I have no input on the value of YC and the companies they back, but it's frustrating how their hiring posts on HN itself isn't allowed to be commented on. Maybe then we'd have a better feedback loop on their incubation.
Is Y Combinator worth the money?
301–310 of 349 posts
Re: Is Y Combinator worth the money?
#302Earlier 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…
Is being a defense contractor that bad?
Re: Is Y Combinator worth the money?
#303> 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. Wait, the additional $375k is an uncapped SAFE. How could a company “easily raise at better terms”?
Add one angel or one early commit of 10k to it and the uncapped SAFE turns into a very bad SAFE. Basically it blocks you from flexibility of building up fundraising moment gradually.
That appears to be an unfair statement.
Your problem is that the YC terms are generous, and what you are complaining about is a hypothetical where you trigger a problem by causing an early valuation. If you choose to, you get given $375k by YC, that will usually convert at the price of your future round A valuation, also the SAFE doesn’t have a discount or onerous conditions from YC (YC has zero incentive to stiff you over a measly few hundred k, from their perspective). That is far more generous than most investors who want to capture the gains between angel and round-A (e.g. the angel below who wouldn’t ever consider an uncapped SAFE, for good reasons).
If you want your angels or $10k, get them into your Cap table before YC (just like you had prior investors?). Or ask YC for an exemption, which I would expect them to give you for a reasonable request (although I admit I am just guessing).
I suspect there are many ways that you can stiff YC out of their money, because the terms are founder friendly in comparison with most VC terms? Could someone sell 5% of the company to VC_BOB for “round A” at a ridiculous overvaluation (diluting YC’s SAFE’s), then shortly afterwards sell 15% to VC_BOB for “round B” at a normal valuation?
My intuition is that YC is playing an iterated game where reputation is everything, so YC has little interest in screwing over founders (YC seems wayyy more founder friendly than most VCs). YC probably wants unethical founders to show themselves sooner, rather than waste time on them. YC is interested in the few big IPO winners - and filtering for them and investing their time in them. YC might punish highly egregiously public cases to avoid having YC look like soft touches. YC can do the uncapped SAFE because they structure everything to get the round A valuation within months at demo day (they don’t seem to care so much about their gains as an “angel”).
Generally I found the points in your article to be fairly weak, and unfairly critical, and missing important details (e.g. your founder’s over-dilution). Disappointment is expected for over 50% of YC inductees, but I don’t see that YC has been bad for you. Some cash, access to resources, a lot of learning, and the ability to try again! Disclaimer: no love for YC, I just prefer people to be fair in their judgements.
Re: Is Y Combinator worth the money?
#304Earlier 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…
Doing a thing, and doing it well is a really good differentiator! The thing about software is that it scales way easier than a Korean bakery, so the brand itself is the important differentiation. If you can identify a need in the market and throw the right pieces at it, and spend 6-months building it in secret, that 6-month head start building your product and adding features before you release to the public is your…
Did Slack even spend 6 months building something in secret? Microsoft and everyone else were already in that space. If anything it felt like Slack were the ones playing catch-up.
Re: Is Y Combinator worth the money?
#305Earlier quoted context omitted.
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…
Is being a defense contractor that bad?
No but you don't need a Stanford degree to do it. They hire out of local areas. My girlfriend is attending ASU virtually right now and I've been really impressed with their program. When she said she was learning Matlab in a fairly normal math course I had a bit of a revelation about the defense partners of the school.
Re: Is Y Combinator worth the money?
#306I was also in the W22 batch. While I don't know Oleksii (to his point!), I'm left thinking that he might not have understood and acted on YC's advice.
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's harmful to talk to investors early in YC when you have the leverage of demo day far ahead of you, but it's priority #1 closer to the end of batch. YC clearly guides founders through this process, if you listen and follow their advice.
The founders I know who were repeatedly told the generic advice of building and talking to users had a bad product that wasn't improving quickly (including us for a while!). I don'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.
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'll hopefully work on my startup for years to come, I would apply to YC again in a heartbeat.
Re: Is Y Combinator worth the money?
#307I wonder how much of this is a function of the W22 batch being remote. 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 o…
> All of them are solid, kind, high-quality people, the likes of which you are unlikely to meet in the regular world. This attitude may have something to do with the skepticism we low-quality people out in the regular world may harbor for the Silicon Valley startup sphere
Definitely could have worded that better, but my point is that I found YC to cultivate a density of smart + ambitious + nice people that I haven't found in quite the same quantities in most other networks I've been a part of.
Tons of incredible non-YC folks out there too.
Re: Is Y Combinator worth the money?
#308Earlier quoted context omitted.
maybe my brain is sleed-deprived but this doesn't feel great to me either. can we not be high quality people without those connections, regardless of how those connections might be made easier for the rare individuals who participate in YC?
Who is saying you/we are not high quality people? No one is saying that high quality people don't exist outside YC, just that YC accepts high quality people. You are committing the logical fallacy known as the fallacy of composition [0]. [0] https://en.wikipedia.org/wiki/Fallacy_of_composition
I believe this was the offending sentence fragment that implied the sentiment you say is not there: "the likes of which you are unlikely to meet in the regular world"
Re: Is Y Combinator worth the money?
#309Earlier quoted context omitted.
> Whenever I see interviews with YC advisors, they blame mistakes of founders of not taking their advice as the biggest as mistake. This is normal human behavior. You did X and failed. If only you had done Y as I had suggested... Monday morning quarterbacking at it's finest.
My experience is usually more like being told to do X, me saying X probably isn’t worth the time and energy, doing X anyway at their prompting assuming they’ll take some accountability for it going sideways, it ultimately going sideways because it was a bad idea, and then them taking zero accountability for their bad idea and not helping with the fact we’ve now been materially set back by the attempt. I’ve since lear…
As someone who has raised hundreds of millions of dollars for venture capital backed companies, I can tell you that this absolutely does not change even at the highest level of the company.
My advice from experience - if the advice you're receiving is wrong and you know it's wrong, explain why it's wrong and if you're pressured to go against your advice, then that person is not a fit for you and you should part ways.
Re: Is Y Combinator worth the money?
#310Earlier quoted context omitted.
My experience is usually more like being told to do X, me saying X probably isn’t worth the time and energy, doing X anyway at their prompting assuming they’ll take some accountability for it going sideways, it ultimately going sideways because it was a bad idea, and then them taking zero accountability for their bad idea and not helping with the fact we’ve now been materially set back by the attempt. I’ve since lear…
As someone who has raised hundreds of millions of dollars for venture capital backed companies, I can tell you that this absolutely does not change even at the highest level of the company. My advice from experience - if the advice you're receiving is wrong and you know it's wrong, explain why it's wrong and if you're pressured to go against your advice, then that person is not a fit for you and you should part ways.
Thanks for the tip. That’s more or less where I’ve ended up with things. Initially I was obstinate to predictable deleterious result. Then I went through being compliant only to be hung out to dry for abiding when it didn’t work out. Then I went through a phase of trying to educate in hopes of them coming around to no avail. Now I just look for stronger signs of alignment right out of the gate before even bothering to spend the time engaging at all.