> A big part of what YC is about is to be a bridge for everybody else to enter this space—no matter who they are or where they live or what demographic they belong to. YC has a long track record, right from the beginning, of funding founders who never would be given a chance by more mainstream institutions
I find this fascinating, maybe as an example of how institutions think of themselves and how they are actually perceived.
YC feels it is giving outsiders a chance (and that might be true for lot of the intl founders YC funds). But for most in the US, it seems like YC funds only safe SAAS startups, often by founders who were ex-FAANG (or ex-prominent YC startups), who are often white, and often MIT/Stanford.
Maybe it's the definition of 'outsider' that differs, but when I look around founders who reach out, female and founders of color often feel ignored. Consumer founders feel ignored compared to enterprise founders.
There are so many stories of founders who are actual outsiders (woman/PoC and non-elite schools) who have growing, promising, even revenue-generating companies who don't get even an interview and yet, other 'insider' founders (white, male, ex-FAANG or ex-YC portfolio) who get in on a recently thought of high-level idea (and then subsequently pivot a bunch of times in the batch).
I say all of this because it worries me if YC already thinks of itself as funding those outside the mainstream, that it doesn't actually realize who the outsiders are.
Just to add to appsec112's point, while I did frame my original point as a 'perception', I'm willing to take a bet that if you put together US companies stats, I would be more right than wrong.
And while we are at 'actual stats' conversation, can we do the following -
- for the sake of this conversation, not divvy up enterprise/saas from devtools and enterprise-y fintech and enterprise-y health?
- publish stats on stanford/mit claim?
- publish stats on previous employer? ex-FAANG vs ex-YC portfolio vs none of those.
I appreciate YC publishing stats but the industry's work is not done when just high-level stats are published without scrutiny.
This doesn't address the claims, and honestly feels evasive. The original comment specified:
"(and that might be true for lot of the intl founders YC funds). But for most in the US"
ie., they agree things might be different for international YC startups, but they are talking specifically about US startups. That half of the startups are international doesn't matter for claims about the sub-population of US startups. Likewise, any particular type of startup could be well-represented among all YC companies but not US companies.
One problem with these stats is that they're counting the 15% of founders who are Latino as non-white. However, in countries like Brasil and especially Mexico, a large portion of the people who are able to get tech startups up and running are white people, not indigenous, mestizo, or black people. Mexico in particular has a huge problem with the elites almost all being white. Y Combinator is likely padding its diversity numbers by recruiting rich European and Mediterranean elites from Latin America. I'm not saying they definitely are, but it's very likely.
I do think it'd be more accurate to say "white or Asian" rather than just "white" when describing the bulk of Y Combinator participants. Asian people, though discriminated against in many ways in US office settings, are still firmly a part of Silicon Valley culture at all levels.
The perception tells more about the poster than YC for sure, but how will you address this ? I'll be honest, I had the exact same impression and I'm French, living in Hong Kong. For everyone, YC is a sort of Californian techno bubble, and now that I see stats, I wonder why I thought that way.
Maybe move away from California/US completely, change your own capital providers, make documentaries about how you're the top African venture capitalists and are headquartered in Kenya ? Maybe we conflate who you fund with who funds you ? Do you have the same breakdown for representatives of capital providers ?
Sure, perceptions differ, especially from different points of view. People at YC put a ton of effort into what I've described. Is a lot more needed? Of course. They'd be the first to agree with you about that. That doesn't mean the efforts to date aren't worth anything, though; let's not fall into being binary about this. Nor does it change the point about the differential impact of a $500k deal, for those who do get funded and don't have external resources to fall back on.
> But for most in the US, it seems like YC funds only [etc.].
That's far from accurate, and I don't think it's very helpful to say "for most in the US". Surely only a small minority in the US have even heard of YC.
> That's far from accurate, and I don't think it's very helpful to say "for most in the US". Surely only a small minority in the US have even heard of YC.
I read the parent's statement as (brackets are mine), "But for most in the US [startup community], it seems like YC funds only safe SAAS startups, often by founders who were ex-FAANG (or ex-prominent YC startups), who are often white, and often MIT/Stanford."
They do [0], for each batch. Not quite at the level of granularity where you can reduce scope from everything they fund to just look at US founders, but the general trend appears towards increased diversity, and it looks like that's a YC goal as well.
Those statistics are very spotty and incomplete, though. They start with W15 but have nothing about 2016, for example. The format isn't consistent from one post to the other. They often (although not always) only give the percentage of "companies with one female founder" instead of the total percentage of female founders. They list the countries of origin but with no percentage at all except for the US.
Most importantly, they don't list the level of education of founders, which I think would show they are not primarily helping the disenfranchised.
YC is a business. It makes sense that they would choose healthy founders with high education levels, high IQ, drive, grit, what have you. They are a business, not a charity. And that's fine.
But the claim that they are making the world a better place is a bit rich. If (for example) you're funding crypto -- including NFTs! -- you're not doing that for the betterment of humanity.
Do you ever have a take that doesn't favorably frame your preferred discussion parameters whether they're stated or not? Isn't there a way to imagine this has been binary in some people's experience? Wouldn't that be a failure of this mission you'd want to know about?
Rural Canadian with no college degree here. Our competing fundraising offers were 1. A $10k loan from a bank or 2. $250k CAD on $750k CAD with a board seat and 2x liquidation preference. YC deal was like helicopter money generous at $125k SAFE for 7% compared to alternatives.
Sharing my personal experience here, as I found this thread interesting. To be clear: this anecdote isn't intended to argue with the statistics mentioned in sibling comments, or that YC doesn't fund outsiders, nor do I claim to be 'an outsider' in the first place. In any case I believe YC should fund or not fund whomever they want. But I hope it shows how some of these feelings can arise.
For context: white man from Brazil, top Brazilian uni but no brand-name US MBA or MS, Bain + Private Equity, first applied to YC with a startup in my late 20s when I left PE in late 2015. Since then have applied perhaps half a dozen times, sometimes with something that was still on paper, sometimes with things I was working on with a team and were already advanced. Some theses more enterprise-y (e.g. corporate education benefit platform), some pure consumer fun (e.g. stickers), some 'you must be joking' (e.g. let's redesign the web). My cofounders are brilliant in their domains but often don't speak great English, and they have small shares in the company as they need to take salaries, while I don't and I do the initial funding, so either I show up as a sole founder, or I have them on the video subtitled which ends up a bit weird.
About 2 years ago, our startup (which we had applied with to YC a couple of times before) reached US$6M ARR. Until then we had bootstrapped it, but decided it now made sense to go for VC. At that size we spoke directly to VC firms, of course, but given that we were all the way over here in Brazil, and Brazilian VCs by and large focus on local theses (at least in the early stage) rather than global ones, I also thought that it would make sense to talk to YC, as even though the dilution would be painful, that would multiply our global VC network in one go and thereby perhaps pay for itself. One catalyst for that was when a VC from a top-10 US firm reached out to us, but ultimately said "Look, if you were in the US, we'd be able to fund you Series A no sweat, but in Latam we only go in once things are at Series C". So I led our presentation video for YC with "Hi! We're X. We have US$6M ARR" making a 6 with my fingers. I realize of course that that per se doesn't make a company attractive, but I thought that at least it would buy us an interview. Nope.
Although it may come across as arrogant to do so, I do think that was a clear-cut investing mistake of omission, simply because our actual ex-post performance would have compensated YC very well had they invested, even without factoring in any value-add.
I later found out YC in that batch backed a tiny startup in the same field which (to the best of my knowledge) had struggled in consumer (competing directly against us), had little-to-no-revenue and was now trying to go for a B2B approach (which we had analyzed but dismissed as unattractive). Really made me rethink whether it was a good idea to put lots of our sexy stats in the application; not that I am saying YC used them - but it drove home how they could have.
We applied with a new unrelated thing once after that, even though we didn't need the money, mostly because we think it would be an interesting personal experience, and a good investment for the long-term to build that network. But frankly the program now being remote also puts a bit of a question mark there - it's a mixed blessing.
Anyway, we've done well enough, and one thing I'm considering is setting up a small angel fund just focused on founders in emerging markets (esp. Latam, esp. Brazil) whose products are global from the start, like ours, as I do feel that still falls in-between the cracks. But I'm busy with our company so don't have much time for that yet.
I hope this was helpful without coming across as too whiny or salty!
I realize that these funnel processes with vast amounts of applications are needle-in-the-haystack hell. I experience it when we open up a job post and get just 200 applications 180 of which aren't a great fit, let alone the thousands YC gets. Perhaps with some of these demographics, YC faces, to a small degree, a problem analogous to iBuying (e.g. as discussed by Rich Barton when Zillow quit that market), where the selectiveness by definition means that the majority of applications are rejected, thus contradicting the 'fast & easy' value-proposition and thereby generating negative sentiment among those rejected, no matter how generous the offer to those accepted or how representative the sample of those accepted.
As a response to both dang and emmett, I'm honestly surprised by the strong defensive nature of both your responses. It's what I'd expect from old-school VCs, not YC.
Both appsec112 and infamia already responded to each of your nitpicks, and we can slice and dice categories, labels and phrasing till the cows come home but I was hoping for a more substantive, introspective or atleast a thoughtful response to the original thread.
Maybe there will be a better forum for this conversation some day but as an under-represented founder, this feels like a cynically but not surprisingly another disappointing conversation.
I find this fascinating, maybe as an example of how institutions think of themselves and how they are actually perceived.
YC feels it is giving outsiders a chance (and that might be true for lot of the intl founders YC funds). But for most in the US, it seems like YC funds only safe SAAS startups, often by founders who were ex-FAANG (or ex-prominent YC startups), who are often white, and often MIT/Stanford.
Maybe it's the definition of 'outsider' that differs, but when I look around founders who reach out, female and founders of color often feel ignored. Consumer founders feel ignored compared to enterprise founders.
There are so many stories of founders who are actual outsiders (woman/PoC and non-elite schools) who have growing, promising, even revenue-generating companies who don't get even an interview and yet, other 'insider' founders (white, male, ex-FAANG or ex-YC portfolio) who get in on a recently thought of high-level idea (and then subsequently pivot a bunch of times in the batch).
I say all of this because it worries me if YC already thinks of itself as funding those outside the mainstream, that it doesn't actually realize who the outsiders are.