Frequently Asked Questions from YC Applicants(blog.ycombinator.com)
blog.ycombinator.com
Frequently Asked Questions from YC Applicants
https://blog.ycombinator.com/frequently-asked-questions-from-yc-applicants/
5 comments
Yes, we absolutely fund companies at the idea stage, and often companies will pivot mid-batch -- in fact, one of our fastest growing startups from last year did exactly that.
One of the things I hear most often from our founders is that they accomplished more in their 3 months at YC than they did in the entire year before. Also, keep in mind that press is selective, and some companies wait years before publically launching as a YC company.
One of the things I hear most often from our founders is that they accomplished more in their 3 months at YC than they did in the entire year before. Also, keep in mind that press is selective, and some companies wait years before publically launching as a YC company.
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pb. That’s “new”. Congrats.
I think they only fund companies at the idea stage if a partner is enamored with it and/or the founding team is amazing. Otherwise they'll glimpse at your submission, see no traction and dismiss you.
I was very disappointed when my last submission was rejected without them even clicking on the demo link. I remain a believer in the idea but I have to put food on the table so it's on the backburner for now :(
I was very disappointed when my last submission was rejected without them even clicking on the demo link. I remain a believer in the idea but I have to put food on the table so it's on the backburner for now :(
It was posted March 19, 2018, no?
You're right. I had seen similar FAQs in previous years and thought this was a repost
Very interesting. Here are some random questions I personally have after operating a company in Europe for 3 years and planning to move the business to USA.
- Do I need to document every single expense with invoices similar to vat?
- What kind of expenses I can write off to my business? Apartment, house, car lease?
- What kind of salary to founders pay themselves?
- Do you hire yourself at the company or only pay yourself dividends as a salary? That's a popular method in Poland for founders to lower their income tax
- What's a popular visa used for this? I am looking at L1 but I am not sure how the connection between companies is established
- How demanding are the investors? If growth is slower than expected are there problems?
I would actually be happy to pay someone to get answers. But not sure who. A lawyer seems overkill for some of the basic questions.
- Do I need to document every single expense with invoices similar to vat?
- What kind of expenses I can write off to my business? Apartment, house, car lease?
- What kind of salary to founders pay themselves?
- Do you hire yourself at the company or only pay yourself dividends as a salary? That's a popular method in Poland for founders to lower their income tax
- What's a popular visa used for this? I am looking at L1 but I am not sure how the connection between companies is established
- How demanding are the investors? If growth is slower than expected are there problems?
I would actually be happy to pay someone to get answers. But not sure who. A lawyer seems overkill for some of the basic questions.
- Do I need to document every single expense with invoices similar to vat?
Not at all.
- What kind of expenses I can write off to my business? Apartment, house, car lease?
This is determined by US tax law, not YC. Generally part of your rent can be expensed if you are working out of your house or apartment.
- What kind of salary to founders pay themselves?
Usually founders pay themselves initially a salary that is below market for what they could be making at an established company, but enough to live on. Once their company reaches a certain level of success, they raise their salary to a market level.
- Do you hire yourself at the company or only pay yourself dividends as a salary? That's a popular method in Poland for founders to lower their income tax
You hire yourself.
- What's a popular visa used for this? I am looking at L1 but I am not sure how the connection between companies is established
During YC most founders stay on a visitor visa. After YC, most founders choose to get an O1.
- How demanding are the investors? If growth is slower than expected are there problems?
Not from YC or from typical silicon valley seed investors.
Not at all.
- What kind of expenses I can write off to my business? Apartment, house, car lease?
This is determined by US tax law, not YC. Generally part of your rent can be expensed if you are working out of your house or apartment.
- What kind of salary to founders pay themselves?
Usually founders pay themselves initially a salary that is below market for what they could be making at an established company, but enough to live on. Once their company reaches a certain level of success, they raise their salary to a market level.
- Do you hire yourself at the company or only pay yourself dividends as a salary? That's a popular method in Poland for founders to lower their income tax
You hire yourself.
- What's a popular visa used for this? I am looking at L1 but I am not sure how the connection between companies is established
During YC most founders stay on a visitor visa. After YC, most founders choose to get an O1.
- How demanding are the investors? If growth is slower than expected are there problems?
Not from YC or from typical silicon valley seed investors.
They pay the investment into your company, you pay out what you need. They don't monitor expenses etc.
Visa wise most people I know travel on an ESTA (visa waiver, 3 months) or get a B1 if needing to stay for longer than 3 months.
Visa wise most people I know travel on an ESTA (visa waiver, 3 months) or get a B1 if needing to stay for longer than 3 months.
After running a US/Europe/China based startup for 4-5 years I’d be happy to answer your questions for free (not on my phone though). Feel free to email me at my handle in google’s excellent email service and I’ll do my best when I’m back at the laptop.
how does it make sense for a company with 20m/yr revenues (messagebird) to give away the standard YC equity cut? did they strike a special deal? this is the first i’ve ever read of a company as late stage as this enter YC. sorry in advance if the messagebird story is well known and i’m a dodo
This is a good question. Here are a few typical reasons why later-stage companies join YC.
1) Companies that are in international markets and want to launch in the US. YC can provide a great platform for this.
2) Companies that sell services to startups (i.e., devtools) and can make use of YC's network to get customers faster.
3) Companies that have bootstrapped thus far but now want to raise a larger round from investors and want help doing so.
4) Companies whose business is at a substantial size but not growing quickly, and want to grow faster.
5) Companies that want to make a major business change, and want help with doing that. We've had companies pivoting from hardware to software, from a service company to a product company and more.
1) Companies that are in international markets and want to launch in the US. YC can provide a great platform for this.
2) Companies that sell services to startups (i.e., devtools) and can make use of YC's network to get customers faster.
3) Companies that have bootstrapped thus far but now want to raise a larger round from investors and want help doing so.
4) Companies whose business is at a substantial size but not growing quickly, and want to grow faster.
5) Companies that want to make a major business change, and want help with doing that. We've had companies pivoting from hardware to software, from a service company to a product company and more.
I'm not familiar with the messagebird story but there have been other later stage companies in YC before. For example, Quora entered YC when worth $900 million. https://techcrunch.com/2014/05/11/quora-y-combinator/
TIL. thanks for the followup.
what in the world is the point of that
You can read about it here: https://news.ycombinator.com/item?id=7723278
selected from one of the replies - this seems to be a better synopsis from the CEO himself. https://www.quora.com/Quora-company/Why-did-Quora-join-the-2...
>There are a bunch of reasons why it's valuable for Quora to be a YC company:
>We'll have Sam and all the other partners to help us.
>We get to be part of the YC community / alumni network of founders.
>We get access to all the resources of YC.
>We were raising money anyway, so there was no overhead in letting YC participate - this ends up the same for us as if we had just raised slightly more money from Tiger. And independent of the benefits to Quora, I think it will be fun personally to participate in some of the YC events. I hope my perspective can help some of the other companies.
>There are a bunch of reasons why it's valuable for Quora to be a YC company:
>We'll have Sam and all the other partners to help us.
>We get to be part of the YC community / alumni network of founders.
>We get access to all the resources of YC.
>We were raising money anyway, so there was no overhead in letting YC participate - this ends up the same for us as if we had just raised slightly more money from Tiger. And independent of the benefits to Quora, I think it will be fun personally to participate in some of the YC events. I hope my perspective can help some of the other companies.
I think in some cases, people negotiated a different deal, but I've also read of some applicants who knew they were giving up a lot, but banked on YC still being a real focusing lens for their business regardless.
How much equity is given out?
IIRC, YC use to take 6% for $100k. The link above says average now is $1m is raised from demo days.
Is that $1m for 6% or some higher equity percentage?
IIRC, YC use to take 6% for $100k. The link above says average now is $1m is raised from demo days.
Is that $1m for 6% or some higher equity percentage?
You're confusing two different transactions. The standard initial deal offerred to YC acceptees is $120k for 7%. Money raised at demo day, at the end of the 3-month program, is from other investors — whomever you can manage to interest — and on distinct terms negotiated with those investors at the time.
It's been 120k @ 7% for years now, I can't imagine that they've changed it.
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Just a request, please add "if I get selected by YC, do I have to reincorporate in the US, or will YC invest in an internationally incorporated company"
It is one of the most frequently asked questions by founders of India based companies as well as existing investors of India-based companies.
It is one of the most frequently asked questions by founders of India based companies as well as existing investors of India-based companies.
In particular, is the following still true?
> Q: Can you apply to YC with just an idea?
> Yes. We accept companies at a wide range of stages into the batch. Cruise, for example, had been working on their idea for just two weeks when they applied to YC.
and
> Q: Can you apply if you haven’t launched?
> Yes. Fewer than half of the companies we fund have launched before they apply.
Looking at the list of YC companies in the recent batch, it seems like many of those companies have significant traction by demo day, significantly more so than YC companies in batches from a few years ago. Obviously, there are many factors that may contribute to this:
1) Advances in development tools as well as SaaS for startups: e.g. Stripe, Stripe Atlas, Clerky, etc.
2) YC's brand name / perceived value has gone up + YC's deliberate outreach efforts. This could mean more and better companies are applying to YC so the bar has gone up.
But even controlling for those factors, it seems like many of the current companies are still further along by demo day compared to previous batches. Are there any examples of YC W18 companies that applied pre-traction or at the idea stage?
I guess the more common question than
> Q: Is YC just for early stage companies?
is probably
> Q: Is YC just for companies that have already found product market fit / have shown traction?