Y Combinator accepting applications for Winter 2008

Y Combinator is now accepting applications for their winter start up boot camp in San Francisco which runs from January through March 2008. I attended the Summer 2007 Y Combinator Investor Day recently.

Y Combinator is a seed stage investor with a large network of entrepreneurs, VCs, and all the people you need to start a company. It is hard to explain but it is a cross between a startup boot camp and a traditional startup incubator. The best description of Y Combinator is on its application page.

Here it is in its entirety;

1. If you want to apply, please submit your application online by 10 pm EST on October 11, 2007. Groups that submit early have a slight advantage because we have more time to read their applications.
2. We'll review applications by October 18 and invite the groups that seem most promising to meet us in Cambridge on the weekend of November 3-4. We'll reimburse up to $600 per group for travel expenses.
3. We'll decide who to fund that weekend, and tell you by phone on Sunday evening.
4. Yes decisions will include the amount we'll invest and the percent of the company we'd want for it. We usually invest $5000 + $5000n, where n is the number of participating founders (i.e. 2 founders get $15,000, 3 get $20,000), in return for between 2% and 10% of the company. The median is 6%.

5. If you accept our offer, we'll write you a check immediately for as much as you need to cover your initial expenses.
6. If we invest in you, your group is expected to move to the Bay Area for January through March 2008. (You can of course leave afterward if you want, but it's a good place for a startup to be.)
7. After you're accepted, we'll set up all your paperwork for you, including getting you incorporated.
8. Once your company exists, we'll write a check to it for the rest of the money. You can spend the money however you want.
9. Y Combinator is not an incubator. We have space you can use if you need to, but we expect you to work out of wherever you find to live. It is no coincidence that so many successful startups have started this way; it's the ideal setup for the initial phase.
10. From January through March we'll have dinners every Tuesday for all the founders. At each dinner we'll invite an expert in some aspect of startups to speak.
11. On Wednesday afternoons we'll have an open house at YC for founders who want to demo their latest work or talk about strategy. You can arrange to meet with us any time during the week, but the open houses ensure no one has to wait more than a week.
12. You're encouraged to ask the founders of other YC-funded companies for help. There are now almost 150 of them, and they're usually very willing to give advice or make introductions.
13. About 10 weeks in, we'll organize an investor day at which startups that want additional funding can present to investors. You can of course seek additional funding from any investor whenever you want.
14. YC doesn't really end after three months; only the dinners do. We continue to give advice and make introductions as long as founders need—and so does the informal network of YC-funded companies.

How do we choose who to fund? The people in your group are what matter most to us. We look for brains, motivation, and a sense of design. Experience is helpful but not critical.

Your idea is important too, but mainly as evidence that you can have good ideas. Most successful startups change their idea substantially.

We're more likely to fund people we know are smart from their submissions and comments on Hacker News. In fact, that was one of the main reasons we wrote it: so that we could get to know people before they applied.

The ideal company would have two or three founders. We'll consider those with four or five. We're very reluctant to accept one-person companies, though we have funded a couple.

We don't expect you to have a formal business plan yet. All you have to do is fill out our application.

$5000 + $5000n is not a lot, but it turns out to be enough. It will cover at least 4 months' living expenses, and that is enough time to build something nontrivial. It's in your interest to take little money in the earliest stages, because you give up less control for it.

The original motivation for Y Combinator was benevolent, but this is not a charity. If our investments pay off, we can invest in more startups, and if they don't, we can't keep doing this indefinitely. So we're looking for startups we think will succeed.

My next post will be an interview with Paul Graham, founder of Y Combinator. I ask Paul lots of questions about how the program works and his philosophy on building startups.

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