BackThe Startup Holy Grail, Y Combinator

The Startup Holy Grail, Y Combinator

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Y Combinator is a world-renowned startup accelerator with companies like Dropbox, Airbnb and Stripe on their roster.

Every now and then we dream up a great idea. Let me be the one to tell you to hold on fast, and introduce you to Y Combinator. Y Combinator is an American technology startup accelerator located in San Francisco. They are the holy grail of startup accelerators with over 3,000 company launches. If you don’t believe me, think of names like Dropbox, Airbnb, Doordash, Instacart, Reddit...major industry players right?!

If you have an innovative idea, apply and you might be among the 1.5% to make it in and gain benefits like seed money, talks from industry experts, an alumni network etc.

Photo Credit: Disney

They have a lot of experience in turning small ideas into spectacular world-dominating household names. I bet I have your attention now! Y Combinator was founded in March 2005 by Paul Graham, Jessica Livingston, Robert Tappan Morris, and Trevor Blackwell and named one of the most successful startup accelerators in Silicon Valley by Forbes in 2014.

The Y Combinator Program

You can get in by filling out an application form. Promising founders are invited to an interview, based on which a decision is made on their acceptance into the program. The selection is done twice a year in two batches (January-March, June-August) that run for three months. 

The exact number of companies per batch is not known however, it is competitive with an acceptance rate of approximately 1.5%. Currently, the accelerator program is running remotely due to covid-19 and has been so since the beginning of the pandemic.

The YC Deal

Photo Credit: Pandan


The deal companies get is seed money of a whopping $500,000, with $125,000 accounting for a post-money safe in return for 7% equity, and $375,000 being invested on an uncapped safe MFN Most Favored Nation provision, which simply put is a non-discriminatory principle to provide equal favorable terms for both parties in specified circumstances. Meanwhile, non-profits receive $100,000 donations. 

Besides the seed money, founders participate in meetings, weekly talks with industry experts, are taught how to enhance their business model, market their product, etc., with a presentation on demo day to conclude the program. Founders also have access to a huge alumni network to reach out to.

How to be Selected for Y Combinator

A combination of a promising idea (that is well explained and concise) and promising founders (ever achieved/done something impressive? this is an opportunity to brag) is key. Other factors incorporate the idea's pain point, the ability to scale it to a big audience, and the innovativeness of the solution, hence their motto “Make something people want”. Thinking out of the box is necessary.

Animation typing on a computer at a desk next to some animated desk plants.
Credit: Amelletour

The Y Combinator startup school is a free resource and one way to prepare to apply for the program. You can also read the story of the founders of Rebank Juan Andrade and Simon White to give you some inspiration and check out Dropbox’s 2007 application. Don’t give up yet, get busy, roll up your sleeves, work on those brilliant ideas of yours, and you could have your Cinderella moment!

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