To anybody considering applying: I've applied twice and been rejected both times.
Just the application process itself was hugely valuable. The questions really make you think out your model. It helped us identify some [now] obvious flaws in the way we were trying to solve our problem.
I've actually applied at least 6 times. Interviewed twice. Rejected every time, yet don't regret it at all.
Both times I was interviewed, I've continued the projects and they are actually both still going strong. Ones being funded by various grants (related to EEG research). The other, which I interviewed for W18, just launched and is already self-sustaining with profits off investing + subscriptions:
The process of interviewing helps to clarify business values, and honestly - I'll be applying again with a clearer vision. The main thing they appear to look for is viable business, future vision, then team. I highly recommend applying.
Finally, and the primary reason I suggest applying is the people you meet! Just from my trip for the interview(s) I met several different teams, some of them I ended up introducing to other people to get them business. Other startups ended up helping me. It's worth the trip.
The 2 founders of the company I work for applied twice and were rejected 2 times. The first time was mainly because they did not have a well laid plan for a company (only had an idea). The second time was mainly because investors feared an investment in a FinTech company on another country (this was not in USA) was too risky.
Of course their experience was very good (I am very close to both founders). They do say that they learned a lot just with the application process.
Fast forward several years, and the company is very healthy and running smoothly. It is somehow a "poster child" of startup in the country and has raised good amounts of capital.
The point is, do not get afraid to apply and do not get down if you are not accepted. The process of applying will on itself be very useful. Even if you are not from the USA.
Having also applied twice with two rejections, I didn’t feel like I got much value out of it, if any, and I didn’t apply the next time around.
I might apply this time with no idea just for the heck of it, I have a dozen ideas but don’t really like any of them, which is why I’ve been building a lifestyle business instead of building a startup.
I say this as someone whose recently been through YC. YC is getting phased out anyway. Crypto economics are doing what YC did to startup financing a decade ago. It's no longer any more valuable to even go through YC since it's so jam packed and over crowded. Maybe the network is slightly valuable, I concede, but my recommendation would be to not put yourself through the hassle and just create a normal business that doesn't need YC financing (or even VC financing for that matter).
YC is still the best and most open gateway to Silicon Valley investors.
But that's only true because they have no real competition and it's a closed system. An open system wouldn't require gateways. There wouldn't be a need to be walked into a private party by a trusted club member.
It looks like the answer to even this huge roadblock is new technology. Amazingly, it's not even theoretical at this point, it has actually begun.
These new decentralized protocols and "ICOs" are going to all but eliminate Silicon Valley as a center of orbit. All startup funding will move onto the internet, where it belongs.
The benefit of YC is specifically that they are a trusted club member, so investors have some idea about the chances that their investment will pay off. It's a good signal.
ICOs don't have the same level of trust because anybody can offer one. I'd rather have PG vouching for me than Kanye West. Sure, when Kanye tells his Twitter followers to buy your ICO it's going to go gangbusters, which is good for your company. But eventually enough of those ICOs are going to go sour in the public's eye and people will stop investing with them. YC will still be around after that.
I think you're making two points: one is about SV as the center of tech, and the other is about YC and similar "clubs".
For the second point, I think current ICO hype is going to have the exact opposite effect you predict in terms of clubs. ICOs are incredibly risky, and there is essentially zero regulation. To investors, a company being part of a "club" like Y Combinator suggests that some basic due diligence, idea/founder validation, and other de-risking signals. (Whether this is true or not, I'm not sure.) That's why they like investing in YC companies, I think we all agree.
For ICOs to actually be validated as successful longterm investments (i.e. scammy bubbles/pump-and-dump schemes, which many are, sadly), I think investors will need some assurances about the quality/risk of a given ICO. Since that's basically impossible (if investing were zero risk, there would be no upside!), trust and reputation are good proxies. This is where companies like YC and "valley" connections come in.
For better or worse, if ICOs are indeed the way of the future, they'll probably end up giving rise to that of infrastructure. Maybe that won't be tied to SV, as you suggest. But I think the "trusted club member" won't really ever go away, even if it isn't tied to SV.
I disagree. You need to have someway of filtering out companies that don't have potential. These 'gateways' are vetting on behalf of investors who don't have the time/resources to perform a rigorous due diligence of everyone who wants funding. Without any sort of closed system, investors would get swarmed with people asking for money. ICOs are interesting, but how do you get around the scams and pretenders without any sort of filter, if anyone can host an ICO?
There was nothing stopping VCs from funding people online the past 10 years. They meet in person because they need to meet the people behind the idea. I don't see this changing very much pre-VR-boom.
Even if you know your startup isn't the right fit or you and team are not the YC type, the application is hugely valuable because it makes you think long and hard about what you are doing.
We never got into YC, but we did end up with another accelerator. The one question that YC asks, that sets it apart is the question at the end: "what do you know about your industry or business that other people don't".
It's a simple question with a lot of meaning. I found that working out a concise answer to that question turned out to be key to our fundraising and product positioning. If you don't have a ready answer to that question, most investors and accelerators will just make their own assumptions about what you do. Our industry is NOT the most exciting and hot trend so having that answer left and center turned out to be key to presenting what we do in a good light.
Do the application even if you know you won't get in.
please give extra scrutiny to blockchain start ups looking to ICO. I've seen Y Combinator tossed around for a couple companies as a means to pump their coin, and I'm sure a lot of would be scam coiners would love that type of attention.
I'd be willing to bet that around half of applications this year will be "blockchain for ...". I'd also be willing to be that zero of them succeed long term.
YC is a great option to build a business. There are more paths though, so don't be discouraged. Stream participated in Techstars NYC. The MD in NYC (Alex Iskold) is excellent. It's been 2 years and he's still helping us out. YC does a great job of selecting companies, but they can't always get it right. Qualifying early stage companies is very hard. I'd definitely recommend giving Techstars some thought as well. They really go the extra mile to help you succeed.
Can anybody from recent batches comment on the extent of actual advice and mentoring received during the program?
E.g. do you typically work closely with your advisor(s) on near daily basis, or is this more like booking a meeting with your university professor occasionally, when you need to discuss a particular topic?
Interviews are planned for "late May", yet the program presumably starts on June 1. This seems to make for an awfully short interval between finding out one has been accepted and actually starting. Can someone from YC clarify?
> if your company is already incorporated as a non-United States company, to participate in YC you will need to convert your foreign company into a United States corporation
I have always wondered what this means exactly. If I'm the CEO of a company outside the US, that is unrelated to what the startup would be doing, does it matter?
Is it just a question of who owns the IP for the startup? And even if another company owns the IP, can't the IP be transferred/sold without converting the company itself?
It depends on specific circumstances. If the IP in the foreign company is truly unrelated, then there are circumstances where it could make sense to just start a new company in the US. If the US company is going to use the IP, then there are lots of potential solutions and structures.
Often we see founders with foreign companies do a share exchange so the shares in the foreign company are exchanged for shares in the US company and the foreign company then becomes a subsidiary of the US company. Particularly in the case where the founders plan to go back to their home country or to hire / operate in that country.
If you get accepted into YC and have already incorporated a foreign company, then we can help you figure out what the best solution would be in your situation.
If you aren't already incorporated and you don't have to immediately, then probably best to wait to find out if you're accepted into YC before incorporating anywhere other than the US.
We've been working on a hardware startup for about 7 years now, 8 years since I had the idea. It took us such a long time because we had to learn a lot of things. Our prototype is a two weeks away, and actual tests with users a little over a month away. What would the ideal time to apply? Now, as soon as the prototype is done or after actual tests with actual users?
The only thing I don't like is that it requires a US company. I wish they were more open to legal entities elsewhere. Even Canada would be a better option (for me) given its right next door.
If anyone has any info, I would love to know how often YC reject companies/ideas because of a conflict of interest or if there's any rules/guidelines around that?
We do have a policy on this. The short version is that we will fund competitors of companies we have funded in the past, so if that describes you, please don't be dissuaded from applying.
From our FAQ:
Will you fund multiple startups working on the same idea?
Yes. If you fund as many companies as we do it's unavoidable you'll end up with some overlap. Even if you tried not to accept competing companies, you'd still get overlap because startups' ideas morph so much. The way we deal with it is that when two startups are working on related stuff, we don't talk to one about what the other's doing.
In practice it has not turned out to be a problem, because most big markets have room for several slightly different solutions, and it's unlikely that two startups would do precisely the same thing.
From what I've seen over the years and heard from YC founders, it is not uncommon for YC to invest in competing businesses. They have a lot of companies, and it is very likely that at some point there will be companies that evolve into competing with other portfolio companies.
4. If we invest in you, your group is expected to move to
the Bay Area for June–August 2018.
6. Y Combinator doesn’t supply office space. We have space
you can use if you need to, but we expect you to work out
of wherever you find to live.
Why is it so important to be in the Bay Area? I get that for some interactions it'd be ideal to be there, but I don't see the need for a team to actually move there.
Sorry, no. We tried this once, and by Demo Day that startup was way behind the rest. What we do, we have to do in person. We would not be doing a startup a favor by not making them come to YC events in person.
However, you don't have to be in silicon valley 24x7. If you have a business that requires that you be somewhere else, we will work something out so you can participate in YC events while also being attentive to your business. Usually the founders will rotate between locations, or fly back and forth.
Of course, after the 3 month program, you can go wherever you want."
Approximately 7 years ago I applied to YC, and rightly so I was rejected [our idea sucked, our presentation of it sucked even more...i had a lot to learn in general]. Having said that, given how far the world has changed in that time, but how little progress YC seems to have made [other than diluting their value across a larger number of companies per cohort], I don't know they're still as interesting in the world today.
Additionally, i hate Bay Area "culture". I feel like it's got a lot of the problems Hollywood has, and frankly even if it didn't, i'm not sure I'd want to live in an overpriced apartment in the burbs. On the plus side, the weather is great...
This question has been asked many times before; Paul Graham has answered it in several essays, the most interesting of which I think is "A Taste for Makers".
Starting point for understanding why YC would want startups to move to the Bay Area would be be to read "Why to Move to a Startup Hub" by Paul Graham, one of the co-founders of YC:
[+] [-] blhack|8 years ago|reply
Just the application process itself was hugely valuable. The questions really make you think out your model. It helped us identify some [now] obvious flaws in the way we were trying to solve our problem.
You're not wasting anybody's time by applying.
[+] [-] lettergram|8 years ago|reply
Both times I was interviewed, I've continued the projects and they are actually both still going strong. Ones being funded by various grants (related to EEG research). The other, which I interviewed for W18, just launched and is already self-sustaining with profits off investing + subscriptions:
https://projectpiglet.com/
The process of interviewing helps to clarify business values, and honestly - I'll be applying again with a clearer vision. The main thing they appear to look for is viable business, future vision, then team. I highly recommend applying.
Finally, and the primary reason I suggest applying is the people you meet! Just from my trip for the interview(s) I met several different teams, some of them I ended up introducing to other people to get them business. Other startups ended up helping me. It's worth the trip.
[+] [-] xtracto|8 years ago|reply
Of course their experience was very good (I am very close to both founders). They do say that they learned a lot just with the application process.
Fast forward several years, and the company is very healthy and running smoothly. It is somehow a "poster child" of startup in the country and has raised good amounts of capital.
The point is, do not get afraid to apply and do not get down if you are not accepted. The process of applying will on itself be very useful. Even if you are not from the USA.
[+] [-] ikeboy|8 years ago|reply
I might apply this time with no idea just for the heck of it, I have a dozen ideas but don’t really like any of them, which is why I’ve been building a lifestyle business instead of building a startup.
[+] [-] WikipediasBad|8 years ago|reply
[+] [-] kylemarvin|8 years ago|reply
[+] [-] staunch|8 years ago|reply
But that's only true because they have no real competition and it's a closed system. An open system wouldn't require gateways. There wouldn't be a need to be walked into a private party by a trusted club member.
It looks like the answer to even this huge roadblock is new technology. Amazingly, it's not even theoretical at this point, it has actually begun.
These new decentralized protocols and "ICOs" are going to all but eliminate Silicon Valley as a center of orbit. All startup funding will move onto the internet, where it belongs.
[+] [-] olympus|8 years ago|reply
ICOs don't have the same level of trust because anybody can offer one. I'd rather have PG vouching for me than Kanye West. Sure, when Kanye tells his Twitter followers to buy your ICO it's going to go gangbusters, which is good for your company. But eventually enough of those ICOs are going to go sour in the public's eye and people will stop investing with them. YC will still be around after that.
[+] [-] aroman|8 years ago|reply
For the second point, I think current ICO hype is going to have the exact opposite effect you predict in terms of clubs. ICOs are incredibly risky, and there is essentially zero regulation. To investors, a company being part of a "club" like Y Combinator suggests that some basic due diligence, idea/founder validation, and other de-risking signals. (Whether this is true or not, I'm not sure.) That's why they like investing in YC companies, I think we all agree.
For ICOs to actually be validated as successful longterm investments (i.e. scammy bubbles/pump-and-dump schemes, which many are, sadly), I think investors will need some assurances about the quality/risk of a given ICO. Since that's basically impossible (if investing were zero risk, there would be no upside!), trust and reputation are good proxies. This is where companies like YC and "valley" connections come in.
For better or worse, if ICOs are indeed the way of the future, they'll probably end up giving rise to that of infrastructure. Maybe that won't be tied to SV, as you suggest. But I think the "trusted club member" won't really ever go away, even if it isn't tied to SV.
[+] [-] MediumD|8 years ago|reply
[+] [-] bsaul|8 years ago|reply
At least if someone gets ripped off, it isn't some poor needy person hoping to win the lottery.
[+] [-] LearnerHerzog|8 years ago|reply
[+] [-] avip|8 years ago|reply
[+] [-] foodislove|8 years ago|reply
We never got into YC, but we did end up with another accelerator. The one question that YC asks, that sets it apart is the question at the end: "what do you know about your industry or business that other people don't".
It's a simple question with a lot of meaning. I found that working out a concise answer to that question turned out to be key to our fundraising and product positioning. If you don't have a ready answer to that question, most investors and accelerators will just make their own assumptions about what you do. Our industry is NOT the most exciting and hot trend so having that answer left and center turned out to be key to presenting what we do in a good light.
Do the application even if you know you won't get in.
[+] [-] almostApatriot1|8 years ago|reply
[+] [-] sparkie|8 years ago|reply
[+] [-] jhwang5|8 years ago|reply
[+] [-] tschellenbach|8 years ago|reply
[+] [-] dlanged|8 years ago|reply
E.g. do you typically work closely with your advisor(s) on near daily basis, or is this more like booking a meeting with your university professor occasionally, when you need to discuss a particular topic?
[+] [-] seehafer|8 years ago|reply
[+] [-] ScottBurson|8 years ago|reply
[+] [-] katm|8 years ago|reply
[+] [-] hamslamwich|8 years ago|reply
[+] [-] snowmaker|8 years ago|reply
[+] [-] sAbakumoff|8 years ago|reply
[+] [-] rrecuero|8 years ago|reply
Here are some of the companies we funded:
Dharma.io, Quantstamp, Moneytis (now Request Network), Coinbase
[+] [-] chrischen|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] bambax|8 years ago|reply
I have always wondered what this means exactly. If I'm the CEO of a company outside the US, that is unrelated to what the startup would be doing, does it matter?
Is it just a question of who owns the IP for the startup? And even if another company owns the IP, can't the IP be transferred/sold without converting the company itself?
[+] [-] kirsty|8 years ago|reply
Often we see founders with foreign companies do a share exchange so the shares in the foreign company are exchanged for shares in the US company and the foreign company then becomes a subsidiary of the US company. Particularly in the case where the founders plan to go back to their home country or to hire / operate in that country.
If you get accepted into YC and have already incorporated a foreign company, then we can help you figure out what the best solution would be in your situation.
If you aren't already incorporated and you don't have to immediately, then probably best to wait to find out if you're accepted into YC before incorporating anywhere other than the US.
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] partoa|8 years ago|reply
[+] [-] EGreg|8 years ago|reply
https://news.ycombinator.com/item?id=2426118
Now our company has become pretty successful without taking any VC. David Heinemeier Hansson (one of our advisors btw) at least is pretty proud :)
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] sadfjaflj|8 years ago|reply
[+] [-] an4rchy|8 years ago|reply
[+] [-] snowmaker|8 years ago|reply
From our FAQ: Will you fund multiple startups working on the same idea?
Yes. If you fund as many companies as we do it's unavoidable you'll end up with some overlap. Even if you tried not to accept competing companies, you'd still get overlap because startups' ideas morph so much. The way we deal with it is that when two startups are working on related stuff, we don't talk to one about what the other's doing.
In practice it has not turned out to be a problem, because most big markets have room for several slightly different solutions, and it's unlikely that two startups would do precisely the same thing.
[+] [-] andreshb|8 years ago|reply
[+] [-] arekkas|8 years ago|reply
[+] [-] awaaz|8 years ago|reply
[+] [-] qnk|8 years ago|reply
[+] [-] LearnerHerzog|8 years ago|reply
"Can we do it without moving to where you are?
Sorry, no. We tried this once, and by Demo Day that startup was way behind the rest. What we do, we have to do in person. We would not be doing a startup a favor by not making them come to YC events in person.
However, you don't have to be in silicon valley 24x7. If you have a business that requires that you be somewhere else, we will work something out so you can participate in YC events while also being attentive to your business. Usually the founders will rotate between locations, or fly back and forth.
Of course, after the 3 month program, you can go wherever you want."
[+] [-] verelo|8 years ago|reply
Additionally, i hate Bay Area "culture". I feel like it's got a lot of the problems Hollywood has, and frankly even if it didn't, i'm not sure I'd want to live in an overpriced apartment in the burbs. On the plus side, the weather is great...
[+] [-] CapitalistCartr|8 years ago|reply
http://www.paulgraham.com/taste.html
[+] [-] V2hLe0ThslzRaV2|8 years ago|reply
http://www.paulgraham.com/startuphubs.html
[+] [-] nikanj|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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