How insane would it be if you got a YC rejection letter, but a Sequoia interview... :D
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. ;)