Really? I don't think I understand how this follows.
Alternatives to YC include Sequoia, angels, other VCs, etc. and not just YC clones. It's an expensive source of money, and if the company isn't delivering a lot of extra value (which YC has consistently been shown to do, and none of the others, with the possible exception of TechStars, has shown that) it's probably a bad deal.
And, as for "would you go to a VC instead of Sequoia"...yes, but I wouldn't go to a VC that I have no knowledge of, and that has no track record. I'd accept money from a top ten VC (assuming reasonable terms and consonance of vision), but I'd rather build a company on its own revenues than take money from an investor I don't believe in, or I don't believe is capable of grokking our long term vision for the company.
That's a really valid point. One thing to note is that most of the clones are started by VCs or people with strong VC connections. In my book that's a pretty notable difference. Entrepreneurs and VCs seem to often look at businesses very differently, and this, in some ways, seems to be a way to just get a stupidly cheap slice out of a big pool of startups.
One thing to remember when looking at all of these things:
The value they give is not in the money. $10-20k is laughable in investment terms. In my opinion YC is more like a ready-made board of advisors than a seed investor. The question really boils down to, for all of these accelerators, "Are they good enough advisors to give up 5-ish percent of your equity for?"
I think YC's proven itself there. I'd be interested to see what some TechStars alums have to say.
The comparision maybe more like a top school like MIT to say something still very good like UIUC or UMich. Im pretty sure most applicants apply to both YC and Techstars, just like school if they dont "get into" thier first choice, they most probably might take second choice. I wouldn't dismiss these as clones. Techstars have shown pretty good track record so far(though thier sample size is small and if Im right thier entire first batch recieved some form of funding). I dont know about others, maybe something might come out since they just started and YC has been around for few years. As an entrepreneur defnitely community of other hackers matters, which no doubt YC wins, but still I wouldn't dismiss others as clones.
PS:I neither did YC nor Techstars, just my opinion
Honestly, has YC actually been shown to consistently add value? I thought the jury was out on that, until we get stats about success rates. Given how many companies they fund, how much time do they actually spend with each company? How do they scale the model without diluting experience?
Most VC's, even poor ones bank on 2/10 paying for the failures, otherwise they go out of business. Has YC provided > 20% success rate - I don't know, I'm asking? How does YC even define success?
Sequoia and YC do not have a monopoly on technology success, far from it. There are many thousands of excellent, proven technology investors around the world available to work with. Pretending your idea is better than all but the "top 10" is laughable really.
PS: Mentioning YC in the same sentence as Sequoia isn't really fair to Sequoia given their success.
And I was being concrete, but generic...I don't think one should take money from someone you can't trust to share your vision for your company. In our case, we're being extremely particular about what investors we talk to, and who we'd take money from (and, so far, we've opted not to accept any additional funding--we don't need it urgently, and we'd rather it be a perfect fit than a desperate cash-for-suffering deal). Of course, perhaps I shouldn't use the phrase "top ten"...there are certainly great VCs we haven't heard of yet. Sequoia wasn't always top dog (KP held that title for many years in the past, if I recall correctly), or even on the radar for most investors. I'm just saying it's really important to be careful who you allow onto your board.
I would never suggest taking money from someone who doesn't share your vision, I just know that Sequoia and YC don't have a monopoly on technology success. I especially find advice from serial entrepreneurs in tangible technology space useful - while they don't have the big exits that the early/lucky digital technology entrepreneurs have, they know "real" business better in my experience, and always have something useful to say.
Comments
Its like asking whether you would go to a VC instead of sequoia. Of course you would.
Really? I don't think I understand how this follows.
Alternatives to YC include Sequoia, angels, other VCs, etc. and not just YC clones. It's an expensive source of money, and if the company isn't delivering a lot of extra value (which YC has consistently been shown to do, and none of the others, with the possible exception of TechStars, has shown that) it's probably a bad deal.
And, as for "would you go to a VC instead of Sequoia"...yes, but I wouldn't go to a VC that I have no knowledge of, and that has no track record. I'd accept money from a top ten VC (assuming reasonable terms and consonance of vision), but I'd rather build a company on its own revenues than take money from an investor I don't believe in, or I don't believe is capable of grokking our long term vision for the company.
That's a really valid point. One thing to note is that most of the clones are started by VCs or people with strong VC connections. In my book that's a pretty notable difference. Entrepreneurs and VCs seem to often look at businesses very differently, and this, in some ways, seems to be a way to just get a stupidly cheap slice out of a big pool of startups.
One thing to remember when looking at all of these things:
The value they give is not in the money. $10-20k is laughable in investment terms. In my opinion YC is more like a ready-made board of advisors than a seed investor. The question really boils down to, for all of these accelerators, "Are they good enough advisors to give up 5-ish percent of your equity for?"
I think YC's proven itself there. I'd be interested to see what some TechStars alums have to say.
The comparision maybe more like a top school like MIT to say something still very good like UIUC or UMich. Im pretty sure most applicants apply to both YC and Techstars, just like school if they dont "get into" thier first choice, they most probably might take second choice. I wouldn't dismiss these as clones. Techstars have shown pretty good track record so far(though thier sample size is small and if Im right thier entire first batch recieved some form of funding). I dont know about others, maybe something might come out since they just started and YC has been around for few years. As an entrepreneur defnitely community of other hackers matters, which no doubt YC wins, but still I wouldn't dismiss others as clones.
PS:I neither did YC nor Techstars, just my opinion
Honestly, has YC actually been shown to consistently add value? I thought the jury was out on that, until we get stats about success rates. Given how many companies they fund, how much time do they actually spend with each company? How do they scale the model without diluting experience?
Most VC's, even poor ones bank on 2/10 paying for the failures, otherwise they go out of business. Has YC provided > 20% success rate - I don't know, I'm asking? How does YC even define success?
Sequoia and YC do not have a monopoly on technology success, far from it. There are many thousands of excellent, proven technology investors around the world available to work with. Pretending your idea is better than all but the "top 10" is laughable really.
PS: Mentioning YC in the same sentence as Sequoia isn't really fair to Sequoia given their success.
By the way, just checked out your profile and saw virtualmin - I wasn't bagging it, I was meaning "an idea" in an abstract sense.
And I was being concrete, but generic...I don't think one should take money from someone you can't trust to share your vision for your company. In our case, we're being extremely particular about what investors we talk to, and who we'd take money from (and, so far, we've opted not to accept any additional funding--we don't need it urgently, and we'd rather it be a perfect fit than a desperate cash-for-suffering deal). Of course, perhaps I shouldn't use the phrase "top ten"...there are certainly great VCs we haven't heard of yet. Sequoia wasn't always top dog (KP held that title for many years in the past, if I recall correctly), or even on the radar for most investors. I'm just saying it's really important to be careful who you allow onto your board.
I would never suggest taking money from someone who doesn't share your vision, I just know that Sequoia and YC don't have a monopoly on technology success. I especially find advice from serial entrepreneurs in tangible technology space useful - while they don't have the big exits that the early/lucky digital technology entrepreneurs have, they know "real" business better in my experience, and always have something useful to say.