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?
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.
You do. ;)
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.
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.