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Comment by epicureanideal | Hacker News Reader

I've been interested in applying to YC for quite a while, but recently I graduated and moved to the south bay (near Mountain View) for work. It really stood out to me this time that $11,000 + $3,000n is not a lot of money. With 3 founders that's $20,000. 3 founders working in the tech industry can make $20,000 PER MONTH on typical salaries. It seems like it would be more appealing to people without good paying work, or who are interested more for the connections (which maybe applies to me, I'm thinking about it). Assuming all 3 founders cohabit (which I think is standard), this is a reasonable amount of money to live on, but it would be fairly bare bones if my quick mental math is right.

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It's not about the money, it's enough to survive. The founders of Reddit after selling their company for tens of millions went through YC again for Hipmunk. It's not about the money, its about the people.

Exactly. That's the main reason I want to get accepted into YC. The contacts and people you meet are going to be way more valuable to you and your startup than the money itself. If you had a good paying job, you could probably save up and fund the $11k yourself. YC is just a good way to fast track your startup and get it moving right from the beginning.

"It seems like it would be more appealing to people without good paying work"

Good paying work is golden handcuffs.

Many of the people who started on the net (90's) were able to do so because they had nothing else significant going on at the time. If they had a high paid corporate job, or even a "normal" paying job, were an attorney, or even ran a small business, they had neither the time nor did it make sense to take chances.

If you have nothing, as Dylan said, you have nothing to lose.

(1) You get $150,000 from Start Fund.

(2) As founders, you should NOT be paying yourselves real salary until you raise significant money. Even then, you should be paying yourselves on the order of $50-60K/year, modulo a few edge cases if you have a family, mortgage, etc.

50-60k in the BAY AREA? Yikes!

I've always looked at the yc program not as a means to get funds but rather as a sort of exclusive community where you get very good advice for your startup. if money is crucial for starting your business then you might indeed be better of with more traditional VCs.

As a startup founder, you should NOT be paying yourself anywhere near $20k/month - that's why you have equity. If the company does well, you'll make a lot when you get bought or IPO.

I said 3 founders at their day jobs would make >= $20k/month. Not that I would pay each of them that much.

One thing I noticed while in YC was that the most successful people I met (founders, investors, etc) weren't primarily motivated by the financial rewards. Money is a result of a successful venture, not the main objective.

Point is, founding a startup doesn't actually make sense from a financial perspective. Most often you will be more profitable having been employed.

The way to think about this is:

burn rate = (runway)^(-1)

Reining in your burn rate as much as feasible is one of the easiest ways to extend your runway, and your chance of getting to awesomeness.

A typical job is a better way to maximize one's disposable income reliably next month or next year.

Don't forget that Start Fund offers every YC startup a $150k uncapped convertible note.

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