One, they do a better job than many investment firms at teaching some basics about start-ups. In that way, I think they encourage a lot of people to try who might not otherwise have tried. People often like to impress their teachers.
Two, as angel / early-stage investors go, YC is the closest thing there is to a top-tier firm. We don't know much about their financials but we do know their first big raise came from Sequoia, itself a top-tier firm. Top-tier funding comes with perks. You get YC's participation and connections. You get to say you got money from YC. $N from YC is worth a lot more than $N from your uncle.
Finally, for many, a YC interview will be their first big pitch and so there is a damaged goods concern: if YC turns you down, your odds with others are diminished. (That's not exclusive to YC: if X turns you down your future odds are diminished, for many values of X.)
Being turned down by YC doesn't mean that you are at the bottom of the pit. I'm sure there are many good firms they would pass on for reasons that say nothing bad at all about the firm. It is, however, a big obstacle you'll need to get around.
Raising money especially from VC works in a strange fashion. As in medical practice a doctor believes other doctor. Similary VC firms believer or trust previous entreprenuers whether its a good idea or bad idea. I am not saying YC idea is bad. PG is a very smart individual who succesfully sold his company to Yahoo (I have lot of respect for him). I am talking in general.
If you see all the CEO's get shuffled around even if they are bad. Similary all the previous succesfull founders and enterprenuers get their funding from VC's easily. You cannot pin on a single point that they got 2 million funding from a top notch VC firm, it should be good idea. Rather I will say Sequoia trusted PG easily then you or me because he already proved himself.
Heh. Suppose a CEO pretty much single-handedly runs a company into the ground and ensures its failure shortly after he leaves - but he also wins the investors a tidy exit. Is he a good CEO? :-)
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I don't have that sense, rajeshamara.
YC seems important to me for a few reasons:
One, they do a better job than many investment firms at teaching some basics about start-ups. In that way, I think they encourage a lot of people to try who might not otherwise have tried. People often like to impress their teachers.
Two, as angel / early-stage investors go, YC is the closest thing there is to a top-tier firm. We don't know much about their financials but we do know their first big raise came from Sequoia, itself a top-tier firm. Top-tier funding comes with perks. You get YC's participation and connections. You get to say you got money from YC. $N from YC is worth a lot more than $N from your uncle.
Finally, for many, a YC interview will be their first big pitch and so there is a damaged goods concern: if YC turns you down, your odds with others are diminished. (That's not exclusive to YC: if X turns you down your future odds are diminished, for many values of X.)
Being turned down by YC doesn't mean that you are at the bottom of the pit. I'm sure there are many good firms they would pass on for reasons that say nothing bad at all about the firm. It is, however, a big obstacle you'll need to get around.
-t
Raising money especially from VC works in a strange fashion. As in medical practice a doctor believes other doctor. Similary VC firms believer or trust previous entreprenuers whether its a good idea or bad idea. I am not saying YC idea is bad. PG is a very smart individual who succesfully sold his company to Yahoo (I have lot of respect for him). I am talking in general. If you see all the CEO's get shuffled around even if they are bad. Similary all the previous succesfull founders and enterprenuers get their funding from VC's easily. You cannot pin on a single point that they got 2 million funding from a top notch VC firm, it should be good idea. Rather I will say Sequoia trusted PG easily then you or me because he already proved himself.
Heh. Suppose a CEO pretty much single-handedly runs a company into the ground and ensures its failure shortly after he leaves - but he also wins the investors a tidy exit. Is he a good CEO? :-)
-t