
Your company is not “too far along” for YC - katm
https://medium.com/@jdotjdotf/your-company-is-not-too-far-along-for-yc-4183344adbc
======
hacknat
This article is rather thin on numbers or tangible benefits that actually
developed because of joining YC as a "later stage" company. I'm not saying
there isn't an argument to be made that joining YC late is a good thing, I
just don't think this essay does that.

Descriptions of how YC is more pleasant as a late-stage company are not
surprising. Of course it would be, but did YOU derive that much benefit that
you couldn't have achieved on your own?

Could the team not have derived the same benefit by simply holding up for 3
months on their own, and getting their investors/board to be actively involved
during that time as a sounding board?

The only real benefit I see being expounded is the connections YC offers for
securing a series A. However, I'm skeptical that a solid business with pre-
existing good connections (via their current investors and board) couldn't
secure a reasonable series A without sacrificing 7% of their company. Simple
arithmetic dictates that YC's value-prop needs to be amazing to justify
sacrificing 7% in exchange for a more optimal series A.

~~~
tlb
We'd love to make a more accurate measure of benefits, even if just for our
own use in optimizing the program. What would you suggest?

~~~
wtvanhest
The only metric that really matters is growth. Did campus jobs increase their
growth rate during YC and maintain the trajectory after YC?

What were the two MoM growth rates?

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kzhahou
Possibly slight off-topic grumbling... I automatically disengage when reading
a post where the opening paragraph is just a high-five killing-it startup
pitch. I understand we all gotta hustle, but it seems like the majority of
posts by startups are just done for recruiting or to call attention to
themselves. I click the links to get some good information, but wind up
feeling like I'm being sold a vacation time-share (with the opportunity to
work at the startup! :-)

> Applications for YC’s Winter 2016 batch are closing soon, and that has the
> team at WayUp (formerly Campus Job) feeling pretty nostalgic. During YC, the
> company grew faster than ever, we hit the crazy goals we set for ourselves,
> and we closed our Series A around Demo Day, bringing our total fundraising
> to $9.1M. And on top of all the traction, our team of 8 had a ton of fun.

~~~
_sentient
Most startups begin life in total obscurity and only transcend that nameless
wasteland through sheer cheerleading force. I get that it can feel a little
rah-rah, but as a founder that function is firmly on your list of jobs.

It would be strange to read a founder-penned startup missive that didn't toot
a few horns.

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banachtarski
Meh, I disagree. 7% of equity can net some top talent, and I don't think any
VC can claim to match what 7% worth of talent can bring. This is of course,
only true if money isn't an issue, and for a later stage company, money won't
be an issue. Instead, equity is the scarcer resource, and selling 7% of it for
a measly 120k should be an absolute negative signal to future investors.

~~~
pjlegato
> for a measly 120k

Spoken like someone who has always had easy access to 120k, which is
unfortunately not the case for the vast majority of people.

~~~
bmm6o
It's not that $120K is nothing, it's that they already had $1M in funding,
which they must have gotten way more cheaply than the YC money. If you just
value the company at the amount of money in the bank, the 7% stake they traded
to YC is worth $70K today (of course it's more complicated than that - I'm
just spitballing numbers).

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7Figures2Commas
> Soon after launch, we thought we were “doing great” — we’d raised $1M in VC
> funding pre-launch, we had a team of 5, we had ~$12k/month in revenue (with
> a 100% take-rate), and we had tens of thousands of users.

In the context of the post's headline, I expected to see more than a five
person company with about enough monthly revenue to maybe cover payroll for a
mid-level developer in the Bay Area.

This really doesn't seem "too far along" for anything early-stage.

------
lquist
I get that YC makes sense for larger companies, but also am curious as to why
YC is so inflexible on the terms of the investment. Capital is obviously not a
constraint for YC, so why doesn't the fund just put up more money for the 7%
for larger companies? One guess I have is that it makes it introduces friction
and makes YC much less scalable, but also would attract more large startups.

~~~
tptacek
One reason for this is that they're working with tens of companies per batch,
and the way the application/interview process works doesn't give them a lot of
time to wait for people to accept. If you make the deal negotiable, people
will try to negotiate.

Given that this is the. major. problem. with raising money from institutional
venture capitalists, it's not hard to see why someone trying to do lightweight
capital for new companies would want to avoid that problem.

Remember also: they're doing two batches per year, the batch lasts 3 months,
there's a _lot_ of stuff that happens right after the batch, and the whole
application/acceptance process is condensed down to a month as it is. There's
not a lot of flexibility available in this calendar even as it is.

(Also: at least in earlier batches, there were IIRC companies that _did_
negotiate the % YC was buying for their money).

~~~
markolschesky
Agreed. I was previously a founder with a company in an incubator in which we
were able to negotiate the terms of the deal. One founder spent 3 months
basically trying to negotiate the terms and at the end we didn't take that
funding and it was like lighting 3 months of time of fire on equity
discussions that didn't matter if we weren't successful. If you only have 2-3
founders, it's a major distraction/waste of time up front when you really need
to be taking advantages of whatever the incubator provides (connections,
mentorship, pilots, etc.) and executing. If there are no advantages, don't
join the incubator. If you don't want to take VC funding, you probably
shouldn't join an incubator/accelerator since VC connections are usually the
few consistent things the incubator can provide.

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simonebrunozzi
I don't think it's wise to give YC the "standard" 7% when you are ahead of
most other applicants. I don't know if they did it or not, but I would have
negotiated the % before accepting.

~~~
kansface
YC mostly never negotiates, and you'd be crazy to turn them down when they
refuse.

~~~
banachtarski
This... is crazy talk. Is HN filled with YC worshipers now?

------
jdotjdot
Author of the post and cofounder of WayUp/Campus Job here--happy to answer any
questions that anyone might have!

~~~
soneca
Hi! I'm part of a 17 people team of a company that is applying to YC. And as
we are based outside the US it is prohibitive to move all team to San
Francisco.

I fully support the 3 founders going to YC, while the rest of us stay here
working hard and communicating remotely.

What do you think? It is viable/worthy for the 3 founders to do YC with a
14-people remote team?

~~~
jdotjdot
Hiya!

Though I don't know your company, I do believe it is viable for the 3 founders
to do YC with the rest of your team remote. Even in our batch, I can think of
at least one company that was in a similar situation to what you're
describing, and they got a lot out of YC.

It is still valuable even if the entire team isn't able to be in California.
It comes down to the founders and the team committing to regular and open
communication, making sure that the founders and team stay in touch and that
the founders are able to share as much of what they are learning as possible
with the team. Keep in mind, there are many companies that operate entirely
remotely--Stack Overflow and Automattic, to name a couple. All it takes for
your company to succeed working remotely is to build a good remote culture.[1]
Your company, and therefore you and the rest of your team, will still get
value out of YC from everything the founders will learn and can share with
you, as well as from the YC network, mentoring, community, and branding that
will stay with the company for the rest of its existence.

We were lucky that we were able to be able to bring our whole team--but that
doesn't mean it's a prerequisite. Many companies can't bring their whole
teams, for all kinds of different but valid reasons.

[1]: [http://www.inc.com/aaron-ohearn/the-right-way-to-build-a-
rem...](http://www.inc.com/aaron-ohearn/the-right-way-to-build-a-remote-
culture.html)

------
kloncks
Does YC actually take 7% regardless of company stage?

There's no way YC owns 7% of Quora, for example, and I thought they would
follow a similar model to attract larger companies?

~~~
ceejayoz
[http://techcrunch.com/2014/05/11/quora-y-
combinator/](http://techcrunch.com/2014/05/11/quora-y-combinator/)

> Quora CEO Adam D’Angelo tells me “YC invested an amount that was similar to
> their standard $120k. They invested as part of the Tiger round.” That $80
> million round valued Quora at $900 million, so the startup only traded away
> approximately 0.013%.

------
rasz_pl
Sorry, but this sounded like my brainwashed aunt praising Amway.

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puppetmaster3
Once someone from YC invites me, I too will apply.

~~~
pavornyoh
Why would you wait for an invitation though? The invite may never come.

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a3voices
Would YC have demanded 7% from Facebook before it got huge?

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jonathaneunice
Words of experience.

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logicallee
This advice is obviously correct, but it is kind of like stating that you're
never too rich to apply to Harvard.

What I mean is that obviously YC is a structured program that is very, very
well-connected, and unlocks vast, unlimited potential for any company. Anyone
given this opportunity gets huge benefits from it, even the people - companies
- who are starting with the most advantages.

~~~
jdotjdot
Yes, but there is still a cost to doing YC--7% is a lot for many founders to
stomach, especially if you already have some traction and have already raised.
Not to mention it's much harder to move a full team of 8 people to California
than a small team of 2-3 founders.

Companies in that position, like we were, often ask if it's worth it. I wrote
this article to answer that question: Yes, it's still worth it.

~~~
logicallee
I rather think you miss my point. For every company at your stage who thinks
it might be a bad round, ten are dying to get in - there are few to no ways to
make as large and fast connections. I suppose it depends on company's long-
term plans.

