How do I apply to Y Combinator, and how do they evaluate companies?

I want to take my startup to YC, but I need more information on how they evaluate companies.


I am an early investor in a company that was lucky enough to be selected to Y-Combinator back in summer 2015.

First of all, the process is very competitive, so you should a) expect that despite following all of my advice, you will more than likely not get accepted into the program b) have a solid and robust plan for your company to succeed without Y Combinator (plenty of startups are able to hit the big time without going through Y Combinator).

What impressed me the most about Y Combinator was that they looked at -- and accepted -- a company that was completely outside what I would've guessed to be their "sweet spot". The company I was invested with was not a technology company (they were in the retail space) and they were not based in the SF Bay Area (or even in the US).

What became apparent to me from speaking with the CEO is that Y Combinator looks for startups that a) show a demonstrated track record of "exceptional" traction b) have the potential to satisfy an existing need better/ cheaper/ faster and c) have a large market that can be satisfied.

So what does this mean in practice?

The company I invested in was able to show "exceptional" traction through a few proof points:
- They had received a grant from P@SHA Social Innovation Fund.
- They had been recognized as "Innovation Heros" by Google.
- They were Acumen Fund Fellows
- They launched a Kickstater campaign to raise $15,000. They reached $28,000 in less than 48 hours and were able to raise over $100,000 over the course of their entire Kickstarter campaign.
- They were informally asked to apply to the YC program from a YC alum, but even then they were put through the wringer during the interview process. Apparently several other firms which had been informally asked to apply did not get selected to join the program.

These are obviously very high hurdles to jump over and even more remarkably they were done with capital from only one other angel investor (luckily, me!).

If you want more details, I'd be happy to discuss. If you are fortunate enough to be selected to the YC program, I certainly salute you, as it is something that I will likely not achieve in my lifetime. However, please recognize that YC should not be the end goal of your startup dreams.

You should have a plan to build a product, market it, serve your customer base, and generate revenue without YC or any other incubator. If you need help in that space or with one particular area of your business, I'd be glad to help.

Answered 8 years ago

The one thing that they care is growth. They want to see a healthy growth rate for sure.

Another thing they strongly consider is that the founding team is technical, at least half of the company must be owned by people with a strong background in tech. They want teams that are fast in iterating their products.

You should definitely read Paul Graham's essays before applying.

Answered 8 years ago

You might want to check out their request for startups. See if your company fits in any of those areas.

Answered 8 years ago

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