For all of us that were rejected, remember there's always other places to turn to. Plus, 6% is awfully steep for $15-20K. Google gave up only 12% for millions in investments.
By the way, these guys don't require a formal introduction. So networking is not too important too them. They profess that they are pro-underdog. So take a look! But don't ask them for the money that we will be getting from them or we will send you nasty emails every Thanksgiving!
I think its more because old habits, like Silicon Valley's gentleman's club, die hard. There are tons of excellent hackers who couldn't get an introduction, including a large number of the Y C companies that went on to get VC funding.
I know from a talk that one of the VCs at Sequoia gave that almost nobody gets funded by them without having been introduced. He said that they were meaning to pay more attention to stuff that comes in over the transom, but it sounded much like I do when I say that I want to work out more.
It takes a lot of skill to identify the emerging companies of the future. Why would they say something they do not mean? You see VC's are very competitive. The really good ones realize that there is untapped potential out there that are likely to be missed by the "traditional VC's". Closed mindedness never innovates and this innovation creates the true leaders in any field.
It's a lot like Ivy League universities. They are under enormous pressure to perform and house the next great research endeavors. Have you ever noticed that Ivy League universities never set strict requirements on admission whereas public universities do. This is because they recognize that many innovative minds would be passed over if they set strict criteria. Einstein, the great genious that he was, made lousy grades and was told by his early teachers that he would never make it in school. In fact he was told he should drop out. Einstein was actually told he did not belong in school. Thats the product of closed mindedness. It was not until Einstein recognized his true passions in life that he became the "genious" that he is considered today. Quite frankly, it takes genious to recognize genious. And traditional VC's don't have this genious. That is why they would set more limits on who they fund.
We are all told how ruthless VC's can be and how they will take your company from you. Michael Moritz of Sequoia capital invested a little over 12 million for a 10% stake in Google. In fact, founders in these leading VC backed firms end up being recognized as the most powerful forces in the companies. This is because the truly revolutionary VC's recognize that they do not have the vision of the founders. They are willing to relinquish some control.
But I guess my point here is the leaders in any field are willing to listen to new ideas from new people because they must, to stay ahead in their game. And that is what they want most of all.
I'm not so sure about that. VC's are the car salesman of the startup world... if you're not careful you'll get screwed. There are plenty of stories...
That's one of the main things that has attracted me to YC. It's very transparent and they seem fair and trustworthy. (too bad we got rejected - o well we're still releasing this year regardless)
It seems to me that YC is more interested in making quick in/out investments and not in real long term projects. Long term projects belong in the hands of those that are willing to go in for the long haul.
I am not too disappointed that our application was rejected on those grounds. Really, who wants to give up so much for a few dollars and a chance to give a presentation?
Fair point. YC exists not to be on your board or help run the business, but to help you get to the people that will do those things. Which, I consider, to be a valuable service.
Have you had any contact with Sequoia? If so, what are they like?
We have not made contact yet. However all of our research suggests that they are an easy bunch to work with.
It is in their best interest not to turn people away on the basis of no-intro. The founders of many of their start-ups contacted them out of the blue with their plan and expressed desire to work with them.
That's not exactly true. They remain involved with you indefinitely. They have a vested interest in your success, it would be silly of them not to.
Their strategy (lot of small investments) does take depend on economies of scale, so it's not as hands on as Sequoias, which depends a few big investments. They obviously won't spend as much time with you as a VC would because of that, but the time they do spend is proportionately more valuable.
You give up a small % of the company, and it's a lot more than a presentation. There are also advice, contacts, and credibility.
"I am not too disappointed that our application was rejected on those grounds. Really, who wants to give up so much for a few dollars and a chance to give a presentation? "
One of the primary factors that makes me say this is that Google got over $12million for only a 10% stake in the company from Sequoia Capital. I learned about this after we had already applied.
If PG would have asked us for an interview and invited us, I (personally) would have rejected the offer if their stake was to be more than say 2%.
YC is asking for a huge chunk for slight benefits. Its not tongue-in-cheek, its strictly good business.
19 comments
[ 3.1 ms ] story [ 33.5 ms ] threadThese guys are friendly too: http://www.tandementrepreneurs.com/
No matter what they say, an introduction is the only real shot of success.
It's a lot like Ivy League universities. They are under enormous pressure to perform and house the next great research endeavors. Have you ever noticed that Ivy League universities never set strict requirements on admission whereas public universities do. This is because they recognize that many innovative minds would be passed over if they set strict criteria. Einstein, the great genious that he was, made lousy grades and was told by his early teachers that he would never make it in school. In fact he was told he should drop out. Einstein was actually told he did not belong in school. Thats the product of closed mindedness. It was not until Einstein recognized his true passions in life that he became the "genious" that he is considered today. Quite frankly, it takes genious to recognize genious. And traditional VC's don't have this genious. That is why they would set more limits on who they fund.
We are all told how ruthless VC's can be and how they will take your company from you. Michael Moritz of Sequoia capital invested a little over 12 million for a 10% stake in Google. In fact, founders in these leading VC backed firms end up being recognized as the most powerful forces in the companies. This is because the truly revolutionary VC's recognize that they do not have the vision of the founders. They are willing to relinquish some control.
But I guess my point here is the leaders in any field are willing to listen to new ideas from new people because they must, to stay ahead in their game. And that is what they want most of all.
You wont be referred to Sequoia right away, but the point is you meet people through people. It is a gradual process.
As my mother used to tell me: "Thin threads". Sometimes a random introduction can turn into something significant.
That's one of the main things that has attracted me to YC. It's very transparent and they seem fair and trustworthy. (too bad we got rejected - o well we're still releasing this year regardless)
I am not too disappointed that our application was rejected on those grounds. Really, who wants to give up so much for a few dollars and a chance to give a presentation?
Have you had any contact with Sequoia? If so, what are they like?
It is in their best interest not to turn people away on the basis of no-intro. The founders of many of their start-ups contacted them out of the blue with their plan and expressed desire to work with them.
Their strategy (lot of small investments) does take depend on economies of scale, so it's not as hands on as Sequoias, which depends a few big investments. They obviously won't spend as much time with you as a VC would because of that, but the time they do spend is proportionately more valuable.
You give up a small % of the company, and it's a lot more than a presentation. There are also advice, contacts, and credibility.
This is of course tongue-in-cheek right?
One of the primary factors that makes me say this is that Google got over $12million for only a 10% stake in the company from Sequoia Capital. I learned about this after we had already applied.
If PG would have asked us for an interview and invited us, I (personally) would have rejected the offer if their stake was to be more than say 2%.
YC is asking for a huge chunk for slight benefits. Its not tongue-in-cheek, its strictly good business.
You do. ;)