I would open it up after interviews so that those who got interviews but don't get accepted can participate.
Accomodate all groups who want to participate and don't mess with the financing at this point. The financing talk gives me kind of a "no" feeling.
Have your weekly dinners and get speakers.
Have a web site where YCR startups can promote their projects.
Schedule and hold a Demo Day. I bet you'd be able to get a few investors to drop by or else watch the videos that will go up on the YCR web site.
By banding together, I think everyone will have a really productive 3 months, get to know alot of like-minded individuals, and have a decent shot at attracting some investor interest.
I live in Ireland and wouldn't be able to participate but I think it's a great idea.
How about "Peer-to-peer Startups"?
I can't find the link but it basically said the accelerator bubble is going to happen when the secondary groups get the 'B' talent startups, and then the next groups get the 'C' talent...
While I have no idea about the quality of YC Reject groups, this does kinda have that same feel to it.
That said, yc reject groups probably will suffer from a smaller talent pool (since they are indeed option B), and from a lack of experienced people to make a reasonably good selection.
The only people who lose out are the investors, who have plenty of chance to evaluate their investment before making a decision (I imagine), so they can only blame themselves for making a bad investment.
Admittedly I was a little intimidated by a few questions on the application and my video sucked. I've been in real estate for the last few years and am now getting back into software development. Being in real estate though is what gives me tremendous insight into the niche market I'm targeting with my startup. It's impossible to know for sure why I wasn't invited for an interview considering they don't give any feedback. I'd assume they were just more interested in other founders/projects. That doesn't make me a "B" grade startup, I just don't fit the YC criteria (at least right now).
Point being that it benefits YC to bet on projects with huge upside potential. Fewer big hits compensates for massive misses. Isn't that the same strategy that nearly all VC's use?
All in all I'm learning as I go and moving forward regardlessly.
I applied to YC knowing that I wasn't a good fit. Going through the application process helped me hone my message and also helped me to better organize my priorities.
It's like writing a business plan - you may never really use it (you may not be accepted into YC) but going through the exercise has real benefit.
I'm actually inclined to believe it's the latter considering the supply and demand. The demand for accelerators is extremely high and the supply of open spots is very low. I think current accelerators are just scratching the surface with respect to promising startups which is why we're seeing many more sprout up.
Don't lose sight of the real value in this for a group trying to create their own startup - the mentorship, fraternity, alumni network, initial amount of funding and then finally the demo day presentations which will result in a lot of visibility. Not to mention, at this point in time, the YC brand stamp. I know you have to start somewhere, but I don't think starting with investors is the right move. It won't be difficult to find people willing to invest, as you've already experienced (they came to you). You need to start by trying to provide the startups with the things they can't get on their own - mentorship, fraternity, etc. I have gone through my own adventures of pitching my ideas to VCs, while being completely uneducated about it and green, and I can say it's not difficult to get money from them - so you will be able to get it when its required. At least for me, the money is not really the appeal of YC.
I think dclaysmith says it well here: http://news.ycombinator.com/item?id=2432040
"I got rejected from Harvard Law School. So I got a couple of my fellow applicants together and decided to study law together for 3 years, sans professors. We all just got 6 figure offers from the big firms on Wall Street."
So I think the 'sans professors' thing is a bit unfair.
I didn't mean to bash. I merely meant to accentuate how unique the situation/industry is.
If nothing else, the rejects (always) have force of numbers on their side.
He put so much effort and determination into this 'not-YC' that he probably would have been funded anyway
Being rejected from YC will probably end up being the best thing that has ever happen to him
The reason I posted this blog, is because I want to get candidate feedback. The money involved in YC is just a small (but helpful part) of what they do. Will teams that participate in this grassroots project want to give up 6% of their company? What are your thoughts?
If you're trying to monetize the idea and are asking for 6% of people's company then, sorry, you've got to be joking.
What do you offer for this 6%? Money, connections, knowledge?
If you're simply a coordinator bringing people together, I think asking for 6% is ridiculous and it makes me question your motivation for doing this.
Obviously, depending on how well the YC Reject guys filter the applicants, it may not matter who applies, if they select the best, and are proven to be good at the selection process.
Why would someone apply for a funding source that only offers to give a few thousand bucks for 6% but not apply for a funding source that offers to give a few thousand bucks, the best advisors for early stage software startups in the world, the best odds of being funded in the angel and series A stages and with remarkably good terms, the best odds of being covered in TechCrunch (100%, I believe, if you demo on demo day) and several other major tech media, and participation in the next "mafia" in Silicon Valley?
Obviously of the hundreds or thousands of companies that don't get accepted to YC, all of them can't be accepted to YC Reject either. No matter how much money they've lined up (the word "angel" was used, I believe to describe the funding source, so it is in the thousands or single digit millions), there's simply not enough money for it to be a money spigot that anyone can turn on, at will.
Basically, what I'm saying is, if the odds are slim in either case, the cost of applying to each is simply filling out an application, and the payout for YC is so much higher than for YC Reject, why would someone lie about applying to YC rather than actually applying (even if they don't have high expectations of getting in)? I just can't figure out a situation where that would ever make sense.
Now, I don't have a startup looking for funding, and if I did I wouldn't expect to get into either. But I'd expect to have a much better chance at getting into YCR than YC. As such, were I looking for a small amount of funding, I might look at YC and think "why bother, not a chance" and then see YCR and think "let's pretend I applied to YC, then I actually have a chance at this one!"
And sure, the cost of applying to each is just filling out an application, and so in future I (the hypothetical me that is in a startup) might apply to YC, knowing that the worst case scenario is I become eligible for YCR. But right now, even the time spent filling out an application is a waste of time if you don't think you can get accepted - but perhaps less likely to be a waste of time applying for YCR.
As to why people would want to lie to apply to YCR - a part of the reason for YCR, and for possible funding, is the PG quotes saying "we are always going to miss some of the best..." etc, and the idea that teams applying to YC, given they thought they might be good enough, they are more likely to be good than teams who thought they definitely wouldn't be good enough for YC. Without the link to YC, there would never be a funding offering based on a blog post saying "let's get a group of startups together to form a network of contacts etc.", after all.
"Will angels continue to invest their money in what essentially has become a meat market?"
The evidence seems to indicate that the answer is "yes".
"If I were to invest my money on a high-risk venture I'd like to get a little T.L.C."
Personally, if I were an investor, I'd rather get a little R.O.I.
I think alumni will always think the subsequent batches are too many.
Also, on a lighter note, will there now be a ycrejectrejects project/site?
I'd much rather read about an "independent, peer-based company building support group" or something like that.
Kudos to you for taking the initiative and doing what you need to do...and for siezing what could potentially be an amazing opportunity.
I hope it doesn't turn out to be a fad, and something sustainable can be built here.
See more here: http://news.ycombinator.com/item?id=2431712
Please don't get me wrong, I am not calling you a liar, but this is just healthy skepticism. If I were to ever go along with this I would need to see some written proof.
If you have actually done this you're doing a great service to a lot of people.