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YC is a hack around the old-boy you-have-to-know-someone network. It's ingenious. YC implements a better filtering algorithm than the dumb who-you-know filter a
by ericb 12y ago
YC is a hack around the old-boy you-have-to-know-someone network. It's ingenious. YC implements a better filtering algorithm than the dumb who-you-know filter and sells the companies to VC's at a premium.
It's amazing most of the VC's have not worked out a better filtering algorithm themselves.
- rdlecler1 12y agoI'm hazard a guess that YC uses back-channels as well. Firms like SVAngels and a16z get 10-30 deals per day with referrals so they can focus all their attention on making type II errors.
- adwf 12y agoYeah I've been reading a lot of the "How we applied to YC" articles recently and it does seem that even YC use a lot of referrals. Quite a few were along the lines of: Apply to YC, email a friend who knows a partner and see if you can get a referral. It may only get you to the interview stage, but when you have the mass of 1000's of applicants, it's more than most people get.
- 7Figures2Commas 12y ago> It's amazing most of the VC's have not worked out a better filtering algorithm themselves. Why should they? Venture capital is a compensation structure disguised as an asset class. GPs lock in 10+ years of 2% annual fees on the capital their LPs commit to their funds. A few years into an initial fund, they can raise another, larger fund, locking in 10+ years of 2% annual fees on the capital committed to that fund. There's virtually no incentive to do anything innovative or stray too far from the herd.