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Thanks PG, applying to Y Combinator cost me a shot at my local startupfund

8 points by grkballer44 ↗ HN
After being turned down by a local startup fund in Canton, OH (which is being ran by a statewide accelerator program) I enjoyed the spirited 45 minute conversation I was having with the investment analyst who was in charge of turning down my application, and listening to his reasoning on why I was not even eligible to EVEN PITCH my concept to the local commission who decides who receives funding . Let me set the table for the story, I applied to the fund September 30, and was contacted by the analyst (who shall remain nameless), after having a brief talk about my idea, he told me to send in an executive statement. During this conversation I also told him I was applying to Ycombinator (which turned out to be a mistake lol). I had never made an executive statement b4, and after just finishing up my ycombinator application, I couldnt help but feel an executive statement for an early stage tech start up is a huge waste of time. But I still spent much more time then I could afford (law school full time/ as well as developing a company), because the $25,000 the fund was offering would be a welcome addition to our start ups financial situation (besides being funded solely by a poor graduate student). 3 weeks after sending the executive statement in as well as a follow up email trying to verify he had received my message, I had yet to receive any sort of reply. So I contacted the accelerators offices, and eventually was able to get in touch with the financial analyst over the phone. After not initially remembering who I was, and having to check to make sure he had recieved my emails (he did), and after briefly visiting my beta for the first time, he told me that my website was not at a point where it was elible to recieve funding. My idea failed for several reasons, which I would like to discuss more fully below.

1. I applied to Ycombinator- part of the start up funds conditioning on recieving investment is that the company must stay in Canton, OH for the next 10 years. My application to Ycombinator 3 month program showed that I wasn't dedicated to staying in the area, and was a major part of his reasoning on passing on my application to pitching to the start up commission. I found this entertaining on several levels, and apparently my points listed below couldn't convince him. 1. There aren't a lot of people who would question my dedication to my hometown. I have lived here my entire life, including while finishing my under grad degree at Mount Union University, and while pursuing my Law degree at The University of Akron, not to mention locating my start up here. 2. The odds of getting accepted to Ycombinator are between 1-3%, horrible odds no matter how you look at it, I'd consider anyone applying who places their start ups future on getting accepted a pipe dream. So I didn't, after my application I continued building my company and working on my product, business as usual. So I find it funny that a potential investor would take my APPLICATION to a program he knows to be a long shot, as a definitive signs that I would leave the area. If accepted to Ycombinator it would be a tough decision for me to make on whether or not I should relocate to the Valley full time, but this is a road I haven't crossed yet, and I'd appreciate if someone who understand the ycombinator process (he knew about the program, the analyst is originally from The Valley) would be able to understand this, and at the very least not throw my application to his program out the window just because I applied to another potential fund.

2. Uniqueness- according to him my idea wasnt unique enough. After outlining several ways in which my product was unique from the competition, and outlining areas where I believed our start up had a significant advantage. His reply was, whats to prevent one of you major competitors in the social media field from adopting your idea, and at this point I knew he had no idea what he was talking about. If my idea is unique enough to where major competitors in the field would try to adopt it, then I s...

13 comments

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bartonfink
What part of this is PG's fault?
grkballer44
None of this is PG's fault. I only made that the title of the post, because the financial analyst I talked to said the local fund I applied to said one of the reasons I wasnt eligible is that I applied to YCOMBINATOR. I meant this as a post to show whats wrong with the start up scene in most of the country. I feel that PG and ycombinator are part of the solution not the problem
rbanffy
Please revise the title to something like "having applied to YC was one of the reasons another fund turned me down".

It'd be fair to say it wasn't the only reason.

mzbridget
You were turned down by one program? You sound really bitter and I can see why they turned you down - you're not ready to be an entrepreneur. As a person running a start up, you're going to get turned down A LOT. So what if YC or TS or any incubator/fund is accepting 1%? You try. You try again. You keep trying. As a woman founder, I face much tougher numbers. I don't stop because the numbers are stacked against me! I keep trying. I figure out ways to monetize without funding. I get feedback on how to be better. When someone tells me an aspect of my product is crap I consider it and improve. I don't write out rants about how someone else was to blame. And yes - YOU NEED MARKET VALIDATION. If you can't prove that people will use your product, why would someone invest in you. This isn't 1998.
frankwong
Thanks for a WACK-IN-THE-HEAD response. Reading the original post got me into this "World Sucks" funk. But you are right, what is wrong should always be remedied first from within. A bit of self evaluation before blaming others is a good motto to live by.
mzbridget
Dude, I totally get your rant. Hey, we've all been there. Please don't take anything personally or you're in for a huge depression. Just take it as constructive criticism and keep plugging away. I've had some harshness come to me and at first it sucked and I dwelled on it. Then I realized that hey, maybe I'm applying to the wrong programs or maybe I'm not focused on core competencies. Just keep the feedback as such - its feedback. The world doesn't suck if you don't let it.
grkballer44
Sorry If I may have came off as an ass with the post. The point I was trying to make is that I truly didnt get any feedback on my product, besides the point of lack of market validation. IN my executive statement I sent a link to my beta, which he didnt visit until I was on the phone with him. Market validation is important, but I feel that id you have a functional beta as well as a concept or plan the least you can so is go through it b4 saying lack of market validation is the end all be all.
mzbridget
I rarely see a VC or incubator read the entire statement or much less click through to a beta. They care about numbers. You could have the next Google or FB but if you can't show that people will (or are) using it then what's the point? For me, I had to do an alpha test w/75 users and I have hundreds in my private beta and have tons of articles and market research to show traction and I still get questions about "enough traction". Just think about it from the VC perspective: "How much am I going to get back on my return" That's ALL they care about. That's all they should care about. Plus, its not up to them to give you feedback. You need to get people on your product and ask them for feedback, iterate based on their feedback and then start shopping it around to people in your space and get their feedback. After that, you go to investors.
jaequery
I don't really feel bad for you. Try again.
jaequery
Unless you get accepted by YC or any funds, there's no reason to mention them in the first place.

It's like trying to hit on a girl and saying, "I also met this other chic I liked ..."

cd34 

  His request: he told me to send in an executive statement
  Your response: an executive statement for an early stage tech start up is a huge 
  waste of time

  Fund's requirement: the company must stay in Canton, OH for the next 10 years
  Your response: apply for funding outside Canton, OH

  His response: according to him my idea wasnt unique enough
  You need to refine your pitch

  His response: lack of market validation
  four people isn't validation. Even in stealth, you need to get a number of people 
  using your product. You need a revenue model, you need people using the service 
  to tell you what needs to be improved. Your idea may not be easily marketable and 
  clients are going to give feedback on what works better for them.

  His question: why a start up would want to remain in stealth mode
  Your response: I began to get slightly agitated
Regardless of your opinion of what he knows, he's the one with the money that you're trying to get. Telling the guy with the money that he doesn't know what he's doing isn't going to get him to write that check.

Refine your pitch, adjust your attitude, get some market validation and paying customers and approach other funds or bootstrap until someone notices you.

frankwong
Is the norm to build and test until you have a live system where users have been using it over many iterations of feedbacks and alterations before approaching investors? At earlier stages than that is generally a bad idea to approach them? Thanks.
spitfire
You didn't apply to a startup incubator. You applied to a local vanity project.

Local/city governments all over the world are trying the "incubator" fairy dust in an attempt to seem hip and with the times. The "analyst" you spoke to is really a gatekeeper trying to filter out any project with a bit of risk (or any possibility of outsized success). What they're looking for is zero risk, guaranteed small-time success which officials can point to and say "see, we're entrepreneurial and digital!!".

On the other hand, if being rejected by third tier "analysts" gets you this down perhaps business isn't for you.