The author of this article made a mistake in proposing the "more money cheaper" investors as an alternative to YC. In reality, YC and those investors target tot

The author of this article made a mistake in proposing the "more money cheaper" investors as an alternative to YC. In reality, YC and those investors target totally different segments of the market. If you have a good idea, you are confident in your ability to executing on it, and you just need money, then of course it is dumb to choose YC over other kinds of seed investment. As the author stated, it is relatively easy to get more money for less equity somewhere else. YC is easy money. You type up one short application and you give one short presentation and you are either in or out. If you lose all the money they give you nobody cares. Raising money other ways is not nearly so easy; if it is easy then you probably got it from people whose money you will feel very guilty for losing. From afar, YC seems to be a very college-like experience. PG is like the professor. The other founders are like your classmates. Your acceptance into YC is akin to that letter you received in the mail your senior year that made your mom cry because she was so proud--instant validation. When you get into YC you feel like you've succeeded regardless of whether or not your business fails. Once you are in, the environment is so confortable because it is just like the environment you've been in your whole life: people hovering above you, waiting to collect your homework every week. Other people who might be willing to fund a business are not going to offer such a friendly, comfortable environment. You actually have to read everything they want you to sign; you probably should have a lawyer look over everything before you even sign the initial agreement. You're going to hear "where's my money" in your head every time you talk to them. They are unlikely to appreciate the vital importance of a weekly dinner party.