You know, I've been reading Hacker News for god-knows-how-long, and it never occurred to me to look up what Y Combinator even was.
Our Eternal September has arrived.
Was Y Combinator worth it?
41–50 of 123 posts
Re: Was Y Combinator worth it?
#42Re: Was Y Combinator worth it?
#43Earlier quoted context omitted.
many, many, many years
It's a rounding error in some of the budgets that startups deal with. It becomes closer to the situation with the Long Now, which is a clock to last 10,000 years. With LLMs, even the moderation becomes an fixture in the project that can endure. With Solar and a GPU and some Internet.
llm moderation, what could go wrong
Re: Was Y Combinator worth it?
#44Yes, I think YC is almost always worth it. Even as a founder who has raised VC and exited previously I found it to be worthwhile.
This is simply not true. The optimum path for all startups is to either bootstrap entirely or bootstrap up until the Series A where your negotiation position is the strongest because you know your unit economics and can demonstrate clear product-market fit. Of course many startups may simply not be able to bootstrap. But equally there are many startups who could but choose the YC/VC track because of cargo culting, na…
Bootstrap is more likely to hit a 10M exit
VC funded is more likely to hit a 1B exit
Depends on goals….
And yes I chose bootstrap.
Re: Was Y Combinator worth it?
#45[flagged]
Re: Was Y Combinator worth it?
#46Yes, I think YC is almost always worth it. Even as a founder who has raised VC and exited previously I found it to be worthwhile.
This is simply not true. The optimum path for all startups is to either bootstrap entirely or bootstrap up until the Series A where your negotiation position is the strongest because you know your unit economics and can demonstrate clear product-market fit. Of course many startups may simply not be able to bootstrap. But equally there are many startups who could but choose the YC/VC track because of cargo culting, na…
I've spent most of my career bootstrapping and I don't think this is true. If you are going to be the kind of startup that raises outside funding, you're better off following the YC playbook than you are trying to build negotiating leverage by achieving PMF with a slow go-to-market. Three big things I think you're missing here: first, the relatively low cost of previous-to-priced-round funding, second, the outsized impact of social proof (from YC itself to seed funders, from YC to A-round investors, and from seed funders), and third, the marginal value of a going-concern bootstrapped business to an A-round investor, versus the ability to plausibly tell a story about rapidly growing to a point where you can earn the investor a high-multiple return on their investment.
I think it might help to remember the investment strategy VC firms have. No matter how you structure a startup, it is more likely than not to fail; that's what companies do. The winners in an investment portfolio have to pay for the losers, which mean the winners have to pay big. And funds themselves have lifespans; for several reasons, they need to reach an answer on investments within a set timespan.
I think not raising money at all is a great strategy, and when it's viable, it's probably always superior. But if you're going to raise at all, slogging it out on pure sweat equity isn't a great way to build up credibility for an A-round. It might have been in 1999, but I don't think it is now; now, I think if you want to raise an A-round, the happy path is to raise a syndicated seed round first, and clearing the way for that seed round is probably one of the 3 biggest things you get out of YC.
Re: Was Y Combinator worth it?
#47The value of the YC network is difficult to even price. A Bookface profile alone is more flow on cutting-edge B2B than Oracle gets out of some crazy-senior sales/BD type.
You’re going to get in front of any VC even remotely in your sector if you do anything interesting and solidly executed.
And if you bust out completely you’re going to be on a first name basis with dozens of people who didn’t and now run highly-connected going concerns.
And you sign a highly-standardized, heavily-scrutinized SAFE with very founder-friendly convertibility?
Anyone who is meh on that? Must be fucking nice.
Re: Was Y Combinator worth it?
#48What a curious product: CSV import as a service (or hosted on premise). Would love to know where they pivoted from (according to the blog post).
We actually pivoted multiple times: 1. We applied to YC and initially started work on what we referred to as "data-stack-as-a-service". The premise was to provision, configure, and maintain the different components required for a data stack: Data Warehouse, Integrations, Transformations, Visualizations, etc. We had a working product and a few paying customers. Ultimately we decided to pivot as we felt the market for…
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Re: Was Y Combinator worth it?
#49Earlier quoted context omitted.
This is simply not true. The optimum path for all startups is to either bootstrap entirely or bootstrap up until the Series A where your negotiation position is the strongest because you know your unit economics and can demonstrate clear product-market fit. Of course many startups may simply not be able to bootstrap. But equally there are many startups who could but choose the YC/VC track because of cargo culting, na…
Bootstrap is more likely to hit a 10M exit VC funded is more likely to hit a 1B exit Depends on goals…. And yes I chose bootstrap.
It's not a binary choice.
You can bootstrap until Series A at which point you can decide what direction to go. Either a successful lifestyle business or a bigger VC backed business. But you can't choose if you take YC/Seed.
And you are more likely as a founder to acquire life changing wealth with a lifestyle business than a VC one.
Re: Was Y Combinator worth it?
#50One thing that makes me sceptical about Y Combinator is their emphasis on in-person meetings and USA-centric approach in general.
Firstly, unless you and your co-founders permanently relocate, you could start to burn through that $500k pretty quickly in travel costs. Is relocating to the USA legal for you? Will it cost you more money compared to your current cost of living? Do you have existing staff or facilities that you would be unable to supervise or move?
The article mentions how useful to them YC's resources and team were to answer questions about business operations like finance and paperwork. How applicable would these be if you're not registered in the USA, even if not in a particular state? Would YC's advice with, say, employment law, have any value if you were incorporated in Switzerland?
The same points would probably apply to the benefits offered by any further early investors that YC could introduce. All in all, after taking away the 'overcoming imposter syndrome', 'answering boring questions' and 'founder community' reasons, it looks to me like an expensive way to get a bit of capital and credibility for those outside of the USA. I would be especially interested to hear from non-American YC founders who would beg to differ.