4 ms·

Y Combinator: Party Like it's 2009

222 points by pg 18y ago

dbul 18y ago
Smart. This is a good move. The chances of companies going public is greater because you'll have more companies and the economy will be better at the same time so it makes more sense to go public (for some startups) because the market will be rebounding and stabilizing. This is good for YC, good for Sequoia, and good for startups.
- jonknee 18y ago
  How will YC funding 20 more startups per year encourage more startups to go public?
  - dbul 18y ago
    Fixed
  - pg 18y ago
    It may, actually. Partly simply because the larger the pool of startups, the more candidates there are for IPOs. But there are two reasons startups started now may be disproportionately likely to: 1. Because M&A has decreased so much. The great startups are less likely to be siphoned off by early acquisitions. 2. Because people willing to start startups now are going to be extra-determined. We've always wished we could put a question on the application form asking "Do you really want to do this?" It would be a waste of time, because everyone would just say yes. But now the economy is supplying that question for us.
Timothee 18y ago
It's good to see YCombinator applying what they're saying and expanding right now. It's definitely true that if you have the money, a recession is probably the best time to invest since it puts you ahead of more people/companies. Also, I was really hoping for a real party. Paul, are you reading this? Maybe just a drink at the Cheesecake Factory in Palo Alto? No? Oh well... good luck with the expansion!
- abossy 18y ago
  This makes me really happy. It's a great example of showing how a recession can re-establish an innovative drive. With both large and small companies cutting back, this is a great time to start your own company. I've been thinking and writing a lot about how innovation in Silicon Valley feels like it's floundering. Hopefully, this encourages people to start building cool things if they aren't already.
boredguy8 18y ago
Congratulations. Cash is king.
numair 18y ago
In order to make sense of this from a financial perspective, I'd have to know more about the performance of YC's existing fund(s). Is that published anywhere? The size of this deal is much smaller than the average Series A funding round of a Sequoia startup, so this is quite a strange arrangement. This really appears to be a validation of the importance and cachet of Sequoia by YC, rather than the reverse. A very surprising move, which further leads me to question existing YC performance.
- charlesju 18y ago
  $15k for 6% is proportionally much higher.
  - numair 18y ago
    Yes, but if it's working, why let Sequoia in the deal? YC has an existing brand and deal pipeline... This just doesn't make sense to me. You're also inevitably leaving other potential follow-on investors, such as Founders Fund, at a disadvantage... This really seems like more of a win for Sequoia (access to deal pipeline, continue to expose itself as the preferred VC of Internet startups, etc) than for YC (get $2m and funnel startups to Sequoia for follow-on financing). I know Paul's a smart guy, so there must be a missing piece somewhere.
    - shimon 18y ago
      How about this: 1. The YC founder-investors probably lost 30% or so of their wealth in the recent stock market decline (maybe they did better, maybe they did worse, but they probably feel poorer). 2. At the same time, YC has continued to improve their deal flow and develop connections in Silicon Valley, so they are turning down better applications than they used to. 3. Other VC firms are continuing to notice YC and compete. If YC can remain the top seed firm because of its founders' fame and network, YC will be poised to dominate seed investment for many years, as lower-tier seed firms spur demand but have their most promising prospects sniped by a YC now able to fund and advise a larger pool of companies. Just like top-tier VCs like Sequoia get access to better companies while lower-tier VCs lose money. Whether it's a good idea really depends on the average quality of the deals YC has been turning down. If YC rejects are increasingly good, expanding the funding pool and accepting more startups makes sense.
vaksel 18y ago
Small error: Partly. It's easier to expand in in Silicon Valley,
- pg 18y ago
  Thanks, fixed.
markessien 18y ago
You should have gone with Summer of 2009 as your headline.
jwilliams 18y ago
Given the extended deadline - Is there a possibility/chance that the invites + interviews will be pushed out?
- pg 18y ago
  The application deadline and the day we respond have been pushed back (they're now March 25 and April 6) but interviews still take place on the same weekend, April 17-19.
  - ewjordan 18y ago
    Just a heads up, the http://news.ycombinator.com/apply http://news.ycombinator.com/apply page still lists the old deadline, you may want to update that as well.
donaldc 18y ago
Brilliant! I think everyone involved benefits: * More startups get to receive YC aid and funding, and these startups are more likely to have (as a group) advice from/access to a top-tier VC firm. * YC gets to fund more companies, while spreading the additional risk and reward around. This also means they get to expand the YC alumni network at a faster rate. * Sequoia gets to invest, via YC, in web companies that may not need big enough rounds of funding for it to directly be worth Sequoia's time. And they arguably get a slight edge in investing in those YC startups that do wind up wanting more money later. (I am not at all saying they have an official edge, but if they are somewhat familiar with a company from the YC stage, they'll have a slight natural edge. That's how familiarity works.) * Silicon Valley wins, because that's where this is all happening. I wonder who first broached the idea: YC or Sequoia?
- skmurphy 18y ago
  "I wonder who broached the idea..." I suggested it in http://news.ycombinator.com/item?id=481791 http://news.ycombinator.com/item?id=481791 "Why not raise a side fund and do full fledged seed investing if you can pick winners?"
YuriNiyazov 18y ago
In one of your earlier essays, you called "incorporating and raising money an O(1) pain in the ass" - would you say the complexity remained the same this time around?
- pg 18y ago
  This was easier than raising money for Viaweb in the sense that I didn't have to try that hard to convince people, but harder in the sense that the paperwork is more complicated.
  - tokenadult 18y ago
    Gaining outside investors means that you have established credibility as someone who can identify early-stage start-ups with a bright future. Congratulations.
listic 18y ago
Is it still possible for foreigners to apply for this cycle right now? I.e. can one get appropriate visa to get to US before April 16?
- alanthonyc 18y ago
  depending on which country you're coming from and your personal financial resources (i.e. bank account), it could be easy for you to get a quick tourist visa or almost impossible
deyan 18y ago
congratulations!
ROFISH 18y ago
I know Y Combinator is about starting up companies, but what about existing ones? We're less than six months old and would love the experience, however we are "ramen-profitable" with a bootstrapped investor structure. I think we're too far ahead for YC.
- zhyder 18y ago
  As long as you believe giving up 2-10% of your company to YC will improve your outcome by at least as much, you should apply.
Rayzar 18y ago
This is great news for all aspiring founders out there, at least some of now have a bit more time time to prepare our applications and hopefully our chances will be better due to the higher number of startups that will be funded.
deleted 18y ago
[deleted]
- deleted 18y ago
  [deleted]
ryanb 18y ago
such a sucka!!!
jey 18y ago
Awesome h4x0ring, but it would've been better if you had done it without damaging the existing link. You should write up an explanation of how you pulled it off. EDIT: Its source code is at http://source.notabank.appjet.com http://source.notabank.appjet.com . Apparently news.yc is generating edit-profile closures even when viewing a profile other than your own.
paraschopra 18y ago
Whoa! This really works. Who made it?
- staunch 18y ago
  I figured it was pg trying to prove a point, but now I'm not entirely certain...
  - hrabago 18y ago
    Think maybe someone confused hacker for cracker. Edit: I believe this story used to link to http://ycombinator.com/party.html http://ycombinator.com/party.html .
    - thaumaturgy 18y ago
      "hackers" and "crackers" are not mutually exclusive terms. A safe cracker for example has to have a lot of knowledge of locks and safes. I think some of HN's superiority complex is contributing to the negative attention it's getting right now. Maybe it would've been better to just admit that some things aren't being designed here as well as they should be, considering the focus and audience?
  - chris11 18y ago
    Yeah, I've been noticing the link name changing a couple times in the past few minutes, so it's obviously being worked on.
    - paraschopra 18y ago
      Maybe this should be stopped ASAP. Links like these seem to be replicating all across HN
- ngrandy 18y ago
  for those who missed it, this comment refers to the hacking of this story. hacker news was briefly hacked, and this story was altered to link to a website (hosted at appjet) that let users edit the text of pg's profile. it was fixed within a half hour or so.
yters 18y ago
I'm not sure if YC does this already, but here's a thought: I'm sure many of the applications form clusters around common ideas. What would be optimal is if YC could select the best parts of all the common ideas and the best hackers to implement the ideas, instead of just one combination of the two. This way more applicants are part of the actual YC sponsored projects and the projects are more successful.
webwright 18y ago
Is the YC program going to change in any way? I've often wondered just how far you guys can scale. I think we got a LOT of advantages coming into one of the later sessions (bigger peer group, more credibility, bigger demo day), but I envy the early YC classes a bit. I imagine back in the day, YC could REALLY dig in and help on the product side. So, with going up to 30 funded startups per session, does YC itself increase headcount?

222 points by pg 18y ago

dbul 18y ago

Smart. This is a good move. The chances of companies going public is greater because you'll have more companies and the economy will be better at the same time so it makes more sense to go public (for some startups) because the market will be rebounding and stabilizing. This is good for YC, good for Sequoia, and good for startups.

jonknee 18y ago
How will YC funding 20 more startups per year encourage more startups to go public?
- dbul 18y ago
  Fixed
- pg 18y ago
  It may, actually. Partly simply because the larger the pool of startups, the more candidates there are for IPOs. But there are two reasons startups started now may be disproportionately likely to: 1. Because M&A has decreased so much. The great startups are less likely to be siphoned off by early acquisitions. 2. Because people willing to start startups now are going to be extra-determined. We've always wished we could put a question on the application form asking "Do you really want to do this?" It would be a waste of time, because everyone would just say yes. But now the economy is supplying that question for us.

Timothee 18y ago

It's good to see YCombinator applying what they're saying and expanding right now. It's definitely true that if you have the money, a recession is probably the best time to invest since it puts you ahead of more people/companies. Also, I was really hoping for a real party. Paul, are you reading this? Maybe just a drink at the Cheesecake Factory in Palo Alto? No? Oh well... good luck with the expansion!

abossy 18y ago
This makes me really happy. It's a great example of showing how a recession can re-establish an innovative drive. With both large and small companies cutting back, this is a great time to start your own company. I've been thinking and writing a lot about how innovation in Silicon Valley feels like it's floundering. Hopefully, this encourages people to start building cool things if they aren't already.

boredguy8 18y ago

Congratulations. Cash is king.

numair 18y ago

In order to make sense of this from a financial perspective, I'd have to know more about the performance of YC's existing fund(s). Is that published anywhere? The size of this deal is much smaller than the average Series A funding round of a Sequoia startup, so this is quite a strange arrangement. This really appears to be a validation of the importance and cachet of Sequoia by YC, rather than the reverse. A very surprising move, which further leads me to question existing YC performance.

charlesju 18y ago
$15k for 6% is proportionally much higher.
- numair 18y ago
  Yes, but if it's working, why let Sequoia in the deal? YC has an existing brand and deal pipeline... This just doesn't make sense to me. You're also inevitably leaving other potential follow-on investors, such as Founders Fund, at a disadvantage... This really seems like more of a win for Sequoia (access to deal pipeline, continue to expose itself as the preferred VC of Internet startups, etc) than for YC (get $2m and funnel startups to Sequoia for follow-on financing). I know Paul's a smart guy, so there must be a missing piece somewhere.
  - shimon 18y ago
    How about this: 1. The YC founder-investors probably lost 30% or so of their wealth in the recent stock market decline (maybe they did better, maybe they did worse, but they probably feel poorer). 2. At the same time, YC has continued to improve their deal flow and develop connections in Silicon Valley, so they are turning down better applications than they used to. 3. Other VC firms are continuing to notice YC and compete. If YC can remain the top seed firm because of its founders' fame and network, YC will be poised to dominate seed investment for many years, as lower-tier seed firms spur demand but have their most promising prospects sniped by a YC now able to fund and advise a larger pool of companies. Just like top-tier VCs like Sequoia get access to better companies while lower-tier VCs lose money. Whether it's a good idea really depends on the average quality of the deals YC has been turning down. If YC rejects are increasingly good, expanding the funding pool and accepting more startups makes sense.

vaksel 18y ago

Small error: Partly. It's easier to expand in in Silicon Valley,

pg 18y ago
Thanks, fixed.

markessien 18y ago

You should have gone with Summer of 2009 as your headline.

jwilliams 18y ago

Given the extended deadline - Is there a possibility/chance that the invites + interviews will be pushed out?

pg 18y ago
The application deadline and the day we respond have been pushed back (they're now March 25 and April 6) but interviews still take place on the same weekend, April 17-19.
- ewjordan 18y ago
  Just a heads up, the http://news.ycombinator.com/apply http://news.ycombinator.com/apply page still lists the old deadline, you may want to update that as well.

donaldc 18y ago

Brilliant! I think everyone involved benefits: * More startups get to receive YC aid and funding, and these startups are more likely to have (as a group) advice from/access to a top-tier VC firm. * YC gets to fund more companies, while spreading the additional risk and reward around. This also means they get to expand the YC alumni network at a faster rate. * Sequoia gets to invest, via YC, in web companies that may not need big enough rounds of funding for it to directly be worth Sequoia's time. And they arguably get a slight edge in investing in those YC startups that do wind up wanting more money later. (I am not at all saying they have an official edge, but if they are somewhat familiar with a company from the YC stage, they'll have a slight natural edge. That's how familiarity works.) * Silicon Valley wins, because that's where this is all happening. I wonder who first broached the idea: YC or Sequoia?

skmurphy 18y ago
"I wonder who broached the idea..." I suggested it in http://news.ycombinator.com/item?id=481791 http://news.ycombinator.com/item?id=481791 "Why not raise a side fund and do full fledged seed investing if you can pick winners?"

YuriNiyazov 18y ago

In one of your earlier essays, you called "incorporating and raising money an O(1) pain in the ass" - would you say the complexity remained the same this time around?

pg 18y ago
This was easier than raising money for Viaweb in the sense that I didn't have to try that hard to convince people, but harder in the sense that the paperwork is more complicated.
- tokenadult 18y ago
  Gaining outside investors means that you have established credibility as someone who can identify early-stage start-ups with a bright future. Congratulations.

listic 18y ago

Is it still possible for foreigners to apply for this cycle right now? I.e. can one get appropriate visa to get to US before April 16?

alanthonyc 18y ago
depending on which country you're coming from and your personal financial resources (i.e. bank account), it could be easy for you to get a quick tourist visa or almost impossible

deyan 18y ago

congratulations!

ROFISH 18y ago

I know Y Combinator is about starting up companies, but what about existing ones? We're less than six months old and would love the experience, however we are "ramen-profitable" with a bootstrapped investor structure. I think we're too far ahead for YC.

zhyder 18y ago
As long as you believe giving up 2-10% of your company to YC will improve your outcome by at least as much, you should apply.

Rayzar 18y ago

This is great news for all aspiring founders out there, at least some of now have a bit more time time to prepare our applications and hopefully our chances will be better due to the higher number of startups that will be funded.

deleted 18y ago

[deleted]

deleted 18y ago
[deleted]

ryanb 18y ago

such a sucka!!!

jey 18y ago

Awesome h4x0ring, but it would've been better if you had done it without damaging the existing link. You should write up an explanation of how you pulled it off. EDIT: Its source code is at http://source.notabank.appjet.com http://source.notabank.appjet.com . Apparently news.yc is generating edit-profile closures even when viewing a profile other than your own.

paraschopra 18y ago

Whoa! This really works. Who made it?

staunch 18y ago
I figured it was pg trying to prove a point, but now I'm not entirely certain...
- hrabago 18y ago
  Think maybe someone confused hacker for cracker. Edit: I believe this story used to link to http://ycombinator.com/party.html http://ycombinator.com/party.html .
  - thaumaturgy 18y ago
    "hackers" and "crackers" are not mutually exclusive terms. A safe cracker for example has to have a lot of knowledge of locks and safes. I think some of HN's superiority complex is contributing to the negative attention it's getting right now. Maybe it would've been better to just admit that some things aren't being designed here as well as they should be, considering the focus and audience?
- chris11 18y ago
  Yeah, I've been noticing the link name changing a couple times in the past few minutes, so it's obviously being worked on.
  - paraschopra 18y ago
    Maybe this should be stopped ASAP. Links like these seem to be replicating all across HN
ngrandy 18y ago
for those who missed it, this comment refers to the hacking of this story. hacker news was briefly hacked, and this story was altered to link to a website (hosted at appjet) that let users edit the text of pg's profile. it was fixed within a half hour or so.

yters 18y ago

I'm not sure if YC does this already, but here's a thought: I'm sure many of the applications form clusters around common ideas. What would be optimal is if YC could select the best parts of all the common ideas and the best hackers to implement the ideas, instead of just one combination of the two. This way more applicants are part of the actual YC sponsored projects and the projects are more successful.

webwright 18y ago

Is the YC program going to change in any way? I've often wondered just how far you guys can scale. I think we got a LOT of advantages coming into one of the later sessions (bigger peer group, more credibility, bigger demo day), but I envy the early YC classes a bit. I imagine back in the day, YC could REALLY dig in and help on the product side. So, with going up to 30 funded startups per session, does YC itself increase headcount?