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Is Y Combinator worth the money?

news.ycombinator.com

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Re: Is Y Combinator worth the money?

#331

Post by majani »

gist wrote: post #109
xwdv wrote: post #12

Earlier quoted context omitted.

It’s not like an Ivy League, it’s more like joining a frat, but for startups. Except, it used to be more fun, when all companies worked at the same location and you could bump into people in halls and then go do keg stands after work or sleep on couches, etc. Now it’s just remote webinar garbage, talk to some people on Zoom, etc.

> It’s not like an Ivy League The Ivy League is talked about and well known all over and public knowledge your neighbor your aunt, your wife, your mother, the guy who owns the local bakery etc. It's an international brand. YC known in the startup community. Most likely the guy who runs the local 200 person wholesale operation wouldn't even know about it unless he read about it in the WSJ he reads print edition. Go to…

In my experience, even most people in tech don't know what YC is (I am based in Kenya, so this probably skews the results).

Re: Is Y Combinator worth the money?

#332

Post by fuzzfactor »

JohnFen wrote: post #318
lmm wrote: post #294

Earlier quoted context omitted.

> Writing software is not a differentiator. It’s not a shortcut to big bucks. It’s not a solution in itself. It’s just a tool. Anything you can write in a week (or 3 months) can be done by 100,000 other people—-in a week (or 3 months). > You have to start with a problem, defined by a large group of people, that you have the experience and expertise to solve in a unique and valuable way. That precise argument is why I…

> As I get older I'm more and more convinced that actually doing anything at all can be a differentiator. Indeed. This has always been true, and will always be true. Thus the old saw about how "80% of success is just showing up."

>Thus the old saw about how "80% of success is just showing up."

I'm old and I saw that when I was young.

>actually doing anything at all can be a differentiator.

The other 20% is taking action like so many do not do.

Re: Is Y Combinator worth the money?

#333

Post by zamnos »

lmm wrote: post #326
zamnos wrote: post #323

Earlier quoted context omitted.

ah yeah that's a fair point. Look at Skype, they've been doing video calls since approximately the beginning of the public Internet. Yet zoom was still able to become the dominant cross-platform video chat app. So that "build in private for 6 months and be ahead of your competitors" isn't a one size fits all tactic. "doing it better" is another good moat.

It's not a "moat" in any meaningful sense as far as I can see. Doing it better isn't a particularly defensible position, it's just something you can win by doing.

You have to rotate your thinking 90° to see things my way (you don't have to. your opinion is as valid as mine, I think my reasoning make me right, but I'm biased). But your moat is how you defend your castle, and, outside of having a patent on the core piece, all moats only take time and money to shovel in enough dirt to be moot. Does Tesla have a moat? They have a huge head start on EVs, and being vertically integrated to a degree that other car makers are trying to catch up to. They'll eventually get to where Tesla is in 2023, but by that time, Tesla is going to be ahead by however many years it took them to get there.

Re: Is Y Combinator worth the money?

#335

Post by jongjong »

acecreamu wrote: post #280
jongjong wrote: post #256

Earlier quoted context omitted.

I already met many investors and millionaire founders. I even met 2 founders who are now billionaires and many others who went on to become multimillionaires. Nowadays most of them won't even answer my emails. One of the founders I met before they were successful (and who sold their startup for millions) won't even give me a $2000 per year support contract though they continue to use my open source project and ask me…

Don't try to blame others, see what works for you and where you can improve. Some people can make other run for them and send donations without even trying. It's not about them or cruel word. Your problems are about you, and you need to either solve them or to switch to something that works for you, or you will be suffering the rest of life.

I find that hard to believe. I tried a lot of things. I switched between many companies, changed industries, moved to many different countries around the world to find opportunities, I tried playing the patient nice guy for years, I also played more assertive in later years, changed my entire personality to act like an extrovert, started blogs, pursued investors (attending events), started open source projects (one which became popular in its industry), got involved in blockchain space built my own unique projects from scratch... Nothing delivered financial results. I feel like I tried essentially everything so I know it's not something I can control.

When I study people who succeeded, the main difference I can see is that they got very lucky because they knew people who helped them get attention.

Most successful people seem to have this rosy perception of how things work; unfortunately, I cannot go back to that point. Once you've seen nasty stuff, you cannot un-see.

Re: Is Y Combinator worth the money?

#337

Post by Mikho »

ianbutler wrote: post #22

I'm surprised they haven'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's wisdom on free videos. Network is one of the primary reasons I had applied and interviewed with YC…

Wonder why YC wouldn't split into themed programs with less startups in each like some other accelerators. More focused themed groups could probably be more helpful for startups. Only very broad generic recommendations kind of work for everyone.

Re: Is Y Combinator worth the money?

#338

Post by hungryforcodes »

Dylan16807 wrote: post #129
hungryforcodes wrote: post #52

Earlier quoted context omitted.

Ah it could be if you learn from it-- which it sounds like they did. They would have learned mire imagine than if they had never had to make those choices and live with the consequences.

Only if what you learned is better than what you would have learned without that advice.

We can't accoubt for stupidity true. Almost every situation I encounter is a learning opportunity. Even a repetitive one where you learn : "Gee, I shouldn't do that again." : is a lesson.

Re: Is Y Combinator worth the money?

#339

Post by Mikho »

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:

If we consider that YC's $125K investment is Pre-seed and the demo day YC's $375K + VC money investments are Seed:

_____

PRE-SEED (Accepted to YC)

YC 1 ($ 125K) ---- 0% (SAFE didn't convert yet)

Founders ---------- 100%

Total Investments: $ 125k

Valuation: Isn't set yet (or $ 1 785 714 / Post money based on the non-converted yet safe)

_____

SEED (Demo Day)

YC 1 --------------- 5.6% ($ 125K SAFE converts)

YC 2 ($ 375K) ---- 4.29% ($ 375K SAFE converts)

VC ($ 700K) ------ 10%

Option pool ------- 10%

Founders ---------- 70.11%

Total Investments: $ 1 200 000

Valuation: $ 7 000 000 / Post money

_____

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't want to lose a bigger share it's worth targeting at valuation higher than $7M and starting at least at $10M post money to get $1M investment.

Please, correct me if I missed something.

Calculations are done based on Safe Conversion Financing section in the The Y Combinator Deal [1]:

Step 1: Price for the round is set and the two SAFEs are converted;

Step 2: A stock option pool is created;

Step 3: New money is invested in the company.

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.

[1] https://www.ycombinator.com/deal/

Re: Is Y Combinator worth the money?

#340

Post by yonz »

abfan1127 wrote: post #223
seshagiric wrote: post #180

Earlier quoted context omitted.

I could not help but notice the similarity with another popular question "Is MBA worth $100K+" and the equally similar answer "MBA is what you make of it".

this seems obvious, but its not for some. Should you get an MBA from Harvard? the material is probably very similar to other materials in other programs. But, the contacts you can make are probably priceless. Are you a shy individual who isn't going to put effort into meeting people, growing a network? probably not worth it because the actual advantage is the people, not the degree. A classic example I use is I atten…

I recently finished my MBA at Harvard and I have a lot of connections but surprisingly finding it hard to get the first check from institutional VCs.

P.S this is not a recent market phenomenon

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