

Y Combinator: Party Like it's 2009 - pg
http://ycombinator.com/party.html

======
Timothee
It's good to see YCombinator applying what they're saying and expanding right
now. It's definitely true that if you have the money, a recession is probably
the best time to invest since it puts you ahead of more people/companies.

Also, I was really hoping for a real party. Paul, are you reading this? Maybe
just a drink at the Cheesecake Factory in Palo Alto? No? Oh well... good luck
with the expansion!

~~~
abossy
This makes me really happy. It's a great example of showing how a recession
can re-establish an innovative drive. With both large and small companies
cutting back, this is a great time to start your own company. I've been
thinking and writing a lot about how innovation in Silicon Valley feels like
it's floundering. Hopefully, this encourages people to start building cool
things if they aren't already.

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donaldc
Brilliant! I think everyone involved benefits:

* More startups get to receive YC aid and funding, and these startups are more likely to have (as a group) advice from/access to a top-tier VC firm.

* YC gets to fund more companies, while spreading the additional risk and reward around. This also means they get to expand the YC alumni network at a faster rate.

* Sequoia gets to invest, via YC, in web companies that may not need big enough rounds of funding for it to directly be worth Sequoia's time. And they arguably get a slight edge in investing in those YC startups that _do_ wind up wanting more money later. (I am not at all saying they have an official edge, but if they are somewhat familiar with a company from the YC stage, they'll have a slight natural edge. That's how familiarity works.)

* Silicon Valley wins, because that's where this is all happening.

I wonder who first broached the idea: YC or Sequoia?

~~~
skmurphy
"I wonder who broached the idea..."

I suggested it in <http://news.ycombinator.com/item?id=481791> "Why not raise
a side fund and do full fledged seed investing if you can pick winners?"

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numair
In order to make sense of this from a financial perspective, I'd have to know
more about the performance of YC's existing fund(s). Is that published
anywhere? The size of this deal is much smaller than the average Series A
funding round of a Sequoia startup, so this is quite a strange arrangement.

This really appears to be a validation of the importance and cachet of Sequoia
by YC, rather than the reverse. A very surprising move, which further leads me
to question existing YC performance.

~~~
pg
We have no idea what our performance will be. It could take 10 years to know
something like that, and the median YC startup is about 18 months old.

If you add up all the valuations of the companies we've invested in so far,
I'm pretty sure we're doing well on paper. But I don't even know how well,
because I've never done it. It would be so misleading; I'd rather just wait
till I have real data.

In the meantime we're operating on a hunch that YC is a good idea. The
evidence so far does tend to confirm that hunch, or we wouldn't be so eager to
expand.

~~~
numair
Thanks for the guidance, Paul. In thinking more about this, I came to the
conclusion that this is probably a "taster" for what may become a closer
relationship between YC and Sequoia. For example... Could you see a future
where YC was part of Sequoia? It seems to be a good fit, as they are not
currently targeting deals of the size you pursue, and you'd gain access to
their resources and infrastructure.

~~~
pg
I don't think of it that way and I'm sure they don't either. You can't have
the same company doing both seed and series A investments.

~~~
numair
A very good, and important, point. Several VCs have told me that they hate the
pain the comes with dealing with many seed/angel investors out there;
YCombinator has sort of established itself as the premier seed brand, and one
that eliminates the old problems with seed/angel while adding a ton of new
benefits. I suppose this could be a great symbiotic relationship, rather than
a "potential future synergy" (in corporate speak).

I'm still unsure why Sequoia was brought in if they really aren't getting any
preferential treatment, as I think this would be off-putting to other VCs out
there -- especially with such a small funding round, which I am sure could
have been raised without creating any conflict of interest, be it real or
perceived. You're a smart guy, so I am sure you had your reasons (access to
their administrative infrastructure / easier pipeline for having YC startups
acqu-hired by larger Sequoia-backed companies, perhaps?); you may not want to
disclose them, however, and I respect that.

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vaksel
Small error:

    
    
       Partly. It's easier to expand in in Silicon Valley,

~~~
pg
Thanks, fixed.

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YuriNiyazov
In one of your earlier essays, you called "incorporating and raising money an
O(1) pain in the ass" - would you say the complexity remained the same this
time around?

~~~
pg
This was easier than raising money for Viaweb in the sense that I didn't have
to try that hard to convince people, but harder in the sense that the
paperwork is more complicated.

~~~
tokenadult
Gaining outside investors means that you have established credibility as
someone who can identify early-stage start-ups with a bright future.
Congratulations.

------
webwright
Is the YC program going to change in any way? I've often wondered just how far
you guys can scale. I think we got a LOT of advantages coming into one of the
later sessions (bigger peer group, more credibility, bigger demo day), but I
envy the early YC classes a bit. I imagine back in the day, YC could REALLY
dig in and help on the product side.

So, with going up to 30 funded startups per session, does YC itself increase
headcount?

------
dbul
Smart. This is a good move. The chances of companies going public is greater
because you'll have more companies and the economy will be better at the same
time so it makes more sense to go public (for some startups) because the
market will be rebounding and stabilizing. This is good for YC, good for
Sequoia, and good for startups.

~~~
jonknee
How will YC funding 20 more startups per year encourage more startups to go
public?

~~~
pg
It may, actually. Partly simply because the larger the pool of startups, the
more candidates there are for IPOs. But there are two reasons startups started
now may be disproportionately likely to:

1\. Because M&A has decreased so much. The great startups are less likely to
be siphoned off by early acquisitions.

2\. Because people willing to start startups now are going to be extra-
determined. We've always wished we could put a question on the application
form asking "Do you _really_ want to do this?" It would be a waste of time,
because everyone would just say yes. But now the economy is supplying that
question for us.

------
jwilliams
Given the extended deadline - Is there a possibility/chance that the invites +
interviews will be pushed out?

~~~
pg
The application deadline and the day we respond have been pushed back (they're
now March 25 and April 6) but interviews still take place on the same weekend,
April 17-19.

~~~
ewjordan
Just a heads up, the <http://news.ycombinator.com/apply> page still lists the
old deadline, you may want to update that as well.

------
yters
I'm not sure if YC does this already, but here's a thought:

I'm sure many of the applications form clusters around common ideas. What
would be optimal is if YC could select the best parts of all the common ideas
and the best hackers to implement the ideas, instead of just one combination
of the two. This way more applicants are part of the actual YC sponsored
projects and the projects are more successful.

------
jey
Awesome h4x0ring, but it would've been better if you had done it without
damaging the existing link. You should write up an explanation of how you
pulled it off.

EDIT: Its source code is at <http://source.notabank.appjet.com> . Apparently
news.yc is generating edit-profile closures even when viewing a profile other
than your own.

------
ROFISH
I know Y Combinator is about starting up companies, but what about existing
ones? We're less than six months old and would love the experience, however we
are "ramen-profitable" with a bootstrapped investor structure. I think we're
too far ahead for YC.

~~~
zhyder
As long as you believe giving up 2-10% of your company to YC will improve your
outcome by at least as much, you should apply.

------
Rayzar
This is great news for all aspiring founders out there, at least some of now
have a bit more time time to prepare our applications and hopefully our
chances will be better due to the higher number of startups that will be
funded.

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listic
Is it still possible for foreigners to apply for this cycle right now? I.e.
can one get appropriate visa to get to US before April 16?

~~~
alanthonyc
depending on which country you're coming from and your personal financial
resources (i.e. bank account), it could be easy for you to get a quick tourist
visa or almost impossible

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paraschopra
Whoa! This really works. Who made it?

~~~
staunch
I figured it was pg trying to prove a point, but now I'm not entirely
certain...

~~~
hrabago
Think maybe someone confused hacker for cracker.

Edit: I believe this story used to link to <http://ycombinator.com/party.html>
.

~~~
thaumaturgy
"hackers" and "crackers" are not mutually exclusive terms. A safe cracker for
example has to have a lot of knowledge of locks and safes.

I think some of HN's superiority complex is contributing to the negative
attention it's getting right now. Maybe it would've been better to just admit
that some things aren't being designed here as well as they should be,
considering the focus and audience?

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deyan
congratulations!

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ryanb
such a sucka!!!

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markessien
You should have gone with _Summer of 2009_ as your headline.

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boredguy8
Congratulations.

Cash is king.

