Is Y Combinator worth it? • Hacker News Board

Re: Is Y Combinator worth it?

#51

Post by marcinzm » Mon, Sep 28, 2020, 4:23 PM UTC

mediaman wrote: post #20

s17n wrote: post #13

Y Combinator has one of the strongest brands of any investor, which matters a ton for recruiting. It's very hard for engineers considering working at an early stage company to determine whether it's legit or not, and Y Combinator is probably a better known name than any VC. Personally when I was looking for jobs I'd immediately disqualify any company that wasn't backed by a relatively small list of investors and YC w…

Would you disqualify companies that had bootstrapped successfully, were profitable, and did not take any outside money? Not a judging question - I understand the value of a good investor's due diligence and backing in improving the odds of sane leadership. But it's interesting to think how that can impact a successful, self-funded copmany's access to talent.

As someone else said, as an employee my goals align better with investors than with bootstrap founders. I want good salary and equity that will grow rapidly in value and be liquid in reasonable time. I also want some reasonable measure that my equity is in fact growing in value. Even if the company doesn't go liquid in reasonable time with outside investors the chance of them being able to buy my stake at fair market value is decent.

Re: Is Y Combinator worth it?

#52

Post by marcinzm » Mon, Sep 28, 2020, 4:24 PM UTC

msoad wrote: post #49

drewrv wrote: post #36

Earlier quoted context omitted.

As a founder, self funding makes a lot of sense, as you avoid dilution and aren’t beholden to a group of people expecting 10x growth every year. But as a candidate I’d be cautious about taking a job at a self funded startup. They’re probably cash constrained so the base salary might not be as much. And if there is equity, I would want management beholden to people expecting 10x growth.

As an engineer I would love to work for a company that makes money and pays me from that money.

Curious, why does it matter if your paycheck comes from VC money or revenue money? In the end the same amount comes to your bank account.

Re: Is Y Combinator worth it?

#53

Post by [deleted] » Mon, Sep 28, 2020, 4:25 PM UTC

langitbiru wrote: post #47

doh wrote: post #35

YC is a fantastic shortcut to the Bay Area market. They protect you from abusive investors, attract talent and entice new customers. Farther you are from the Bay Area, less helpful they are though. Even in the Bay you can do it all by yourself, but it's much more complicated route filled with negative experiences. At least that's my experience. The way we were treated by highly celebrated investors was hard to swallo…

"abusive investors" -> Tell me more about them.

[deleted]

Re: Is Y Combinator worth it?

#54

Post by gogopuppygogo » Mon, Sep 28, 2020, 4:27 PM UTC

langitbiru wrote: post #47

doh wrote: post #35

YC is a fantastic shortcut to the Bay Area market. They protect you from abusive investors, attract talent and entice new customers. Farther you are from the Bay Area, less helpful they are though. Even in the Bay you can do it all by yourself, but it's much more complicated route filled with negative experiences. At least that's my experience. The way we were treated by highly celebrated investors was hard to swallo…

"abusive investors" -> Tell me more about them.

Ever been threatened with a lawsuit by an Angel with full time counsel at their disposal because you haven’t hit revenue targets in year one?

Ever had that investor write up a pedantic missive about your startup to mock their own investment?

Hostile investors are real and awful. Shielding startups from toxic money is a thing.

Re: Is Y Combinator worth it?

#55

Post by mikekij » Mon, Sep 28, 2020, 4:29 PM UTC

Yes. I was fortunate to be in YC W19. It was transformational for our company. Should I be fortunate enough to start another company, I would do it again, even though I now have access to the YC network of investors. I can't recommend it enough.

Re: Is Y Combinator worth it?

#56

Post by langitbiru » Mon, Sep 28, 2020, 4:31 PM UTC

gogopuppygogo wrote: post #54

langitbiru wrote: post #47

Earlier quoted context omitted.

"abusive investors" -> Tell me more about them.

Ever been threatened with a lawsuit by an Angel with full time counsel at their disposal because you haven’t hit revenue targets in year one? Ever had that investor write up a pedantic missive about your startup to mock their own investment? Hostile investors are real and awful. Shielding startups from toxic money is a thing.

We should have Glassdoor but for investors.

Re: Is Y Combinator worth it?

#57

Post by amacneil » Mon, Sep 28, 2020, 4:32 PM UTC

dustingetz wrote: post #15

> If your company is really successful, you may find yourself in a position where you need to negotiate some of those pro-rata rights in order to make the round work (i.e., make enough room to accomodate new new investor demand). ... early seed-stage commitment may upset other investors. Other angel/seed/Series A investors can become unhappy when having to live on a cap table alongside YC. What's this about?

YC takes 7%. Lead seed investor wants to take 15-20% to make it worth their while. Lead series A investor wants to take 15-20% to make it worth their while. Other investors and option pools each round increase dilution further.

Founder doesn't want to give up 50-60% of company by their series A, so because they gave YC 7% they must either convince the lead investors to take a smaller percentage, or convince YC or seed investors to drop their pro rata rights.

Of course, you could argue that the company wouldn't have seed or series A investment had they not joined YC, so in that sense it's a nice problem to have.

Re: Is Y Combinator worth it?

#58

Post by crsv » Mon, Sep 28, 2020, 4:34 PM UTC

I think if you’re young, don’t have an established family and don’t have any real experience as a founder then YC is something that will be an incredible benefit to you on many levels. Once you’re outside of those demographics, the value falls off dramatically IMO.

Re: Is Y Combinator worth it?

#59

Post by rtx » Mon, Sep 28, 2020, 4:36 PM UTC

langitbiru wrote: post #56

gogopuppygogo wrote: post #54

Earlier quoted context omitted.

Ever been threatened with a lawsuit by an Angel with full time counsel at their disposal because you haven’t hit revenue targets in year one? Ever had that investor write up a pedantic missive about your startup to mock their own investment? Hostile investors are real and awful. Shielding startups from toxic money is a thing.

We should have Glassdoor but for investors.

They will buy it.

Re: Is Y Combinator worth it?

#60

Post by 2arrs2ells » Mon, Sep 28, 2020, 4:40 PM UTC

LiamHz wrote: post #8

mrwnmonm wrote: post #3

I hope if someone can provide some statistics on how many YC companies shutdown after X years. That would be very interesting.

This has info (year, exit / dead, one line description) of 1281 YC companies [0] Out of the 49 companies in the S11 batch, 10 exited, 17 are "dead", and 22 have no status. Most of the companies from the W16 batch have no status listed. [0]: https://yclist.com/

The database maintained by YC is going to be a lot more accurate: https://www.ycombinator.com/companies/?batch=S11&status=Acti...

For S11, 21 companies are still active, with 5 (GoCardless, Segment, Zeus, Vidyard, and Sift) in the "YC Top 100" (valued at $150mm or more). At least one (Segment) is valued at $1bn+.