

Going Through Y Combinator (YC S13): Lessons Learned - zt
http://blog.zactownsend.com/going-through-y-combinator-s13-nine-lessons-learned

======
minimax
_Kirsty Nathoo spends the second half of the day describing the basics of
corporate setup. She goes over all of the associated paperwork, the YC
investment, the YCVC notes, and advice on what to spend money on. It was a
fast, expert primer on corporate law, corporate finance, startup financing,
benefits, payroll, and more._

Can anyone recommend a good book on VC finance? It's hard to find anything
that goes into much depth on the web.

~~~
sokoloff
I liked Venture Deals: Be Smarter than your Lawyer and VC.

Amazon affiliate link:
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Amazon non-affiliate link: [http://www.amazon.com/Venture-Deals-Smarter-
Lawyer-Capitalis...](http://www.amazon.com/Venture-Deals-Smarter-Lawyer-
Capitalist/dp/1118443616)

(Choose whichever you prefer.)

~~~
minimax
Thanks (also thanks to mbesto)!

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alain94040
* In order to think through this, Dan and I walked around the same block in Mountain View several hundred times

Don't. If your startup is trying to sell to small businesses, stop asking the
business owners on Castro St. They already have more pitches than the VCs on
Sand Hill road. They are bombarded with half-baked ideas on how to get more
customers, make more money from existing customers, etc.

Long distance calls have been free for a while now: call some other state with
no startup culture and pitch to those business owners. They'll be both more
receptive and more representative of the overall business population.

~~~
zt
(I'm the author)

Sorry for my lack of clarity here. We weren't pitching customers in Mountain
View, we were just walking around a block a few hundred times -- talking and
thinking with each other.

~~~
tomblomfield
pg also seems to like doing office hours while walking in circles around the
same block

~~~
zt
As do other partners. This was a different block though, one that our house
was on.

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mikeleeorg
I think it might be interesting to see some stats on Prototype Day. Or, at
least, what factors contributed to high votes and whether or not those votes
had any correlation to the Demo Day and performance of the company beyond YC.

What I'm trying to get at is - YC obviously sees some kind of value in
Prototype Day, so what is the value and can others replicate that value in
some other way?

~~~
karamazov
Prototype Day is a chance to practice your pitch in front of your peers. For
most people, it's also the first chance to see what impacts an audience,
especially after they've just sat through 20 presentations. (This is helpful
both for pitching investors in general, and for demo day specifically.)

You can replicate a lot of the value by getting a group of serious founders
together and having them spend a day or half a day pitching to each other,
with feedback. If you can get a mentor experienced with the process to give
you feedback, even better.

~~~
mikeleeorg
That makes sense to me. What did Zachary mean when he wrote, "The partners
tell you not to prepare"? I understood that to mean you don't have to have a
pitch ready for Prototype Day yet.

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ther1
That was a great article - very insightful. A question though : Is it possible
to get into YC without having an actual working product? That is with just a
general idea for a product that you want to build?

The impression I got by reading all the stuff in the tech press, is that
almost no one will fund just an idea - even seed funding - you do need to have
a working product, and traction and customers, etc.

The other question is : Is it possible to get into YC if you are much older
than your mid-twenties or early thirties? I know it is theoretically possible
- but are there any YC founders in their forties or even fifties?

~~~
outericky
Just having an idea is tough. Having a market for that idea, with some
interest is better.

When we did YC, I was 36. I wasn't the oldest, but it was close. There have
been founders in their 40's and even 50's (as far as I know - could be even
more).

The problem with older founders... your needs are different (financial
burdens, children etc) which makes it more difficult to succeed. As a "kid"
you are much more likely to live with 6 other people eating ramen and coding
18 hrs a day.

~~~
akbar501
> The problem with older founders... your needs are different (financial
> burdens, children etc) which makes it more difficult to succeed.

This is an interesting point and one that I've seen multiple people bring up
over time on HN. Often as first hand feedback from the person with a family.
Financial obligations are more. No doubt. When I started my first company I
lived off of a few hundred dollars a month (personally) and put everything
else into the company.

And your point about "eating ramen" is too true.

In my experience, founding a company in my 20's, early 30's and doing one
again in my late 30's is that finding a big opportunity is equally hard at any
age. I don't see that getting any easier. However, what I do differently now
is that that I'm infinitely more disciplined. I talk to customers earlier, I
spend less time on building a prototype (6 weeks to 12 weeks max), and am
willing to kill an idea as soon as I realize that its not going to get me to
my goal.

What I'd be interested in seeing are stats on the success of 30+ founders who
are on a 2nd/3rd startup vs. 1st time founders who are 30+. My guess is these
two groups would diverge widely, but that's just a guess.

Importantly, I find some parts of starting a company much easier at this age.

First, and perhaps most importantly, my wife and I have committed to the
startup lifestyle (not a lifestyle business per say, but to pursuing
opportunities to grow our net worth). We openly discuss our goals. We have
been together through 2 companies, so we know how much of a pain this one will
be. We are in agreement that the costs of building a new company are worth the
potential to take us to the next level financially. I find this is where many
people think that starting a company after marriage is more difficult.
However, I have seen that being married can lighten your load as a founder if
you and your spouse agree on who will carry what load. One of my friend's had
the same conversation with his wife. She's starting a company, and he's
pulling a huge load at home. So the same advice works for both men and women.

In terms of distractions, I have way less of them now than when I was younger.
Everyone I know is busy with family and kids, so there is little pressure to
hang out and waste time.

This is totally personal experience/opinion, but kids have been a boon to my
startup work. There's no way to explain it except to say that spending time
with my daughters is calming. Stress be damned.

Maybe its just me, but I find the 20 year olds of today exceptionally capable.
I am super impressed with how good the younger generations are. They are
focused, motivated, capable. I find this beneficial both because I have now
have experience, but there is an entire younger generation who are wonderful
to speak with, learn from, and work with.

The financial aspects of starting a company now are a world easier. Without
diving into detail, its a cake walk now. I don't starve. I know to expect
losses on some ideas. I've had enough failures and some successes to know that
sometimes ideas and companies fail, and sometimes they succeed.

In summary, your point is well taken. It's definitely different.

~~~
Edmond
Interesting problem you are tackling, incidentally we are sort of trying to
address a similar problem (simplified web development) at Crudzilla Software
(www.crudzilla.com).

I am guessing you guys are in heavy development? because I didn't see how you
go from using spreadsheets to using your solution (at least from the code
samples). I am guessing people who use spreadsheets to build "apps" aren't
typically in a position (skill-wise) to use JavaScript to do anything
sophisticated.

~~~
akbar501
> I didn't see how you go from using spreadsheets to using your solution (at
> least from the code samples)

Sorry about that. The video is for an older MVP. I pushed the product live
last week before attending NodeDay, so I really need to update the video.

The specs are actually written using a small JavaScript file which is then
serialized to JSON, which is used to generate the JavaScript.

The best way to experience Exponetial.io is via:

npm install -g exponential

Then just create a login on www.exponential.io and you're ready to go.

If you don't have Node installed, then installation instructions for Mac,
Windows and Linux can be found at:

[http://exponential.io/docs](http://exponential.io/docs)

Site note: We're definitely early alpha. So Exponential.io as it stands now is
for early adopters who are ok with giving feedback to drive product features.
Our target is to hit beta by April 30.

~~~
Edmond
ok, that makes sense.

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Xdes
How much does YC cost to attend (like boarding, food, transportation, social
events)? Would those who attends likely come from a well off background?

~~~
outericky
All those things are subjective to where you want to live, what you want to
eat and what you want to do.

The events YC provides are free. Depending on where you live your rent will
obviously vary (you can pay $5000/month for an SF apt, or you can share a
place in Mountain View for $600/month).

Like Zac said... the $$ invested should more than cover your expenses for the
3 months. Of course, that money is for kicking off your company - not fine
dining.

~~~
mbesto
The guys over at [http://startuphouse.com/](http://startuphouse.com/) have
short term stay options in the heart of SF (It's not publically stated, yet,
but I think ~$35/night, so $1k/month). Might be a good option for people doing
YC for a summer and want to keep things extra lean.

~~~
argumentum
It saves a lot of time and stress to stay near YC in the south bay for the
duration of the program (mountain view, sunnyvale, palo alto etc). Living in
SF means you waste at least 2 hours every trip down to yc (usually 3 times a
week or so).

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johnpt
"There is only so much you can do on Castro Street."

That is so true. You only have houses and more houses, nothing to do other
than work 24/7.

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lukasm
Do founders from Europe or other places have to come back? What if company is
ramen profitable or profitable?

~~~
arg01
Depends on your visa. I ANAL etc, just spent a bit of time a while ago looking
at the visa situation. Basically you will probably get away with a B-1 visa
for your three month run very simply (electronic registration online and
~$15). It's a bit questionable as the work your doing could technically get
you in hot water though deal signing and seminars are fine.

After those three months you will have to leave, you can come back on the same
type of visa (though it is more likely you are breaching it) but you'll likely
be asked more serious questions and if a border agent doesn't like you then
you could be out of luck and barred from re-entry.

One of the key things to remember is the penalties for getting caught breaking
any visa conditions could essentially get you barred from reentry for life.

So after that first three months you'll probably want a visa that line up with
the fact that you're now effectively working in the US.

H-1B, which will require your startup to be up and running and look reputable
and they are in short supply.

O, which will require you to show your a respected top of your field type
person (i.e. articles written about you, speaking engagements).

E-1, your company must be non-us (which isn't ideal for YC) and a substantial
volume (and over 50% of the international trade) of trade must occur in the
US.

E-2, 50%+ of the business must be owned by investors in your country (you and
your co-founders). Possibly your best bet but you'll need a substantial amount
of your wealth (cash,IP (which might effect how you work for your company to
set up IP transfer which might not be agreeable with other investors))
committed to the business (100K+) in a non-revocable fashion. Also if the
business fails your visa is no longer valid. Risky but probably the most
achievable in terms of startups (with regards to getting back in the country
doing it quickly and with a high degree of certainty).

L-1 this will require you to have an office in your own country as well,
you'll effectively transfer yourself between the two offices. Keep in mind
that immigration aren't robots and you'll need to show your not just playing a
shell game.

If your canadian(mexican too I believe) TN, basically with an offer of
employment from a US company you can work there for 3 years. They'll need
supporting details and you'd do well to have the company at a point were you
can technically get fired to be credible (i.e. board of directors/you don't
own 51% of the company).

Edit: Also visas have intent. i.e. Plan to immigrate or not. If you have a
visa with no intent to immigrate and you look like you're planning to
immigrate then you can be found to have broken your visa conditions and barred
reentry/kicked out. So if you grab a work visa that does not have intent to
stay then apply for a visa that only has intent to stay your current visa can
be invalidated, you may have to wait until your current visa expire before
applying for a more appropriate one.

The go to advice is find an imigration lawyer, they'll have a better idea than
you or me on how to set this up.

There are also more options that may open up as your business grows but if
you're at the point of considering them you are at the point were you'll have
the resources and responsibility to get lawyers to do the majority of the leg
work finding/explaining your options.

There may be better news on the horizon:

[http://startupvisa.com/](http://startupvisa.com/)

~~~
lukasm
This seems like an awful distraction.

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TheMakeA
Awesome post. Thanks Zac!

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iterable
Awesome Zac

