BlockCypher[1] has written about this. I think SnapCard did something similar, though the closest I can find is an article about the laundry service they started[2].
Nothing wrong with him warning them, but then there's also nothing wrong with them disregarding his warning. It sounds like they did pretty well regardless.
PG offered a good proxy for this a while back. He said if you look at the top companies from other accelerators, most of them probably applied to YC also.
>> ""Did you apply to and get rejected by YC?" must be a common question many investors now ask of companies that aren't YC alumni."
Is this a guess or do you have anything to back it up? It seems really strange to me. An investor shouldn't be judging you based on the judgement of another investor.
Rarely. It's mostly a game of "i'm too chicken to make decisions on my own."
VCs love love love the joke of "We're supposed to be all about new unproven dynamic ventures and insight into the future, but we're so risk averse! lol!!!!"
It's just a guess, which is why I said "must." But it doesn't seem strange to me at all - investors tend to move in herds. They tend to be much more interested in companies that other investors are also interested in. That's why communicating that there's great interest from other investors is key to raising money - it creates FOMO in the investors.
Oh yeah totally agree with the FOMO. I took it more as 'you didn't get into YC - I'm not interested'. In that case letting another investor make your decision for you seems like a pretty easy way to miss out on good companies.
Yeah, and most venture investors are pretty bad at their job - the majority of the industry loses money. But that's irrelevant to startups raising money, because a dollar is a dollar is a dollar.
An investor shouldn't be judging you based on the judgement of another investor.
Why not? Personally, when a company gets into YC, my opinion of that company goes up. Seems like that is just the rational Bayesian-updating thing to do.
Really? I would have expected social proof to play a significant (maybe not huge, but measurable) part in valuations of companies, no different to valuations of most other things.
CleverTap - integrates app analytics and marketing. We were known as WizRocket back then. We now have 1500+ customers, and raised $9.6 M from Accel and Sequoia.
What reason did YC give for your rejection (if you don't mind sharing)? And did you heed their advice or ignore it in order to get to where you are now?
Firstly, the interview process was very good. They asked us some very sharp questions. YC said, the reason for our rejection was that our product would only work for large enterprises having many repeat users (think Amazon etc.). So we went back, thought about it hard, and then rebuilt the solution to make it work for small businesses, startups and even large enterprises. Today our customers spans all three segments.
Typically for a Saas offering, there's always a free trial, an entry level low-price point plan, or a forever free plan - so the percentage of paying customers could be any where from 10% to 25%. The hope/try is to get the free customers convert to the paid tier as they derive more value from the product over time.
Not very strict demands. If it's still growing and does exciting stuff, I'm interested in hearing about it. (Though that probably is an insane amount of companies)
Success is when one remains true to self & others. If we must use Python, then - Any of these is considered False: None, '', [], (), {} and False itself. So, one is bound to achieve success by being truthful to self and others, always create value and make no empty promises and know when to "raise" an exception. Never giving up but knowing when to abandon a bad venture can also be seen as success.
There must be some +ve energy between a startup & an investor. Timing is also everything. Investors can only invest in so many pet food startups. While a pet food startup is making money and is considered a success, that doesn't mean investors have to invest.
Investors sometimes walk away from a B-team founders of a startup no matter how successful the startup really is. A-team with B-plan is always prefered over B-team with A-plan.
Sometimes, Founders decide not take money from investors, if they believe that the investor may only bring money and without any intellect and/or networking.
With that said, the final transaction is not everything.
* Chartboost
* Sendgrid
* LightSail
I've seen it claimed that Couchbase should be on this list, but I've never seen a primary source which verifies that they were rejected from YC.