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Wefunder Blog

What the heck is Y-Combinator?

on Apr 13

Over the last couple of weeks, we’ve added 36 Y-Combinator (“YC”) companies to the Wefunder platform, shattering our previous record. But.. What the heck does that mean?

Hi! I’m Adam, Wefunder’s newest founder-in-residence. I’m also a 2014 Y Combinator Alum, so I’m stoked to give you the long and short of Y-Combinator today.

YC is the global leader in spotting formidable founders and making *lots* of money investing very early; some examples include Airbnb, Stripe, Coinbase, and Reddit. Typically, investments in YC companies are a closed-door, insider-only opportunity. But 36 YC companies are breaking out of the status quo of privately raising from rich people – they’re raising from the crowd, from anyone. This is a significant step towards democratizing startup investing and our team is ecstatic.

But let's dive deeper into what YC actually is.

Y Combinator is a startup “accelerator” that invests $125,000 in exchange for 7% equity. If accepted, you join a bi-annual cohort of 120(ish) companies for a 3-month intensive program. Statistically, odds of acceptance are grim: over 10,000 companies apply.

During the 3-month program, you do 3-ish things: talk to users, write code, and exercise – sometimes you sleep. There are also weekly dinners with speakers like Peter Thiel and Mark Zuckerberg. You are kept “on track” through weekly office hours with overqualified mentors like Paul Graham, Sam Altman, Dalton Caldwell, and Paul Buchheit. The experience is unforgettable, and your company benefits through rapid product maturation and growth.

The value of YC doesn’t end after the program. For example, when my company pivoted, other YC companies quickly jumped in as early adopters and paying customers. We got unfiltered feedback and leaned on the entire network for advice. When we’d grown enough out of the pivot, investments from fellow YC alumni made up a good portion of our seed round. I was not unique, all YC alumni receive this intense level of support.

In short, YC companies have a massive amount of resources and support compared to most startups. Y-Combinator sees more successful exits because they pick out the crème de la crème, enlist celebrity entrepreneurs as mentors, and provide fantastic ongoing support from their network.

The best part? YC companies are on Wefunder to find you. They want you to be a stakeholder in their company. Equity crowdfunding provides not only capital but also brand awareness. Investors are your best promoters, and through Wefunder, they get hundreds!