Seed-funding giant Y Combinator (YC) is now opening its doors to a wider network of startups. By expanding its recommendation network to include customers, academic professors or others associated with the business, the company aims to make its programme more accessible for the average entrepreneur.
YC's website now offers the option of both applying directly or recommending a business. The recommendation process is built upon the same model of a founder's own application and asks for those making recommendations to "demonstrate the strength of a company's individuality."
The application form also has questions focusing on the unique selling points of the company; the experience of the founders in a particular business area and the potential competitors within the startup's chosen sector. A firm business plan isn't necessary to wow YC investors, who claim to make their decisions based on application forms, personal interviews and any demo products the candidate may have.
Y Combinator believes the most important question in their application process is: "Please tell us in one or two sentences about something impressive that each founder has built or achieved." This is where the power of the recommendation comes into play.
In the wake of announcements that startup incubator Station F will become the base for Facebook's 'startup garage' in April - set to host 10-15 companies every six months - projects for startup funding are gaining momentum. Y Combinator, a company built around seed-funding and startup support, seems to be evolving to maintain its edge in the face of competition.
Founded in 2005, YC invests $120,000 twice a year into startups. The programme is designed to retain a large number of potential business opportunities - with the last intake yielding 107 startups. The total number of companies funded by Y Combinator is 940, with projected valuations of all YC-funded companies at an estimated $80 billion.
The programme involves moving startups to Silicon Valley for three weeks, in which time they work to refine pitches and business dynamics. This culminates in a Demo Day, in which the startups pitch to a select panel of investors. This process has been responsible for the creation of Dropbox, Reddit and Airbnb, to name a few.
Given the pedigree of startups associated with the programme, YC’s application process wants both positive and negative recommendations. While anyone is now free to recommend a startup through the application process, YC demands a broad assessment of the business. This is to give the company an overall view of how likely a startup is to succeed after seed-funding, by evaluating both the good and bad of every investment. Recommendations aren't essential to being accepted onto the programme, but they allow for a wider range of startups to undergo the application process.
The next batch of applications for the YC Summer 2017 cycle is now open until March 24.
This article was originally published by WIRED UK
