Is Y Combinator worth the money? Brutally honest review of W22 batch experience

Did YC S21 which was an all remote batch. my 2c.<p>YC is 100% what you make of it. It&#x27;s not a lean back experience.<p>I did not meet most of the companies in my batch but I&#x27;ve gotten to know many founders through YC that I would not have otherwise. Founders that have been source of advice and support.<p>Network of clients - yep don&#x27;t go into YC expecting to sell to other YC cos. It <i>is</i> easier to get warm intros through the network though.<p>YC advice, office hours specifically - it&#x27;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&#x27;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.<p>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&#x27;re not sure about etc. The bump in valuation is real too.<p>I&#x27;d do YC again in a heartbeat.

It&#x27;s true that YC will tell you over and over to (1) work on your product and (2) talk to users. Those are the &quot;make&quot; and &quot;people&quot; in &quot;make something people want&quot;.<p>If you want to focus on marketing tricks &#x2F; media hype &#x2F; &quot;content&quot; &#x2F; that kind of thing, you&#x27;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&#x27;s a little reassuring to hear that this is what (some) people are complaining about. If you&#x27;re a YC startup and want to launch on HN (<a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;launches" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;launches</a>) you&#x27;re going to hear even more of it from me.<p>I like this part: &quot;<i>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</i>.&quot; On the HN side we also push for &quot;just the facts&quot; and urge founders to cut hype and marketing speak. That&#x27;s as much about the HN audience as core values, but it&#x27;s nice (and for me a relief) that those overlap.<p>If building a valuable product, talking to users, and focusing on facts sounds good to you, you should consider applying to YC.<p>(feel free to discount this to zero based on my bias but I wanted to say it anyway!)

<i>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><p>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.<p>Back then there were about 10x fewer SaaS startups (maybe that&#x27;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.<p>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&#x27;s game over.<p>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&#x27;s just not the reality for 99% of today&#x27;s startups, even YC ones.

S22, solo founder, open-source infra + internal tools (windmill.dev).<p>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.<p>I was under the impression that surely a successful startup wouldn&#x27;t have to go to any struggle and that founders were a special - genius-like - kind of breed. Being in YC opened my eyes:<p>- everyone struggle, relax and keep working<p>- the great people of this world are smart, but not crazy smart. They are crazy pragmatic, and crazy motivated, which you can be TOO<p>- 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&#x27;re going through.<p>YC was a transformational experience for me and I would recommend it to all.<p>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.

I wonder how much of this is a function of the W22 batch being remote.<p>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.<p>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&#x27;re not going to get to know everyone, and I found myself gravitating toward a smaller group of people who I connected with personally.<p>I&#x27;m not going to lie, YC was stressful. You&#x27;re dropped in amongst bunch of smart and accomplished people who are sprinting as fast as possible toward the all-consuming Demo Day. It&#x27;s a bit of a pressure cooker, but that&#x27;s not unintentional. Those shared experiences formed the substrate of some amazing, life-long friendships.<p>I have 15+ close friends who went through S14. We talk every day. We&#x27;ve been in each other&#x27;s weddings. We&#x27;ve watched each other have kids, shut down companies, start new ones, get acquired for enormous amounts of money, and everything in between. It&#x27;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.<p>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.<p>My life&#x27;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.

This stood out to me:<p>&gt; 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.<p>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.<p>This seems, on the whole, like kind of reasonable high level operating parameters for startups, since traction is what defines revenue and fundraising chances.<p>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&#x2F;or it can encourage founders to specifically tackle things they can ship quickly rather than things that are maybe more compelling.<p>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.

I did YC also remote, though a bit earlier than the article&#x27;s author. The part that stood out to me was<p>&gt; 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.<p>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&#x2F;therapist and pushing back against founder pschology&#x2F;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.

I did YC in W21 in NYC. I was not allowed to meet people in large groups until April (after the batch).<p>I disagree with each and every one of these ratings and conclusions.<p>Firstly, the comparison should be &quot;Is the alternative to YC worth it?&quot; For many companies, the alternative is raising nothing and bootstrapping, or raising at significantly lower valuations.<p>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.<p>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.

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.<p>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&#x27;). Fundraising has always been a struggle and giant distraction for them.<p>The doors YC opened for us let us focus on building and have had an outsized impact on our trajectory. Re the 7%: I&#x27;d much rather have 93% of a giant pie over 100% of a small one.<p>Edit: I should caveat that YC and VC in general are built around finding &amp; amplifying outliers. If you don&#x27;t think you are an outlier founder and aren&#x27;t trying to build an outlier company, our experience probably isn&#x27;t relevant.

Wow. In the footnote they mention they shut down right after demo day? Perhaps I&#x27;m old school but I always had a huge feeling of indebtedness to my investors.<p>So here they lose all the money within 3 months and write a scathing review to boot?<p>Is it not a two way street?

Interesting quote:<p><pre><code> 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&#x27;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. </code></pre> Just for ref, I did SUS and applied to YC three times unsuccessfully.

I have minimal contact with YC these days, and have no particular motivation to artificially inflate the value of the program.<p>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).<p>I can&#x27;t think of a situation where I would recommend a company not accept a spot in YC.

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).<p>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.<p>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&#x27;m not sure whether a product I&#x27;ve just finished building makes sense for YC and whether I should gamble on attempt #3.<p>I think it would help both YC and founders if they take some steps to make this clear(er) for potential applicants.<p>[1] &gt; 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.<p>[2] &gt; [...] 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&#x27;t sound good in the early days.

YC has both transformed by company and saved my role as a founder. I&#x27;ll be completely transparent and say I disagree with a lot of the sentiment. I&#x27;ll do my best to briefly explain why.<p>From talking to many YC alumn, I&#x27;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.<p>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&#x27;t listen if they just say it once or twice, and it&#x27;s also REALLY important.<p>&gt; 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.<p>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.<p>Yeah YC makes fundraising orders of magnitude easier. Yeah in person definitely makes it way better. I&#x27;ve no regrets, would do YC again every time.<p>I&#x27;ve also heard similar sentiment from investors! &quot;7% it too much for $125k&quot;, etc. But it&#x27;s the prestige of the brand, and the super powerful network. I&#x27;m not part of any other pre-defined networks so I don&#x27;t really know how to compare, but YC is POWERFUL. Nobody I&#x27;ve talked with that had those opinions had alternatives to getting that network or valuation that quickly, unless your already a startup star.<p>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&#x27;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.<p>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.

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&#x2F;NY) like the author, you will have even more trouble like ungodly meeting hours or very few fellows in the same timezone.<p>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.

Heard similar opinions from other YC founders before.<p>I think any educational system will run into similar issues.<p>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.<p>At the end the individuals don’t matter as long as the aggregate produces good enough results.

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&#x2F;if I am working on a new product company.<p>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.<p>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.<p>It&#x27;s unfortunate the author had an experience that wasn&#x27;t ideal, but I&#x27;d be wary of saying this is representative.

We did W21, and whilst the point that &#x27;remote &lt; in-person&#x27; has some validity, I fundamentally disagree on the points about YC&#x27;s network, partners and community.<p>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.<p>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&#x27;ve seen companies attribute pivotal decisions to YC advice, particularly during funding rounds.<p>I&#x27;d liken it a college experience - you won&#x27;t be spoon-fed like you were in preschool. You must be self-directed to be successful, and there&#x27;s always someone smarter and more successful than you to learn from.

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.<p>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.

&gt; 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.<p>Wait, the additional $375k is an uncapped SAFE. How could a company “easily raise at better terms”?

I always thought the primary benefit of YC was the brand. It&#x27;s like an Ivy League school for startups. The article suggested it didn&#x27;t help much. Perhaps going too big has diluted the YC brand?

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.<p>I may have a low opinion of venture capitalists but at the end of the day they&#x27;re not complete idiots. They&#x27;re operating with a known framework, they&#x27;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&#x27;s your entire presentation to investors they&#x27;re going to tell _other_ investors not to waste their time talking to you.<p>The reason you&#x27;re getting advice to minimize hype and showmanship and maximize hard numbers is because when you get into those investor meetings they&#x27;re going to cut off hype and showmanship and ask you to just tell them the numbers. This isn&#x27;t some &quot;make life easier for YC and make every startup fit into a box&quot; thing, it&#x27;s just how investor pitches work.

YC doesn&#x27;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.<p>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&#x27;s no wonder there are aspects that are less than ideal.

Happy to honestly answer any brutal questions you have!

I&#x27;m surprised they haven&#x27;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&#x27;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.<p>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.<p>They have access to metrics I don&#x27;t have though (obviously) so who knows I may be totally off base.

There is nothing wrong with being the category-defining early-stage investment company, and doing it as a for-profit business that&#x27;s optimized for good financial outcomes.<p>I think what some of the insiders (like the OP) and semi-adjacent outsiders (like me) might be feeling a <i>little</i> 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&#x27;t apply like me) that was really inspiring. And to at least some degree, YC is now a high-status network that signals well.<p>There&#x27;s nothing uniquely bad about it, it&#x27;s kind of the default throughout human history, and they are completely transparent about being a for-profit company, but it&#x27;s also ok to be a little sad that it&#x27;s not quite as idealistic as it used to be.

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<p>This is even better now that YC is back in person. I think W22 batch was the last remote batch

I was also in the W22 batch. While I don&#x27;t know Oleksii (to his point!), I&#x27;m left thinking that he might not have understood and acted on YC&#x27;s advice.<p>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&#x27;s harmful to talk to investors early in YC when you have the leverage of demo day far ahead of you, but it&#x27;s priority #1 closer to the end of batch. YC clearly guides founders through this process, if you listen and follow their advice.<p>The founders I know who were repeatedly told the generic advice of building and talking to users had a bad product that wasn&#x27;t improving quickly (including us for a while!). I don&#x27;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.<p>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&#x27;ll hopefully work on my startup for years to come, I would apply to YC again in a heartbeat.

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&#x27;t have access to. Plus, the YC community was friendly to me when I had a lot of questions.<p>We had a terrible experience fundraising simply because I didn&#x27;t understand how to do it properly. There were a lot of stuff in between the lines that I wasn&#x27;t aware of. Also what I wished I would&#x27;ve done more of was spend time with fellow founders. It being remote, I felt I was missing the &quot;energy&quot; of being in the same spot as everyone else.<p>Overall, I&#x27;m glad that I went through YC and even though my startup didn&#x27;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.

At the very bottom, in a post-script:<p>&gt; 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.<p>What happens in this scenario? YC gave them $500K in exchange for 7% of the business, and then they immediately shuttered the business?<p>Did they get to keep the $500K?

&gt; 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<p>Wait what? a ~$7m valuation, _pre product_, is considered meager these days?

I didn&#x27;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.<p>Their advice is not worth it because advice is free on YouTube. Let&#x27;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&#x27;t any different from the many YouTubers giving advice. Unless you get personal time with YC staff, their services are not unique.<p>Do you need to be Peter Mckinnon’s apprentice to learn photography? No, likewise you don’t need YC.

&quot;You, the founders, should only build a product and talk to customers; everything else is superfluous and a waste of time.&quot;<p>I found it interesting that this seems to be described as bad advice that boxes founders in.<p>&quot;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.&quot;<p>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?

I am an outsider who observed YC companies and their founders for a while.<p>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 &quot;I am not going to spoonfeed you everything, figure that sh*t on your own&quot;.<p>YC will give you the initial boost and you make up what you want to make up for it. Making it to YC doesn&#x27;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.<p>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&#x27;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.<p>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.<p>I honestly don&#x27;t think the startup aspect has much to do with. It doesn&#x27;t have to be one person, they want this very particular personality trait shared among the co-founders.<p>This is not a criticism at all. But I think YC doesn&#x27;t want companies they want people. Some people are just not that.

Prior to covid I was paying for a business coach&#x2F;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.<p>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.<p>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.

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.<p>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.

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.

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.<p>The two big ones: YC companies try to &quot;grow&quot; too fast without any concern to the dynamics of how their market is supposed to work after they&#x27;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&#x2F;products offered.<p>There&#x27;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.

Most surprising quote to me was this: <i>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</i> since this is a big part of other accelerators&#x27; pitch. Obviously YC can&#x27;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&#x27;d assume YC&#x27;s network was big enough to add value (beyond a list of companies to send cold emails to indiscriminately)

&gt;<i>I’ve seen enough cases when saying “oh, I’m also from YC” didn’t move the needle.</i><p>When you&#x27;re one of a thousand companies every year, why would it? Are YC particularly discerning, or are they optimizing getting as many through the &quot;system&quot; as possible?

I’m commenting a bit late but still want to share some thoughts for some readers hopefully.<p>Life is weird. Business is weird. Relationships are weird. Opportunities are weird. School is weird. Etc.<p>Some things, identical as can be, can work for people while doing nothing for others. Everything impacts at different rates.<p>The one constant is you get out of it what you put into it.<p>The Y program is by design not going to churn 100% results for everyone for — both the investors and the startups.<p>You get a shot and you take it and move on. Best of luck to you all.

Oh my, $150K for 7% equity sounds really good. I would offer 30% equity for that amount.<p>I&#x27;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.<p>Still nobody will invest in me.

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.<p>to some they&#x27;re like &quot;meh&quot;, but to me those subtle things really make or break your company.<p>it&#x27;s like yc has solid focus on your company&#x27;s fundamentals and reminding you of it again and again so you dont get distracted.

I am raising for playwhitelabel dot com with following stats - revenue US$16K+ (since May, 2022), paid users 120+ (including presales), and don&#x27;t have a product yet.<p>As a 2-person team, looking forward to growing with a product, and a bit of capital, YC will suite us. But it&#x27;s highly unlikely we will even get an interview. I wonder why all those later stage YC companies are being taught SuS content.

Doesn&#x27;t this miss the point.<p>If you need 150k to start your company it is difficult to find other options.<p>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

Is it worth the money? I think what YC gets you, you can&#x27;t find elsewhere for less money.<p>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.

Thought experiment: if you had a successfull bootstrapped company that didnt need external financing.. how much would it cost to get Y combinator advice?<p>Basically how much should you pay to get their package?<p>They have 200 companies with 125k investment? So 25 per year?<p>Would they offer their &quot;service&quot; for 100k usd?

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:<p>If we consider that YC&#x27;s $125K investment is Pre-seed and the demo day YC&#x27;s $375K + VC money investments are Seed:<p>_____<p>PRE-SEED (Accepted to YC)<p>YC 1 ($ 125K) ---- 0% (SAFE didn&#x27;t convert yet)<p>Founders ---------- 100%<p>Total Investments: $ 125k<p>Valuation: Isn&#x27;t set yet (or $ 1 785 714 &#x2F; Post money based on the non-converted yet safe)<p>_____<p>SEED (Demo Day)<p>YC 1 --------------- 5.6% ($ 125K SAFE converts)<p>YC 2 ($ 375K) ---- 4.29% ($ 375K SAFE converts)<p>VC ($ 700K) ------ 10%<p>Option pool ------- 10%<p>Founders ---------- 70.11%<p>Total Investments: $ 1 200 000<p>Valuation: $ 7 000 000 &#x2F; Post money<p>_____<p>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&#x27;t want to lose a bigger share it&#x27;s worth targeting at valuation higher than $7M and starting at least at $10M post money to get $1M investment.<p>Please, correct me if I missed something.<p>Calculations are done based on Safe Conversion Financing section in the The Y Combinator Deal [1]:<p>Step 1: Price for the round is set and the two SAFEs are converted;<p>Step 2: A stock option pool is created;<p>Step 3: New money is invested in the company.<p>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.<p>[1] <a href="https:&#x2F;&#x2F;www.ycombinator.com&#x2F;deal&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.ycombinator.com&#x2F;deal&#x2F;</a>

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&#x27;t make financial sense for us.<p>IIRC as soon as we signed the deal they would have 10x&#x27;d.<p>Overall, I think not signing was a mistake. But YC is very expensive.

I have no input on the value of YC and the companies they back, but it&#x27;s frustrating how their hiring posts on HN itself isn&#x27;t allowed to be commented on. Maybe then we&#x27;d have a better feedback loop on their incubation.

Thanks for writing this up. The white on black background made me blind for today.

There&#x27;s something to be said for having churn in some disciplines rather than a comfortable consistency.<p>And that something is Goodhart&#x27;s Law. The longer the game, the more game theory you&#x27;re dealing with.

Anyone have similar insights about Entrepreneur First? Btw I still don&#x27;t understand if during the program they you a salary anyway or only if they end up taking a stake in your company.

Geez my eyes, what happened to rule #1 never use pure black?

I am surprised they got with that idea into the Batch.

Is there a way to get the Bookface knowledge base without participating in YC?

i was looking to do yc but decided against it because of the remote aspect

I would put that footnote at the top, it&#x27;s very important context.

Interesting article!<p>&gt;<i>&quot;Remember: accelerators and their help are temporary but the equity you give away forever&quot;</i><p>True!<p>But the other side of that argument (<i>&quot;The opposite of a fact is falsehood, but the opposite of one profound truth may very well be another profound truth.&quot; - Niels Bohr</i>) -- is that some entrepreneurial endeavors <i>require</i> the assistance of multiple specialized parties without whose help the entrepreneurial endeavor will not succed, and:<p>Owning only <i>part</i> of a business venture that is successful -- might very well be more valuable -- than owning <i>all</i> of a business venture that is unsuccessful...<p>In other words, a founder who accepts <i>capital for equity</i> (AKA &quot;Debt&quot;) 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...<p>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 <i>we don&#x27;t want to give away any equity in our future companies</i> -- 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&#x27;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...<p>So which of these two approaches is right?<p>Well, I don&#x27;t think either one of them is wrong -- it all depends on the individual or individuals involved and their personal preferences, goals and values...<p>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...<p>A single founder who has never given so much as a single percent of equity -- will have his company taken from him over &quot;his (proverbially) dead body&quot;...<p>That differentiator is <i>ownership</i> -- <i>true ownership</i> -- of a company...<p>Still, there is value in &quot;team lifts&quot;, and putting together teams to accomplish what single founders cannot accomplish alone...<p>Related: Joel Spolsky, &quot;Foreword to &#x27;Eric Sink on the Business of Software&#x27;&quot;: <a href="https:&#x2F;&#x2F;www.joelonsoftware.com&#x2F;2006&#x2F;04&#x2F;07&#x2F;foreword-to-8220eric-sink-on-the-business-of-software8221&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.joelonsoftware.com&#x2F;2006&#x2F;04&#x2F;07&#x2F;foreword-to-8220er...</a>

&quot;B) Sell your product to startups and see a lot of benefits from gaining access to the YC network.&quot;<p>Keep everything inside the distorted reality of the &quot;tech&quot; community. The &quot;YC Network&quot; sounds like MLM, something like Herbalife or Amway.<p>This reminded me of a recent NYT article that mentioned YC.<p><a href="https:&#x2F;&#x2F;www.nytimes.com&#x2F;2023&#x2F;03&#x2F;17&#x2F;technology&#x2F;svb-tech-start-ups.html" rel="nofollow">https:&#x2F;&#x2F;www.nytimes.com&#x2F;2023&#x2F;03&#x2F;17&#x2F;technology&#x2F;svb-tech-start...</a><p>The article discussed how SVB made loans to &quot;tech&quot; start-up founders who had just received funds from &quot;tech&quot; VC, the bank&#x27;s primary customers.<p>First, cults require some &quot;reality-distortion&quot; to use Steve Jobs&#x27; term. Close people off from the outside world, e.g., traditional banks.<p>&quot;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.<p>That unique and often irrational reality required a specialized bank.&quot;<p>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.<p>&quot;SVB&#x27;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&#x27;s 2022 class of tech entrepreneurs over the summer.<p>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&#x27;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&#x27;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.<p>SVB&#x27;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.&quot;<p>Let&#x27;s see. &quot;Tech&quot; VC use a special bank. The special bank&#x27;s customers are generally only either &quot;tech&quot; VC or &quot;tech&quot; start-up founders. The &quot;tech&quot; VC deposit funds into &quot;tech&quot; start-up founder bank accounts. Then the special bank loans money (that likely came from &quot;tech&quot; VC) to &quot;tech&quot; start-up founders, based on dubious valuations made by the bank&#x27;s &quot;tech&quot; VC customers. The entire scheme is fully insulated from the reality of the outside world.<p>Someone I know who studied finance read this NYT article and commented that the term &quot;venture debt&quot; reminded him of &quot;EBITDA&quot;,^1 specifically Munger&#x27;s comment about replacing every instance of the acronym EBITDA with the words &quot;bullshit earnings&quot;.<p>1. <a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=tvnKylAyLbQ">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=tvnKylAyLbQ</a>