
Ask HN: Should we still apply to YC even after told not to? - taapplyyc
Throwaway account for this one.. We&#x27;re a team of 2 and have tremendous growth since we&#x27;ve been founded last year and we always wanted to be part of YC for a couple of specific reasons than just the funding or mentorship.<p>We&#x27;re currently partnered with a big YC company and they&#x27;ve specifically requested us to not pursue VC money or apply to YC. I think the reason is when the time is right, they would want to acquire us at a very low price.<p>Since this is a YC company, would applying be a conflict of interest and we&#x27;d be just wasting our time or even worse.. cut ties on our trusted partnership?
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nostrademons
Tricky situation that only you can make the final call on. Some things to keep
in mind though:

1\. Your YC partner is very clearly looking out for their own interests - they
have more negotiating leverage when you're small, both in deals and in a
potential acquisition. Nothing wrong with that. But remember that it's _your_
job to look out for your own interests and that of your company. Nobody else
is gonna do it for you.

2\. Yes, it could damage the relationship with them if they find out. And it's
fairly likely they will find out; YC alums help read applications. Plan
accordingly.

3\. It's up to YC to decide whether it's a conflict of interest on their end.
They have funded direct competitors in the past (with several hundred startups
in their porfolio, it's kinda hard to avoid it), though, so I doubt they would
consider it a dealbreaker if your startup looks good on its own merits.

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SwellJoe
Alums reading applications are asked to skip applications that are potential
competitors. Of course, that doesn't preclude that other company from seeing
the application and recognizing the name.

I'm surprised and disappointed that a YC company would discourage another
group from applying that wants to, however. That's very much not in line with
the YC culture I'm familiar with; but, there are a whole lot of YC companies
now, so I guess there's all kinds.

This sounds like pretty shitty behavior, though.

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empressplay
Sounds kind of dodgy honestly, I don't think it's any of the other company's
business what you do in your own interest.

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kogir
Nobody at YC would balk at your applying, and all would probably encourage
you.

If you're worried about a YC alum at the partner company seeing your
application, reach out to YC - I'm no longer involved in the software, but
there may be a way to ensure your application isn't seen, or bypasses alumni
review completely. I think something like this may have even happened before.

That said, if you get in, you may lose the partnership. Only you can evaluate
how disruptive that will be for you and if it's worth the risk.

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sharemywin
Go sell the shit out of your service to other companies until their
partnership isn't your primary source of income.

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a_small_island
You're being played. Let them believe they're controlling you until you've
secured funding or joined YC.

Don't ever let someone outside your company tell you what to do.

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tedmiston
That's sort of at odds with taking venture capital...

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a_small_island
Touche.

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YuriNiyazov
Assuming you get in, you can ask this question from the YC team. If you don't
get in, I don't think YC will tell this company that you applied and didn't
get in, so there's no tie-cutting.

Edit: nostrademons makes a good point, but the chance of the specific YC alum
that is running this big company also being the one that reads your
application seems pretty small to me.

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aenachronism
Jack Welch, former CEO of General Electric, once said "control your destiny,
or somebody else will." Yep. Sounds about right.

Irrespective of what you ultimately decide to do, I would advise that you be
upfront and candid about it, because you are not doing anything wrong. Rather
than apply and hope that you slip under the radar, be firm but polite:

"After further reflection and consideration, we have decided that the best
course of action for us this point is to pursue an application to YC. We are
very excited about the prospect and look forward to continuing our
collaboration under the YC umbrella!! :D"

Note the mandatory smiley to soften the message. I'm being facetious here,
because there is no softening necessary.

You are not saying you wish to terminate your relationship with your partners,
your relationship with your partners has absolutely nothing to do with whether
or not you apply to YC.

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rwallace
You need to be willing to walk away from the partnership if necessary. Not
that it's something you want to do, but you can't let fear of it control your
actions.

Or conversely, if you decide you can't do that because you don't have a viable
business without it, then you need to acknowledge that you aren't building
something that has a chance of being an independent company, you're going for
a pure acquihire play.

And if the latter is the case, you need to re-evaluate. Acquihire can be a
fine plan B, but if it's plan A, is this still the best thing you could be
doing with your time? Maybe it is, but maybe it's not; it's a question you
have to ask yourselves.

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petervandijck
Hey, why don't you talk to the YC company again? Ask them why they advised
that, there might be a very different and valid reason, say you're tempted to
apply.

Nothing like shining some sunlight on things to clear everything up.

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davismwfl
There is no conflict of interest in you applying to YC IMO. The YC company is
likely being self serving here and your job is to look out for your own
interests.

That said, there is another option that people aren't mentioning, and that is
that their self serving interests may actually be somewhat aligned with your
own. Having been through YC they understand the time commitment and the level
of effort needed to go through it, the good and bad. They may be concerned
about your ability to keep servicing them as they need and growing with them
quick enough. So while self serving, it might not be because they want to hold
you down, but are worried you won't be able to live up to your commitments
with them. If you can grow organically, and not take (or delay) outside
investment because you have paying clients you are better off too.

In the end, regardless of their reasoning you have to do what you feel is best
for your team. If that means applying to YC do it. But I wouldn't do it
without being up front and having a talk with the YC company. Ask them to give
you their reasoning why you shouldn't apply, get their side. Maybe they are
willing to fund you, beyond just paying for product/services. Help them see
that your team being stronger is not bad for them, but a benefit. Even if
their eye is on acquisition, they may be willing to fund you to keep your
focus, after all they'd be basically paying themselves in the end. Outside of
SV a lot of companies work this way, you have a strong partnership with a
larger firm but you are small, so many times the larger firm will help keep
you afloat in various ways to make sure they are taken care of. Yes you have
to manage expectations properly, but it is quite successful a lot of times
(like anything though, it can be tragically unsuccessful too).

Even if your goal is to pursue Angle/VC funding, you need to realize it
becomes almost a full time job for 1 person (and both partners should be
pitching), and might take you the better part of 6-12 months to make the
necessary contacts, work them and get in front of enough people to get funded.
So again, their concern might be you team being so small and not having the
resources to keep them moving and get funding. If you have the contacts
already then you are still looking at 3-6 months at minimum, assuming you have
traction -- IMO.

No matter what, good luck and congrats on your growth!

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brudgers
My random advice from the internet: Apply and then examine your options in the
wake of the outcome. Unless of course, there is something prohibiting doing so
in your contract with the big company. In that case talk to your attorney.

In any event, there's no reason not to keep taking the big company's money.
But there's probably good reason to use it to develop other, potentially
better, customers.

Good luck.

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jklein11
I would have an opened and honest conversation with those at the YC company
that requested that you do not apply to YC. This way you can get a sense of
why they think you should not apply. Ultimately, the decision to apply or not
is entirely yours.

