Frequently Asked Questions What Happens at Y Combinator? This. How can we get funding for our startup? Apply online for our next funding cycle. We fund startups twice a year. We've already been working on our startup for a while. Is Y Combinator appropriate for us? We've funded a lot of startups like that. In fact, we especially like them. We can probably help any startup that hasn't already raised a series A round from VCs. Don't incorporate, though, if you can avoid it. It's easier to start with our paperwork than to transfer an existing LLC or S-Corp to a C-Corp. We've already taken some funding. Can we still apply? Sure. We've funded many startups that have. We don't want funding, but will you give us advice? Unfortunately we can't. We've invested in so many companies that helping them takes up all our time. But we've collected some general advice in our library. Can you recommend other investors who might be interested in our idea? When you refer someone to an investor, you're also recommending them, and you can't recommend people you don't know. If you're looking for investors, your best bet is to find friends of friends who've started or worked for startups, and ask for intros to their investors. How much do you invest? Usually $11,000 + $3000 per founder. So $17,000 for two founders, $20,000 for three or more. Occasionally we invest more. The goal is usually to give you enough money to build an impressive prototype or version 1, which you can then use to get further funding. What does Y Combinator get out of this? Stock in the startup, from 2-10% of it. Usually 6 or 7%. We don't really need the money. Does it still make sense to apply? Half (maybe more) of the startups we fund don't need the money. And in fact the money is a only a small part of what YC does. The money we invest works more like financial aid in college: it ensures that the people who do need money can cover their living expenses while YC is happening. What if we're doing something expensive? We'll still fund you, but instead of trying to build something launchable in three months, the goal becomes to build an impressive proof of concept to take to later stage investors to raise more money. Do we need to write a business plan?
Not for us. We make funding decisions based on our
Can a single person apply for funding?
Yes, but the odds of being accepted are lower. A startup is
too much work for one person.
I have a great idea for a startup, but
I'm not technical. Will you still fund me? Can you help me
find programmers to implement my idea?
We'll consider funding you, but your chances are about ten times
better if you find yourself a technical cofounder.
It's much better if you find one yourself through friends of
friends than if we introduce you to someone. Teams thrown
together for the purpose of starting a startup usually fall
apart under stress. You need some kind of personal connection.
Can we do it without moving to where you
are?
Sorry, no. We tried this once, and by Demo Day that startup
was way behind the rest. What we do, we have to do
in person. We would not be doing a startup
a favor by not making them move.
You can leave one founder at home, but the rest, including the
CEO, have to live in the Bay Area during the 3 month funding cycle.
Do we have to start a company in the US for you
to invest in us?
Yes, but that's usually not a problem. It's easy for foreign nationals
to start US companies (much easier than remaining here physically), and
investors and acquirers prefer them.
Do we have to be US citizens?
No, as long as you can get here for at least three months. We've funded
many startups founded by non-citizens.
Can you get us visas?
No, sorry, we don't do that. You'll have to figure out
visas for yourself. If you know people from previous YC-funded
companies who came from outside the US, we suggest you ask them
for advice. They understand the options better than we do.
Our group has two ideas. Can we submit two
applications?
Ok. Just submit them from the YC accounts of different founders.
Do you only fund startups that write software?
We'll consider startups in any field, but odds are better for
startups writing software, because that's what we understand.
Will you sign an NDA? How do I know you won't
steal my idea?
No, we won't sign an NDA. No venture firm would at this stage. The
informal commitment to secrecy on our application form is
more than any VC would make.
In this connection you may want to read the first section of
How
to Start a Startup on the value of mere ideas.
Will you fund multiple startups working on the same idea?
Yes. If you fund as many companies as we do it's unavoidable you'll
end up with some overlap. Even if you tried not to accept competing
companies, you'd still get overlap because startups' ideas morph so much.
The way we deal with it is that when two startups are working on
related stuff, we don't talk to one about what the other's doing.
In practice it has not turned out to be a problem, because most
big markets have room for several slightly different solutions, and
it's unlikely that two startups would do precisely the same thing.
Why didn't you accept our application?
Strange as it may sound, the better your application was,
the less likely there is to be an answer to
this question. So don't take it personally.
The fact is, even the best investors are quite bad at picking winners.
VC firms consider themselves to be doing well if 4 out of 10 companies
they fund succeed.
Is Y Combinator an incubator?
No. The defining quality of incubators seems to be that companies
work out of the investor's space. We think that's a bad idea; it
makes founders feel like employees.
What's the average age of people you fund?
About 26. A lot of people think it's younger because the press especially
like to write about young founders.
Will you help us set up something like Y Combinator
in our town?
There already is a Y Combinator in your town: Y Combinator.
The seed funding business is national, not regional.
Will you help us set up something like Y Combinator
in our country?
Actually, the seed funding business may even be international.
We'll see. But no, unfortunately, we can't give advice
to people who want to set up new things modelled on Y Combinator.
The startups we've funded get first claim on our time; next come
press and investors; and after those there is no time left.
Why did you choose the name "Y Combinator?"
The Y combinator is one of the coolest ideas in computer science.
It's also a metaphor for what we do. It's a program that runs
programs; we're a company that helps start companies.
Are you hiring?
We aren't, but companies
we've funded are.
Are you looking for investors?
We're not looking for investors in Y Combinator itself, but you're
welcome to invest in the companies we fund. We have
Demo Days twice a year (in March and August) at which the
latest batch of startups present to investors.
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