There's always other places to turn to.
sequoiacap.com
For all of us that were rejected, remember there's always other places to turn to. Plus, 6% is awfully steep for $15-20K. Google gave up only 12% for millions in investments.
sequoiacap.com
These guys are friendly too: http://www.tandementrepreneurs.com/
No matter what they say, an introduction is the only real shot of success.
It's a lot like Ivy League universities. They are under enormous pressure to perform and house the next great research endeavors. Have you ever noticed that Ivy League universities never set strict requirements on admission whereas public universities do. This is because they recognize that many innovative minds would be passed over if they set strict criteria. Einstein, the great genious that he was, made lousy grades and was told by his early teachers that he would never make it in school. In fact he was told he should drop out. Einstein was actually told he did not belong in school. Thats the product of closed mindedness. It was not until Einstein recognized his true passions in life that he became the "genious" that he is considered today. Quite frankly, it takes genious to recognize genious. And traditional VC's don't have this genious. That is why they would set more limits on who they fund.
We are all told how ruthless VC's can be and how they will take your company from you. Michael Moritz of Sequoia capital invested a little over 12 million for a 10% stake in Google. In fact, founders in these leading VC backed firms end up being recognized as the most powerful forces in the companies. This is because the truly revolutionary VC's recognize that they do not have the vision of the founders. They are willing to relinquish some control.
But I guess my point here is the leaders in any field are willing to listen to new ideas from new people because they must, to stay ahead in their game. And that is what they want most of all.
You wont be referred to Sequoia right away, but the point is you meet people through people. It is a gradual process.
As my mother used to tell me: "Thin threads". Sometimes a random introduction can turn into something significant.
That's one of the main things that has attracted me to YC. It's very transparent and they seem fair and trustworthy. (too bad we got rejected - o well we're still releasing this year regardless)
I am not too disappointed that our application was rejected on those grounds. Really, who wants to give up so much for a few dollars and a chance to give a presentation?
Have you had any contact with Sequoia? If so, what are they like?
It is in their best interest not to turn people away on the basis of no-intro. The founders of many of their start-ups contacted them out of the blue with their plan and expressed desire to work with them.
Their strategy (lot of small investments) does take depend on economies of scale, so it's not as hands on as Sequoias, which depends a few big investments. They obviously won't spend as much time with you as a VC would because of that, but the time they do spend is proportionately more valuable.
You give up a small % of the company, and it's a lot more than a presentation. There are also advice, contacts, and credibility.
This is of course tongue-in-cheek right?
One of the primary factors that makes me say this is that Google got over $12million for only a 10% stake in the company from Sequoia Capital. I learned about this after we had already applied.
If PG would have asked us for an interview and invited us, I (personally) would have rejected the offer if their stake was to be more than say 2%.
YC is asking for a huge chunk for slight benefits. Its not tongue-in-cheek, its strictly good business.
You do. ;)