YCombinator Funding - How It Works
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- Опубликовано: 5 окт 2024
- I'm a YC founder - I should talk about it more. People kept asking about this so why not make a vid about it?
From SAFEs to MFNs to the "standard deal", there's a lot to understand. Hope this helps!
Thumbnail by Cbonilladev
Edit by Ph4se0ne
everyone always asks YCombinator but never HowCombinator 😔
Thank you for blessing this video with your awful puns, hope we get some good algo juice ❤️
just realized this video IS HowCombinator
Lol 😂
@@samuelgunterthe circle is complete.
This is great 😅
Thanks, this is great info.
Would also be interested in hearing more of their advice and your experience of “setting the company up for success”.
Lately, there have been a lot of discussions about whether Y Combinator is worth it. I crunched some numbers to model different scenarios and different start-up valuations to compare whether the YC's deal is any good and what the other options are.
In general, thinking about the 7% of the Y Combinator's Safe and whether it's worth it is the wrong mental model to start with. It’s like announcing winners and losers in a race immediately after the start and before anybody even runs half a distance. The thing is the 7% Safe is just Step 1 in the priced Seed round when YC’s shares convert-and there are 2 more steps that depend on the round valuation.
It’s not worth thinking about how big or small a share Y Combinator gets since there is also the mandatory stock option pool and a new VC's share. The main number to compare that’s important for founders is how big a share they are left with after the priced round is done.
Anyway, I modeled 3 scenarios (1: YC's Safe + VC Seed, 2: VC Seed Only, 3: VC Pre-Seed + Seed) with 6 different start-up valuations ($5M, $7M, $10M, $15M, $20M, and $25M) of the Seed round for each scenario to compare founders' share as a result.
Here is the detailed post for those interested in numbers: medium.com/p/f5d1befc4b58
I have no idea what ur talking about. What's seed?
Congrats on getting into YC man! I hope ping does great things.
Been dreaming to enter YC, great video to explain on it!!
Love your contents, man🙌.
Question: When is the ideal stage to apply for YC?
The thumbnail 🚀
this is an amazing and important video. thanks! :D
Great video, thumbnail is fiire!
Had to put the video in 0.85 speed to listen. Glad Theo did a rant about this. If this is one of your channels theo, thanks.
Thanks for the info, appreciated :)
great video!
As a SWE in the US, isn't $125k a small investment? It's less than an L4 base salary at Twitch, for example.
That’s kind of why the 375k exists, I think. Theo mentioned that YC realized 125 isn’t enough, so they added the 375k SAFE.
Also, Twitch is a HUGE company where getting paid 125k seems normal (i hope lol). YC invests in startups primarily, where people know they ain’t gonna make the big bucks lol
125k is a joke to even start with. They need to open with that 375k or just do the 500k
Hey Theo! Would love to chat about your YC application experience! We’re about to apply and getting founder advice is super important!
Looks a bit too good for them though.
YC ⭐️
Do they wire you $125K immediately upon acceptance and the other $375K after the YC program or do you get the full $500K upfront? Thanks.
Only 125k upfront
@@gmanfromdibloc2479 When do you get the other $375K, after demo day?
Are these post money Safes, considering the % ownership is fixed?
How does a regular dev/aspiring founder get to know all of this stuff Chief? My brain's fryingg😢
Overall the Y Combinator deal still pressures founders to raise money and grow as fast as possible. Otherwise, just shut down.
Theo, I know it is hard to ask someone else for a decision, but I'm starting a small project that I think it'll grow a lot and never experienced any type of investments. Do you think it would be better to work by my own so I can understand if I really need an investment or would it be better to have an investment and then use the budget to make it easier to grow?
Getting an investment is definitely gonna help you in some ways. You have money so you can burn through it for marketing, hiring people, and other stuff. This doesn’t mean that it’s absolutely necessary. I know founders who have taken 0 investment until they have been bringing in $50k per month in gross revenue. It helps you gauge whether the product actually is valuable in the market or not.
That being said, YC specifically, has and still invests in “idea stage” companies where there is no real MVP even.
If you think your product has potential, there’s no harm in trying out with YC, Antler, 500, whatever. It all depends on whether or not you’ll be able to bootstrap or not.
All this for only $500K?!
Exactly that's what I was gonna say...just for 500k ?!
Question: do they fund you upon acceptance or on demo day or sometime after?
From the YC site: The YC investment is not contingent on hitting any milestones, and we do not wait until the batch program starts to invest. The day a company is accepted to YC, we commit to investing our standard deal and begin the process to do so immediately.
Damm Theo it might over here dark mode pl😂see from Nigeria thanks for the info❤
Loved this video tho
What if you don't do any deals after part 2?
Do you still have to move out to the West Coast?
I'm a founder with a ton of family all around me with a mortgage in the cheapest part of the country, so the idea of moving out to the most expensive part of the country away from all of my family for an extended period of time isn't super attractive.
You literally need to move to San Francisco just for 3 months,
Sumer Batch (July-September) or
Winter Batch(January-March)
it's not like you are moving to Antartica.
what I don't know is whether do they wire you $125K immediately upon acceptance and the other $375K after the YC program or do you get the full $500K upfront?
Isn’t this a reupload? I swear I’ve seen this exact video before
It's a clip from one of his livestreams a few months ago, you might've been there or seen the vod. He's also talked about YC a bit, idk if he has a specific video about it, but this is not a reupload in the sense that this was uploaded before (outside of the livestream)
@@samuelgunter Ah, that’s very possible. I thought he uploads clips within the same week or so
I think it is a very messy review, it would have been better if you had prepared a little better.
But thanks anyway :-)
Miller Lisa Young Donna Jackson Christopher
omg even 7% is so high to just never see again. payment processors take like 5%, then hosting, then legal and accounting, then salary. no way i would give up that much to someone who didnt actually help make the product.
You don’t understand the value of YC when it comes to fundraising. If you have a successful business with no need to raise… then don’t do YC