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I'm not sure if you don't know what you're talking about or if you're just exaggerating for the sake of argument. 1. Most YC founders are not college dropouts.

I'm not sure if you don't know what you're talking about or if you're just exaggerating for the sake of argument. 1. Most YC founders are not college dropouts. Quite a few are in every batch of YC, but nowhere near 20%. 2. YC isn't in SF. And most YC companies don't stay in SF during YC. Lots of companies stay in Mountain View, Palo Alto, Menlo Park, etc where you can rent out a 4-6 bedroom with your co-founder(s). Housing is even cheaper in other areas like Sunnyvale, Santa Clara, and San Jose, where you can potentially have a house to yourself. 3. If you expect to get paid for starting a startup, then obviously starting a startup is not for you. By definition there's nobody there to pay you except yourself. By definition you are exchanging equity for salary. 4. YC gives you $100k: $20k directly and $80k in convertible notes (well, SAFEs now) at the best possible terms (you'd never see elsewhere). The additional value of YC is that as long as you build a product with some users, you have an extremely high chance (not guaranteed) of raising 1M+ at a 5M+ valuation. Other companies that don't raise can go on to raise more convertible notes. In fact, going through YC is one way of guaranteeing that you don't end up being offered a sucker's deal.

cookiecaper 13y ago
1. OK, we can expand it to "recent college graduates". The point is, YC is predominantly young adult males, aged in their early 20s, unlikely to have major external responsibilities. 2. As someone who's not from SV, everything in that area gets lumped into "SF" for me. My apologies if this is considered obtuse. 3. Isn't this kind of part of the point of seeking investment? Aren't you saying, "I can't do this all on my own, I need some help with the finances, and will cut you in if you'll hook me up"? Somehow I don't see that as the same thing as "please pay me a pittance". As I stated in another reply, if the founder could live on a pittance, the chances are he'd save up a little bit at his cushy corporate job and enter conservation mode with that, rather than seeking external funding. 4. I haven't looked for a few years, but I was not aware that YC offered an additional $100k in financial instruments. This is somewhat better, but I'm not sure how those instruments work in this specific case so I can't make a complete evaluation. As far as follow-on investments go, these all have their own separate terms, yes? Unless YC is officially brokering all of these, how can being a YC company prevent you from getting suckered by YC copycats?
- argonaut 13y ago
  1. Yes, that much is true. Though I will claim that is partly a result of the applicant pool. My guess is that most applicants are young adult males. 3. If you're an exec earning $300k at big corp, you are not going to get $300k at a startup, because the startup obviously does not have the revenue or cash of big corp. Ditto for an engineer earning $150k at a tech company. But who said anything about a pittance? It's up to you to set your own salary. You can still pay yourself $100k/year, if that's necessary. The larger point of raising money is not just for paying yourself, but it's for hiring other people. 4. http://ycombinator.com/ycvc.html http://ycombinator.com/ycvc.html I made a correction to my post: the amount is now $80k, which is still good considering the assumption is that the money only holds you over until you raise money after Demo Day (say, 6 months). The link is a bit outdated because YC uses SAFEs now. But the notes had no discount and no cap, which are the best possible terms for notes, and that carries over to SAFEs. YC is brokering these. They have their own separate terms, but the terms are available publicly online and are the same for every YC company.
  - run4_too 13y ago
    I think you are missing cookiecapers main point by focusing on minutiae. YC targets the young male college student demographic, partly because that demographic shares the different components that you two are arguing about. This isn't really relevant though. If they were targeting suburban boomers that vote republican, it's silly to point out that some of their investments are actually women that voted democrat. cookiecaper's point is that the effect of targeting a particular founder profile means that there are a lot of other high potential founders that are under served by the "Aquire Funding, Kill Yourself, Profit!" model. I would tend to agree with that, particularly when you see that across the spectrum, most businesses are started by people that are 40+ and have over 10 years of experience in an industry. YC was started particularly because the "college dropout" demographic was under served. Now, at least when it comes to tech, they have become the norm and the "career switcher" has all but been ignored. I don't think YC needs to address this in any way, but as a tech community I think we're missing an opportunity by not tapping in to what has traditionally been the strongest segment of new entrepreneurs.
sdesol 13y ago
To be honest, I use to think YC would be a poor route to go, but having just dipped my feet into the marketing water, I would have to say it may be your best bet. Advertising and networking is a beast onto its own and there really is no bigger juggernaut for startup momentum than YC. Like my professor use to say, owning 100% of nothing is nothing.

cookiecaper 13y ago

1. OK, we can expand it to "recent college graduates". The point is, YC is predominantly young adult males, aged in their early 20s, unlikely to have major external responsibilities. 2. As someone who's not from SV, everything in that area gets lumped into "SF" for me. My apologies if this is considered obtuse. 3. Isn't this kind of part of the point of seeking investment? Aren't you saying, "I can't do this all on my own, I need some help with the finances, and will cut you in if you'll hook me up"? Somehow I don't see that as the same thing as "please pay me a pittance". As I stated in another reply, if the founder could live on a pittance, the chances are he'd save up a little bit at his cushy corporate job and enter conservation mode with that, rather than seeking external funding. 4. I haven't looked for a few years, but I was not aware that YC offered an additional $100k in financial instruments. This is somewhat better, but I'm not sure how those instruments work in this specific case so I can't make a complete evaluation. As far as follow-on investments go, these all have their own separate terms, yes? Unless YC is officially brokering all of these, how can being a YC company prevent you from getting suckered by YC copycats?

argonaut 13y ago
1. Yes, that much is true. Though I will claim that is partly a result of the applicant pool. My guess is that most applicants are young adult males. 3. If you're an exec earning $300k at big corp, you are not going to get $300k at a startup, because the startup obviously does not have the revenue or cash of big corp. Ditto for an engineer earning $150k at a tech company. But who said anything about a pittance? It's up to you to set your own salary. You can still pay yourself $100k/year, if that's necessary. The larger point of raising money is not just for paying yourself, but it's for hiring other people. 4. http://ycombinator.com/ycvc.html http://ycombinator.com/ycvc.html I made a correction to my post: the amount is now $80k, which is still good considering the assumption is that the money only holds you over until you raise money after Demo Day (say, 6 months). The link is a bit outdated because YC uses SAFEs now. But the notes had no discount and no cap, which are the best possible terms for notes, and that carries over to SAFEs. YC is brokering these. They have their own separate terms, but the terms are available publicly online and are the same for every YC company.
- run4_too 13y ago
  I think you are missing cookiecapers main point by focusing on minutiae. YC targets the young male college student demographic, partly because that demographic shares the different components that you two are arguing about. This isn't really relevant though. If they were targeting suburban boomers that vote republican, it's silly to point out that some of their investments are actually women that voted democrat. cookiecaper's point is that the effect of targeting a particular founder profile means that there are a lot of other high potential founders that are under served by the "Aquire Funding, Kill Yourself, Profit!" model. I would tend to agree with that, particularly when you see that across the spectrum, most businesses are started by people that are 40+ and have over 10 years of experience in an industry. YC was started particularly because the "college dropout" demographic was under served. Now, at least when it comes to tech, they have become the norm and the "career switcher" has all but been ignored. I don't think YC needs to address this in any way, but as a tech community I think we're missing an opportunity by not tapping in to what has traditionally been the strongest segment of new entrepreneurs.

sdesol 13y ago

To be honest, I use to think YC would be a poor route to go, but having just dipped my feet into the marketing water, I would have to say it may be your best bet. Advertising and networking is a beast onto its own and there really is no bigger juggernaut for startup momentum than YC. Like my professor use to say, owning 100% of nothing is nothing.