Because you want to start a business that supports itself with profits instead of outside monetary investment.
Because you want to build a great version of some X but don't necessarily want to disrupt or reinvent an industry.
Because you want to be financially secure and not risk your financial future on an idea that isn't guaranteed to work.
Because you like traveling or taking time off or playing around with a lot of different ideas and aren't at the place where you want to commit to working full-time on a company for five years.
etc...
This isn't a knock against YC at all, there are just other ways to grow and scale a business than hyper-growth + raising outside capital, and sometimes even if you have a great idea, bootstrapping can be a better approach for you depending on what kind of person you are and what point of your life you're at.
I believe you mean a list of reasons why participating in YC is not good for your startup prospects?
When we applied, most of our business was in NYC (and it still is today), but we had to move Mountain View for the 3 months of the program. As it turns out, moving was hugely beneficial because it also forced us to free ourselves from many random obligations from our daily lives. I would fly back to NYC regularly, but for specific and determined purposes, which minimized time for distraction.
Some say the equity deal is bad, and in summer 2009 it was an order of magnitude worse (6% for $15K). However, 94% of a success is much better than 100% of a failure, and I am absolutely sure YC saved us from failing multiple times.
If there is ANY true negative consequence of participating in YC, I would say you are placed into a peer group of overachievers that values fundraising for high growth. While there is a LOT of upside to close interaction with dozens of other founders, the negative is that we naturally tend to compare ourselves to our cohort. I never felt any outright competitive pressures from my batch, but at the end of the day, the universal yardstick seemed to be how much funding you could raise from the most prestigious investors.
To be fair, the YC partners stressed that fundraising is a silly measure of success and that getting ramen profitable and default-alive is more important, but it's still demoralizing when (seemingly) all your friends raise money and you are grinding along at a bootstrap pace. For RentHop it was absolutely the right play - our revenue hockeystick didn't begin until 3 years later.
- Major life disruption for at least 3 months, as you must live in Mountain View whilst in the YC program. This makes it untenable for founders who have any other time obligations, like a family.
- Startup living stipend sufficient to split an apartment in MV in lieu of real salary. This makes it untenable for founders who have any other monetary obligations, like a family. Granted, this is a sector limitation, but it's not something that YC had to follow.
Most tech investment seems to be about getting as many naive college kids as possible to offer practically free labor to investors.
That's a pretty uninformed opinion. YC is a collection of smart people trying to build things...
That "fancy apartment" is the cheapest place you can find in Mountain View with 4 people stuffed in, half sleeping on the floor.
How many YC founders go on to business school? I've heard of none, but I'm sure there are a few... But do you have anything backing up that people go to YC for that reason?
I think I went to one party during the course of YC. In fact, all I really did was build product and talk to users. It's one of the mantras of YC and anyone not following that advice certainly isn't seen as a "cool kid".
Probably not worth trying to change your opinion, but you're 100% wrong on every point (except the first if you define "cool kids" as people working hard trying to build things).
The worst reason to apply is if your acceptance will make/break your project. If you're optimizing what you're doing around getting into YC, DON"T APPLY.
Applying to YC (or any accelerator) should be an afterthought. Something you spend half a day on for shits and giggles, and an opportunity to reflect on the meta state of your project. Hit send and forget about it.
The odds of getting in are not high. For most people who aren't ivy league grads, haven't worked at Google or Uber, or don't have 6 digits of revenue, it might not be worth the time.
And if you still haven't figured your business plan, you might want to do it before applying. Pivoting within an accelerator is not a comfortable experience, and would be a waste of time for Demo Day.
Also I'm not sure how well YC works for married entrepreneurs with kids. There doesn't seem to be a lot of married YC founders, but do correct me if I'm wrong.
A lot of the advice they give is already out in the open. So unless you need the cash or connection, you might not want to.
It's well worth the time to apply no matter the outcome (imo). Worst case you have bought a lottery ticket AND thought about your idea in an organized way. There's value in that.
Or how about reasons why not to apply, if there are any? I imagine it's stressful and time-consuming for many people, for example. (Though of course that comes with starting any company.)
I can only speak for myself. Here's why I never applied:
- In its beginnings ZeroTier was a one-man band for several reasons (some circumstantial, some historical). PG has explicitly written against single founder ventures, so I decided I had near zero likelihood of being admitted for that reason alone. Add to that the fact that my degree is from a Midwestern state school and I have not "worked at Google," etc., and I figured the lack of impressive credentials coupled with single founder status reduced the likelihood of admission to the point that I'd be better off spending the time to purchase a PowerBall lotto ticket.
- I am older, have kids, and am not rich. The Bay Area's real estate costs are simply too high, and I can't relocate on a whim because I would have to uproot family. It would make no sense to move there unless it were a permanent move, and YC's stipend is not sufficient to support a family in the Bay for even one year. Post-YC, being in the bay would cause our burn rate to be unacceptably high. (Almost 2X by my estimations.)
- At the time ZeroTier already had 10% month/month user base and active device count growth and I already had clear ideas about how to grow further and monetize, etc. I didn't feel like I needed that much hand-holding and already had some idea of the advice I'd get, etc.
By the time I became a we and this became a full time venture with everything it needed, we were too far along and YC fails cost/benefit analysis. At this point we'd have a chance of getting in but we don't need to get in.
There's one more point that didn't factor specifically into not applying to YC but is relevant:
I think there's a perspective advantage to not being in The Valley. It's very faddish up there and we'd be much more likely to end up in a situation where everything we build and our entire marketing pipeline is optimized for selling to other startups and Valley companies and that's not a good place to be in when that industry is extremely cyclic.
Our product is very useful to a lot of less faddish, trendy enterprise users and institutions like universities, etc., and we do not need to be in the Valley to reach these customers.
SoCal is underrated IMHO. It has a great talent pool minus the completely flat out insane real estate costs and is about two hours by plane from SF/SV.
I can't stress enough how crazy the RE costs up there are, especially when compared with what you get. First time I visited SV and toured a $3000/mo apartment with a lobby that smelled like dog urine I called it "perhaps the world's only six figure slum." Manhattan is that expensive but you're in Manhattan, not a crap vanilla apartment in a boring suburb. You have to spend over $5000/month there if you have a family to get an acceptable place to live. We currently spend under $2000/month for a clean, modern, nice place and are 20 minutes from this:
There's a lot of tech in San Angeles (I consider it one city), but it's more spread out. We are a distributed network of hundreds of suburbs, not a hub-and-spoke network. :)
We are located here and likely will be for a while:
7% might not be worth it if you've sold a couple companies and are a mortal lock for funding for your next company, but otherwise, this is the weakest objection to YC. The value you get just from having the YC label more than offsets the 7%.
(I'm sensitive to this because it used to be my big objection to YC, because 7% is a large amount of equity to give up for the money they're giving you, maybe even today.)
The initial app takes an hour. Then if you are lucky enough to get an interview it's a few hours if you're local (more if you're traveling) and probably some healthy anxiety leading up.
