedness to my investors With early stage, low capital startups, relationship is more like an employer.
  • awwstn 4y ago
    next post will be: how i got into YC, shut down my company, and then added x subscribers to my substack by simply trash talking YC
    • Ecstatify 4y ago
      Positive Review: "Upstanding fellow, pillar of the community" Negative Review: "Degenerate, bad mindset, red flags everywhere"
  • ntonozzi 4y ago
    Typically and hopefully they would have to return the money that they did not spend, and it's better for the investors to get that portion of their money back than to have founders run it into the ground.
  • acecreamu 4y ago
    That's why we did it, instead of spending money dragging the decision or even taking more money and spending them while building mediocre company, we wind up operations in a shortest term, and returned everything, to minimize damage for investors. We even cancelled the checks which were about to get wired. How to perceive it—is up to you, we sleep well because we did the best we could in that situation.
• b7r6 4y ago
  There is nothing wrong with being the category-defining early-stage investment company, and doing it as a for-profit business that's optimized for good financial outcomes. I think what some of the insiders (like the OP) and semi-adjacent outsiders (like me) might be feeling a little queasy about is that YC began with a pretty clearly stated goal (in addition to making money) around disrupting the unproductive importance of high-status networks and signaling like elite university educations and to a lot of us (even people who didn't apply like me) that was really inspiring. And to at least some degree, YC is now a high-status network that signals well. There's nothing uniquely bad about it, it's kind of the default throughout human history, and they are completely transparent about being a for-profit company, but it's also ok to be a little sad that it's not quite as idealistic as it used to be.
• jsemrau 4y ago
  I am surprised they got with that idea into the Batch.
  • acecreamu 4y ago
    Then you will be even more surprised to see another AI Recommendations in the most recent batch
    • jsemrau 4y ago
      That's even more disappointing to hear.
• alfl 4y ago
  We were W22. It was a HUGE batch and we were raising at a large valuation, during the boom, so the YC standard deal didn't make financial sense for us. IIRC as soon as we signed the deal they would have 10x'd. Overall, I think not signing was a mistake. But YC is very expensive.
• preinheimer 4y ago
  Prior to covid I was paying for a business coach/group (not yc, just paid with cash no equity). We had monthly group meetings and I had a one on one with my coach every month. The value I got out of the group took a huge nosedive when we went remote. I felt like many of my fellow attendees weren’t fully present in our group meetings, and the one on ones weren’t the same. So I left. Just putting stuff on Zoom doesn’t make it the same. I think a lot of orgs are struggling to make things work in the new medium.
• jongjong 4y ago
  Oh my, $150K for 7% equity sounds really good. I would offer 30% equity for that amount. I've been trying to raise $20K for the last 10 years and never managed though one time someone took pity on me and gave me $20K in cryptocurrency as a gift. I managed to stake that on a crypto project in such a way that it was soon generating me around $35K to $70K per year and I used the money to fund myself to work on a Decentralized Exchange for 3 full years which is now operational. Still nobody will invest in me.
  • trevmckendrick 4y ago
    Can I please recommend w/ no ill intent that you take news courses of action if you've unable to achieve raising a relatively low amount of capital after 10 year?
    • jongjong 4y ago
      I already met many investors and millionaire founders. I even met 2 founders who are now billionaires and many others who went on to become multimillionaires. Nowadays most of them won't even answer my emails. One of the founders I met before they were successful (and who sold their startup for millions) won't even give me a $2000 per year support contract though they continue to use my open source project and ask me questions. I'm thinking I've been blacklisted. It doesn't make sense right? Does it make sense that someone I met 10 years ago, was using my open source project as part of their startup and was having conversations with me every couple of months throughout the whole 10 years (they even let me log into their production system with 30K concurrent users to help fix a bug) and then went on to make millions won't even support my project with a $2000 a year contract? Probably something weird going on. This is not just about one example, it's every now-successful founder I've ever met. Nobody talks to me and I did nothing wrong except build some products that work really well.
      • acecreamu 4y ago
        Don't try to blame others, see what works for you and where you can improve. Some people can make other run for them and send donations without even trying. It's not about them or cruel word. Your problems are about you, and you need to either solve them or to switch to something that works for you, or you will be suffering the rest of life.
• dangoodmanUT 4y ago
  YC has both transformed by company and saved my role as a founder. I'll be completely transparent and say I disagree with a lot of the sentiment. I'll do my best to briefly explain why. From talking to many YC alumn, I've observed a strong correlation with business success and YC opinion. Every founder that is no longer operating within 2 years of YC has a generally negative sentiment. Others are quite positive. Not sure what biases are at play, but the correlation is clear. As others have said, YC is what you make of it. I (S22) did not ever feel like I was getting cookie cutter advice from my GPs. When I talked to my partners, we really honed in on our issues specifically. Every time the GPs told us something they were right, whether it took me 10 seconds or 10 weeks to accept it. And to be fair the cookie cutter and repetitive advice they do give is because people generally don't listen if they just say it once or twice, and it's also REALLY important. > Hiring is waste of time, paid advertising is waste of time, content is waste of time, talking to investors is waste of time, getting media coverage is waste of time. This is dangerously oversimplified, these are all things that they suggest at various stages. Their advice for you depends greatly on your stage. Early on they told us paid placement is innapropriate. Later they told us it would be a great way to quickly validate changes and iterations. Depends on where you are and what you do. Yeah YC makes fundraising orders of magnitude easier. Yeah in person definitely makes it way better. I've no regrets, would do YC again every time. I've also heard similar sentiment from investors! "7% it too much for $125k", etc. But it's the prestige of the brand, and the super powerful network. I'm not part of any other pre-defined networks so I don't really know how to compare, but YC is POWERFUL. Nobody I've talked with that had those opinions had alternatives to getting that network or valuation that quickly, unless your already a startup star. The big caveat is that my timezone lined up and I had many in person options, I also did not shut down immediately after demo day. I'm sure that made our experiences dramatically different. Being in a group of founders with similar experiences and comfortable being vulnerable with each other is the greatest therapy any founder could ask for. I would warn non-YC founders reading this that this founders experience is highly abnormal for YC, and to talk to many more YC founders before drawing your own conclusions.
• dangoodmanUT 4y ago
  I would put that footnote at the top, it's very important context.
  • acecreamu 4y ago
    I wrote the original article before we even thought about it, if it helps.
• jimnotgym 4y ago
  Doesn't this miss the point. If you need 150k to start your company it is difficult to find other options. You have a booking dollar idea, the drive and knowledge to set it through, but no cash. You need an early stage investor. What you are paying for is the massive risk that they are tipping that money down the drain. The other stuff is just value-add
  • acecreamu 4y ago
    The uncomfortable truth is that YC is a highly competitive program, the best teams invest a lot into preparation to get there. If you have nothing and need 150k to start your company, than you have better ways to find it, than the most prestigious accelerator in the world.
• joshxyz 4y ago
  i find this fair and informative. i havent got into yc yet but their free content is very valuable in giving me direction, and the things mentioned in the article are very valuable to me who is still an outsider. to some they're like "meh", but to me those subtle things really make or break your company. it's like yc has solid focus on your company's fundamentals and reminding you of it again and again so you dont get distracted.
• rvba 4y ago
  Thought experiment: if you had a successfull bootstrapped company that didnt need external financing.. how much would it cost to get Y combinator advice? Basically how much should you pay to get their package? They have 200 companies with 125k investment? So 25 per year? Would they offer their "service" for 100k usd?
• phendrenad2 4y ago
  Is it worth the money? I think what YC gets you, you can't find elsewhere for less money. But maybe this industry is ready to be disrupted, and someone could create a YC competitor that automates things like office hours with ChatGPT4. In fact you could pitch this idea to YC, and YC could spawn its own successor.
• anyfactor 4y ago
  I am an outsider who observed YC companies and their founders for a while. YC is an institution in the VC world and YC is extremely specific about what people they want in their program. But you have to understand the people running YC has probably told many many founders "I am not going to spoonfeed you everything, figure that sh*t on your own". YC will give you the initial boost and you make up what you want to make up for it. Making it to YC doesn't mean you are going to be a unicorn and they know it. Considering the amount of people they take in, it is not possible to make everyone special. I think the picking criteria explcitely mentions that there are companies that are actually too good for YC meaning that they can certainly generate a sustainable income but they just don't fit the bill. The bill is about, a VC who is a startup founder. When the dust settles you either get a founder of a successful company or a VC who came from a failed or acquired startup. That is what I see standing from outside. YC want people who fit the VC personality and posses the youth and the desparation of scaling up a startup. Someone who can work incredibly hard and shake hands with the sweater vest people. I honestly don't think the startup aspect has much to do with. It doesn't have to be one person, they want this very particular personality trait shared among the co-founders. This is not a criticism at all. But I think YC doesn't want companies they want people. Some people are just not that.
• nkotov 4y ago
  I did YC in S20 remotely from Charlotte, NC. As a first time founder doing things solo, it was a great experience and most importantly, opened up a lot of doors that were previously closed. I met so many amazing people who previously I didn't have access to. Plus, the YC community was friendly to me when I had a lot of questions. We had a terrible experience fundraising simply because I didn't understand how to do it properly. There were a lot of stuff in between the lines that I wasn't aware of. Also what I wished I would've done more of was spend time with fellow founders. It being remote, I felt I was missing the "energy" of being in the same spot as everyone else. Overall, I'm glad that I went through YC and even though my startup didn't pan out the way I wanted to, it opened new doors and a lot of opportunities. If I was to do another startup, I would go through YC again.
• ash_rahman 4y ago
  I am raising for playwhitelabel dot com with following stats - revenue US$16K+ (since May, 2022), paid users 120+ (including presales), and don't have a product yet. As a 2-person team, looking forward to growing with a product, and a bit of capital, YC will suite us. But it's highly unlikely we will even get an interview. I wonder why all those later stage YC companies are being taught SuS content.
• 1vuio0pswjnm7 4y ago
  "B) Sell your product to startups and see a lot of benefits from gaining access to the YC network." Keep everything inside the distorted reality of the "tech" community. The "YC Network" sounds like MLM, something like Herbalife or Amway. This reminded me of a recent NYT article that mentioned YC. https://www.nytimes.com/2023/03/17/technology/svb-tech-start-ups.html https://www.nytimes.com/2023/03/17/technology/svb-tech-start... The article discussed how SVB made loans to "tech" start-up founders who had just received funds from "tech" VC, the bank's primary customers. First, cults require some "reality-distortion" to use Steve Jobs' term. Close people off from the outside world, e.g., traditional banks. "These companies put a priority on breakneck growth, shift strategies frequently and celebrate failure as a learning opportunity. They are often worth billions before ever turning a profit, and they can go from silly idea to behemoth at astonishing speed. Most crucially, they rely on a tight network of money, workers, founders and service providers to function. That unique and often irrational reality required a specialized bank." What about the common, rational reality that we all share. The one that informs us that, e.g., MLM, cults, Ponzi schemes, and the like are not what we want. For example, the reality of getting a mortgage for a first home. "SVB's dominance was well known at Y Combinator, a start-up incubator. Dozens of tech founders who participated in Y Combinator last year were told to open bank accounts at SVB, and they were introduced to SVB bankers at Y Combinator events, said three people who took part in Y Combinator's 2022 class of tech entrepreneurs over the summer. One described a cocktail hour mixer in which he was introduced to an SVB banker who could provide a loan to his start-up once he graduated from Y Combinator's program. Six months later, when he needed a loan to buy his first home, he went to SVB. The bank looked at his company's valuation, based on the money it had raised in its first round of funding, and spoke to investors of his company. It granted a loan after two other banks turned him down, he said. SVB's home loans were significantly better than those from traditional banks, four people who received them said. The loans were $2.5 million to $6 million, with interest rates under 2.6 percent. Other banks had turned them down or, when given quotes for interest rates, offered over 3 percent, the people said." Let's see. "Tech" VC use a special bank. The special bank's customers are generally only either "tech" VC or "tech" start-up founders. The "tech" VC deposit funds into "tech" start-up founder bank accounts. Then the special bank loans money (that likely came from "tech" VC) to "tech" start-up founders, based on dubious valuations made by the bank's "tech" VC customers. The entire scheme is fully insulated from the reality of the outside world. Someone I know who studied finance read this NYT article and commented that the term "venture debt" reminded him of "EBITDA",^1 specifically Munger's comment about replacing every instance of the acronym EBITDA with the words "bullshit earnings". 1. https://www.youtube.com/watch?v=tvnKylAyLbQ https://www.youtube.com/watch?v=tvnKylAyLbQ
• WORMS_EAT_WORMS 4y ago
  I’m commenting a bit late but still want to share some thoughts for some readers hopefully. Life is weird. Business is weird. Relationships are weird. Opportunities are weird. School is weird. Etc. Some things, identical as can be, can work for people while doing nothing for others. Everything impacts at different rates. The one constant is you get out of it what you put into it. The Y program is by design not going to churn 100% results for everyone for — both the investors and the startups. You get a shot and you take it and move on. Best of luck to you all.
• prophesi 4y ago
  I have no input on the value of YC and the companies they back, but it's frustrating how their hiring posts on HN itself isn't allowed to be commented on. Maybe then we'd have a better feedback loop on their incubation.
• _4ekt 4y ago
  I was also in the W22 batch. While I don't know Oleksii (to his point!), I'm left thinking that he might not have understood and acted on YC's advice. YC coached us on all the things that Oleksii thought were portrayed as a waste of time: talking to investors, hiring, content, etc. The trick here is timing. It's harmful to talk to investors early in YC when you have the leverage of demo day far ahead of you, but it's priority #1 closer to the end of batch. YC clearly guides founders through this process, if you listen and follow their advice. The founders I know who were repeatedly told the generic advice of building and talking to users had a bad product that wasn't improving quickly (including us for a while!). I don't know if that was the case here, but many founders spent more time thinking about investors and selling a story vs. building something for their users. It seems like YC understands this, and it was refreshing to see group partners dissuade trying to raise on hype and a story, and instead pushing founders to build something great for their users. There are certainly things that could be improved, but at the end of the day we raised with a 8x higher valuation post-YC vs. pre-YC and intentionally built strong relationships with other YC founders who shared our same problems and interests. While I'll hopefully work on my startup for years to come, I would apply to YC again in a heartbeat.
• Mikho 4y ago
  I recently did some napkin math of a YC startup cap table to see what ownership % is given up for what money after YC and what valuation should be targeted at the demo day to keep YC ownership at not more than 10% for $125K+375K with prerequisite that the demo day VC also gets 10%, triggers $125K+375K SAFEs, and requires an additional 10% to be set aside for the option pool: If we consider that YC's $125K investment is Pre-seed and the demo day YC's $375K + VC money investments are Seed: _____ PRE-SEED (Accepted to YC) YC 1 ($ 125K) ---- 0% (SAFE didn't convert yet) Founders ---------- 100% Total Investments: $ 125k Valuation: Isn't set yet (or $ 1 785 714 / Post money based on the non-converted yet safe) _____ SEED (Demo Day) YC 1 --------------- 5.6% ($ 125K SAFE converts) YC 2 ($ 375K) ---- 4.29% ($ 375K SAFE converts) VC ($ 700K) ------ 10% Option pool ------- 10% Founders ---------- 70.11% Total Investments: $ 1 200 000 Valuation: $ 7 000 000 / Post money _____ To sum it up, to keep around ~70% of the startup after YC, one needs to target ~$7M post money valuation at the demo day with $700K investment from a VC for another 10% and option pool of 10%. If a startup needs more VC money and doesn't want to lose a bigger share it's worth targeting at valuation higher than $7M and starting at least at $10M post money to get $1M investment. Please, correct me if I missed something. Calculations are done based on Safe Conversion Financing section in the The Y Combinator Deal [1]: Step 1: Price for the round is set and the two SAFEs are converted; Step 2: A stock option pool is created; Step 3: New money is invested in the company. It was a pleasant surprise to find out in the text that the priced round itself, and the creation or increase of the stock option pool, will dilute YC’s ownership. It means that 7% for the $125K SAFE at step 1 due to the dilution become 5.6% (considering that new VC gets 10% and the option pool is 10%). As also $375K percentage after step 1 is also decreased due to dilution. [1] https://www.ycombinator.com/deal/ https://www.ycombinator.com/deal/
• joanne123 4y ago
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• acecreamu 1y ago
  OP here, I feel the information in my article got outdated too quickly, so wanted to quickly revisit my statements with respect to the current experience (as of 2025): - I feel the in-person thing makes and breaks the YC magic, people who go through in-person cohorts feel much more connected to their batchmates and partners - The batches got significantly leaner = more attention to each individual company - Selling inside YC is a thing again (specifically for AI companies), since everyone around is doing AI and isn't lacking money YC companies basically buy from each other and get to 1M ARR together - The investment premium is there, with YC startups getting avg cap of 25M comparing to 15M for non-YC startups of similar stage (even with greater traction) - Bonus: the alumni events and off-site experiences became a nice addition, even for the previous cohorts Overall, I feel we experienced YC at its lowest, and it's not fair to use it as a reference point. There are still challenges with dilution (MFN) and the alumni experience (you basically lose most of the access), but they definitely listened to the feedback and have made positive changes that founders can already feel.
  • RfMnvpF9 1y ago
    O.o And why take it down? Did they not "coerce" you to do that? Some disclaimers is needed - could you tell us that they did not led you to take it down? earlier in the day I was in McD [market st sf] literally reading your blog post midway, refresh and the whole thing is gone darn! Did you got captured too? I thought my browser had a bug but No the post is gone! So much for transparency, YC.. simply getting from bad to worse. @OP you should have updated the blog post with a "2025 Update" textbox as per interwebs custom, instead of pulling the whole damn thing down. https://archive.is/cgKRF https://archive.is/cgKRF: > don't censure bad [..] YC are the ones who teach how important is negative feedback for improvement Seriously? What about: > pushing everyone through the same pipeline [....] everyone needs to follow their simple framework, not try to shine too much, not try to choose the right words, wash off all the makeup, put on a gray uniform > this feeling in the air that they want to cram everyone into their framework, and any attempts to go beyond the framework are quickly suppressed listen to your younger self. Is self censorship now the new normal? I seriously wonder how many of such dissenting posts have already been clean-scrubbed off the internet > internal forum called Bookface, but it serves more as an abstract omniscient brain looks like its real usefulness is to "cover their own reputational risks", to track dissenters and mob against them. Beware!