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Comment by ignoramous | Hacker News Reader

YC has to react to VCs entering early stage investment. Accel in India grants upto $250K to startup founders (no strings attached) [0], while Sequoia seeds select startups with $1M in capital [1]. In India, $250K's roughly worth what ~$4M would be in the US.

Just to put the amount in perspective: Our team of 3 engs in India got a generous $12K grant from Mozilla in June 2020, which has kept lights on our toy project for 2 years now. I think we can stretch that budget to 3.

YC $500K is a total game changer for startups overseas (esp in countries with lower cost of living).

[0] https://atoms.accel.com/

[1] https://surgeahead.com/

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YC’s value is still in the networking and signaling aspects.

I’ve interviewed and worked with a surprisingly large number of YC founders whose startups didn’t go anywhere. It’s amazing how much weight the YC founder background carriers in tech circles. For the one person I’m most familiar with, their YC startup went nowhere, they didn’t even get a prototype put together, and the team fell apart because they couldn’t get along with each other. Yet just mentioning their YC founder background or putting it in a resume (or Twitter bio) grants them instant credibility and a huge reputation boost. It’s fascinating to watch.

On the other hand, the VCs I’m still in touch with seem well aware of how this game is played. They still have a lot of respect for the top founders and companies coming out of YC, but it’s also understood that YC is kind of a numbers game these days and just getting accepted to YC (or other top accelerators) doesn’t mean much on its own.

Reputation boost amongst who, where? You partially answered that in that VCs, arguably who you're likely wanting to impress with your associations, likely take the YC connection with a grain of salt?

A startup I was at had plans to apply to join YC but then pulled in $4.5m in funding as a seed round. There's just so much money out there right now, I can't imagine giving up 7% for what amounts to pennies.

Admittedly joining YC in theory has knock off benefits like AWS credits, but the reality is most companies willing to give you discounts or credits because of YC will give you that same discount just for getting funding. You're basically giving up that equity for networking.

Accel's $250k deal does not appear to be a grant, which is truly no-strings attached money. It looks like a convertible note with no valuation cap; so non-dilutive until the first priced-round.

It's a game changer for US companies as well !

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