Being part of Y Combinator (YC) provides access to additional benefits and support that are intentionally kept secret and not widely marketed. YC is not like a traditional university or school, but rather a constantly evolving product that adapts and changes over time. YC has been accused of being a mafia, but they deny it. YC offers privileges and access to resources to its members. Misconceptions about YC include not understanding its benefits when applying and having doubts about personal support and structure. Y Combinator offers a supportive environment and valuable resources for founders, which surpass the advantages of having a small check investor. Direct experience is crucial in forming accurate opinions about YC. Many successful YC companies were at an early stage when they applied, with some even just having an idea. YC provides an amazing peer group and protects founders from being taken advantage of by investors. Running an auction allows early-stage founders to set their own price and receive inbound offers from investors. Fake advisors in the startup industry often exploit and benefit themselves by funneling startups to others. Horror stories about investors taking advantage of founders during fundraising include buying a large portion of a company early on and giving misleading talking points. YC advises against starting with a pre-seed round and emphasizes the importance of gaining leverage before seeking funding.
Introduction
- Introduction to Y Combinator (YC)
- Michael Seibel and Dalton Caldwell discuss recent YC batch and feedback received
Expectations
- Y Combinator criticized for lack of effective communication with founders who apply
- Founders unaware of resources and support provided by YC
- Resources include follow-on investments, help with fundraising, and assistance with hiring
- YC acknowledges need for improvement in communication with applicants
Secret YC perks
The most profound aspect of the topic of Secret YC perks is that being part of Y Combinator provides access to additional benefits and support that are intentionally kept secret and not widely marketed.
Key points:
- Many people are aware of the three-month program and Demo Day, but are often surprised by the additional perks provided by YC.
- YC is not like a traditional university or school, but rather a constantly evolving product that adapts and changes over time.
- Being part of YC is like being in a club where members have access to resources and opportunities.
- The more ambitious and knowledgeable you are, the more doors will open for you.
Not a mafia
- Y Combinator has been accused of being a mafia, but they deny it.
- YC offers privileges and access to resources to its members.
- YC investors are less likely to take advantage of startups.
- YC has similarities to the mafia, but it is not a mafia.
Misconceptions
Misconceptions about Y Combinator include not understanding its benefits when applying and having doubts about personal support and structure. There have also been deliberate attacks to discourage people from joining.
Investors
Investors are often misunderstood as doing all the work for a company, but in reality, it is the responsibility of the founder to build the company. Y Combinator offers a supportive environment and valuable resources for founders, which surpass the advantages of having a small check investor.
- Investors do not do all the work for a company
- Founders are responsible for building their own company
- Y Combinator provides a supportive environment for founders
- Y Combinator offers access to valuable resources
- The benefits of Y Combinator outweigh those of a small check investor
Direct experience
- Direct experience is crucial in forming accurate opinions about something.
- Many people have strong opinions about Y Combinator without actually being in a batch.
- It is important to be curious and not blindly trust the opinions of others.
- A person in a YC batch noticed that those who had not been in YC had negative opinions, while those who had been in YC had positive opinions.
- He learned to weigh opinions based on direct experience.
The scale lie
The misconception that founders need to be far along in their startup journey before applying to Y Combinator (YC) is debunked through basic research. Many successful YC companies were at an early stage when they applied, with some even just having an idea. YC is not just for scaling, but also for starting, and they prefer funding new companies that have recently quit their jobs and are enthusiastic about starting a company. YC has funded companies in recent batches that had to change their ideas, emphasizing the importance of being flexible.
Why to do YC
YC provides an amazing peer group and protects founders from being taken advantage of by investors. They offer honest feedback and encourage founders to take responsibility for their company's success or failure. Many successful companies have gone through YC and critics fail to provide a compelling alternative. It is important to choose investors who are not focused on selling fear.
Recent batch
- The recent batch of Y Combinator companies did not see major changes in valuations, investor commitments, or terms.
- Fundraising expectations should not be based on anecdotes or articles, as each company's experience is unique.
- Fundraising is not a predictable market, but a unique ecosystem with its own dynamics.
Running an auction
- Running an auction allows early-stage founders to set their own price and receive inbound offers from investors.
- This is a different experience from traditional fundraising, where founders usually have to ask for money.
- Y Combinator companies experience a shift in their fundraising experience, with investors reaching out to them instead of the other way around.
Fake advisors
Fake advisors in the startup industry often appear friendly and approachable, but their main goal is to exploit and benefit themselves by funneling startups to others. It is important to find reputable advisors who can genuinely help startups succeed. In the context of Y Combinator, there have been instances of fake advisors who took a percentage of the company without providing any help with fundraising. Many YC founders have similar horror stories of bad experiences with fundraising before joining Y Combinator.
Horror stories
Horror stories about investors taking advantage of founders during fundraising include buying a large portion of a company early on, causing subsequent investors to be hesitant to invest, and giving misleading talking points. Other horror stories involve excessive legal fees and demands to be the last ones to invest, causing delays and uncertainty. Founders in the Y Combinator batch share similar horror stories, realizing they would have been better off waiting for better opportunities. YC advises against starting with a pre-seed round and emphasizes the importance of gaining leverage before seeking funding. Despite the challenges, the speaker finds the in-person interaction during the batch rewarding and expresses relief at surviving.