Comment by middleout | Hacker News Reader

Comment by middleout | Hacker News Reader

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my 2c, as a casual, third party observer:

Kudos: afaict, yc is a "good actor" in contrast to "bad actor" VCs that have received recent notoriety

yc does its part in putting out knowledge into the world re: how to build startups (cynically, this is to promote brand, PR)

yc funds non-profits

yc promotes diversity esp relative to its SV peers

Criticism: yc is elitist. with a few exceptions (you have PMF), you have to know someone

yc is incredible for the 1% that get in, to the detriment (broadly) of the 99% that don't. they get a disproportionate amount of attention, capital and support

yc is a VC firm (+bootcamp), but with a vastly superior economic model, which is pretty incredible given how good VC economics are

the part about it not being about the money rings hollow. my guess is it's 90-95% about the money. YC partners have made hundreds of millions (in the future, YC will probably mint a few billionaires) of dollars. every batch, 7% of the equity of 100-150 "cream of the crop" startups goes to a handful of partners. if YC's primary goal was social impact, the batch would look a lot different -- not saying yc doesn't do good, but i think a typical VC is at least straightforward that their goal, and fiduciary responsibility is to make $. i think YC sugarcoats this for branding purposes when they de-emphasize this.

the narrative around SV has really taken a turn for the worse. income inequality is a real problem, and also getting worse. one could easily argue SV is exacerbating this, and YC is a factory of many of the startups causing this. the future is already here, it's just unevenly distributed

I’ll disagree with one point that I have direct personal knowledge of.

> Criticism: yc is elitist. with a few exceptions (you have PMF), you have to know someone

Not true for me. I knew no one and certainly did not have PMF (revenue equaled $0 when we were accepted). I learned about YC because I saw someone on a plane reading TechCrunch which led to PG’s essays which led me to YC which led me to apply.

What I did have was deep industry knowledge and an awesome cofounder with whom I had built a progressional services business.

Pro Tip: if you want an edge on the YC application, keep your application short but dense enough that you teach the reader something. Straight from PG: VCs know a little about a lot, so if you can teach them something new, they’re intrigued.

nwenzel: i actually thought about covering your case (see below), but decided it was too verbose.

edited: yc is elitist. with a few exceptions (you have PMF, second-time founder with exit under belt, obvious deep industry/technical knowledge), you have to know someone

in other words, there are a few types of founders (as listed above) that it's either a no-brainer, or a very good risk-reward/expected value proposition to fund under YC terms (ie. 2m pre-money). for everyone else, anecdotally, you have to know someone

also, i mean this respectfully, but one counterexample doesn't disprove my point. my belief is that we live in a world where connections matter, a lot (whether getting a job, into business school, VC funding, a coveted internship, etc), and that YC is no different. there are always exceptions, of course, but i'm saying this, as a generalization.

> with a few exceptions (you have PMF, second-time founder with exit under belt, obvious deep industry/technical knowledge), you have to know someone

I don't think this is true at all. Me and my co-founder had zero connections (being from Denmark, as far from the Valley as you can get), no previous startup experience, only an early pre-prototype (just barely above idea stage) of our product and obviously zero revenue (so no PMF whatsoever). I would hope that it came across that we had deep technical knowledge, but really how much can you communicate that in a 10 min interview?

We got accepted, and we were far from the only ones in our batch like that, so it is clearly possible to get into YC just on the quality of your idea and how well you can communicate it.

i don't think i'm explaining this well. I apologize for that.

i looked at your company. you and your cofounder had deep technical expertise in an area that was white-hot at the time (obviously not a perfect comp, but that was the year zynga ipo'ed on the strength of mobile gaming). so i am not surprised at all that you got into YC without any connections. im sure there are many deeply technical founders in "hot" areas such as AI, robotics, etc that are currently getting into YC without connections.

note: again, not a perfect comp, but they probably looked at you and thought that this has dropbox-like potential. also, perhaps you will disagree that the space was "white hot" based on your own personal experiences -- my rebuttal to this would be YC was probably ahead of the curve, as it usually is, as that space definitely became white hot if not around that time period, then shortly thereafter.

my point is that there are thousands of founders that apply every year to YC, who do not have PMF, prior exits, or obviously industry/technical knowledge in "hot" areas -- out of these folks, the ones that get in, i am guessing, had really good connections.

i honestly don't think i'm saying anything that outlandish. VCs don't even try to hide that you need to be connected with a "warm" intro to get their attention -- they make that publicly known. while there are always exceptions such as you and your cofounder, i don't think YC (which is for intents and purposes a VC with a better business model, a 3 month founder bootcamp, and afaict no LPs) is any different.

middleout: your hypothesis is that YC is elitist. Or you have to have PMF (evidence that what you’re doing is working), 2nd time founder (evidence that you have succeeded in the past), or deep subject matter expertise.

Traction, Prior Success, or evidence of subject matter expertise. Those sound like pretty good criteria to me. But, YC is actually looking for people who are “sufficiently determined”. Those three things are just evidence of determination.

As for the elitist case. I have no idea other than to say it seems false using a sample size of one (me) and a sample size of one batch (summer 2013).

i agree wholeheartedly that PMF, prior exit and deep industry/technical knowledge are pretty obvious things to look for when you're trying to make money as a venture investor.

let me try another way. let's say YC gets 20K applications. let's say 1K (using round numbers) fall into the above categories (PMF et al), and 19K do not.

of the 19k that do not, my guess is that of the ones (ie. the very, very lucky few of the 19K) that do actually get into YC, a high (statistically significant) proportion of those founders were very well connected. that's all i'm saying.

as for your last point, i think we can both agree that we're both just guessing, there's no real #s or transparency to prove or disprove, so maybe we can just agree to disagree.

edit: maybe "elitist" was the wrong word to use. OTOH, YC is widely considered the "harvard of accelerators". while that has many connotations, it would be silly to say that harvard and elitism are not associated

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