Jason M. Lemkin argues that joining Y Combinator (YC) is generally worth the dilution because of YC's powerful network, branding, and the confidence it can provide founders. He supports this with multiple anecdotes and examples—Algolia, Treasury Prime/Standard Treasury, and several CTOs who benefited from YC—and concludes with direct advice: if you're unsure, do YC to gain that missing ‘slice’ (network/credibility).
I think that. And listen, I don't work at yc, right. I think if you're not sure, do it because the YC companies I've invested in it look, YC is expensive. It's a lot of dilution for a little bit of capital. When, when the earlier waves pre YC that did this back when I was starting my career, you see, they were founder rip offs. Okay, give us 7% for like one hour of a designer's time. That was like the biggest rip off back in the day. But YC is not that. And listen, I'm not into brands. I don't know where any founder I invested and went to college. But YC is Stanford, Harvard, MIT and Caltech all rolled into one. And even if you don't learn a goddamn thing from the program, all things being equal, you might as well go to Harvard or Stanford or mit, right? Not that I care. I don't care. And I went to Harvard. And maybe that's why I don't really respect it or even asked for founders I went to. But it doesn't hurt, right? And VCs. So respect it. Now look, there are like 220 companies in this batch, right? They can't all be the next stripe, right? There's gotta be a few, a few that will struggle and a few dogs, so. But everyone's looking for signals in this world. There's too many startups, there's too many opportunities, too many companies to join, there's too many companies to fund. And the network at YC is powerful. And the first time I saw it I was, I'm a small investor in front which just raised 1.7 billion. And I saw the power to matild going through it. I invested in Algolia, which is here, which is worth 3 billion. They were very seasoned French entrepreneurs that raised a seed before YC and gave up a lot to do yc. And they will all tell you it was worth it to get them to the next level. And then later, for example, there's a company called treasury prime which is a banking as a service API invested in. And the best CTO I know in the world is the CEO back in the day at Ecosight, at obesity. I offered him half my stock when we were at 10 million to join me and a half million a year and I would take nothing. He's that good. Okay, but he is, he's a romantic. He didn't join me. We would both be billionaires if he had. But whatever. Chris, if you're watching this dude I love you, but you should have taken the offer I made 60 would have benefited both of us. Anyhow, so then he went and he was a romantic and he did a search company, great engineer, hard problem search, right? It didn't quite work out and he needed a job and I connected him with a great YC founder who was building a company called Standard Treasury. Really early in banking it like way too early. But they got bought by Silicon Valley Bank. He made a little bit of money and anyhow, so he'd done this, he'd done another startup that sold for 200 million where he was the CTO. He'd had an exit, he was wicked smart and he wanted to be a CEO this time and run the whole show. And he seasoned. I mean he's not, he's not old, but he's not young. And he had these wins and he could get VCs to give him the money, right? But he didn't have the whole thing. And I said, listen, just do yc. This will create that missing slice that you're lacking, this confidence, this branding. And he's like, I don't know, I'm not the wrong guy for yc. I'm like, hold on, listen, I've never worked there. I'm going to write your script. And we practiced it and immediately he got in and whatever, in 60 seconds. It's not that hard. He's like, hi, I'm Christine, I was co founder of Merced Systems. We were acquired for $200 million. Then I was the CTO at another company, YC Company, the Treasury, the first one, Standard treasury, the Silicon Valley bank. And it became the core of their existing API. Now I'm running the whole show myself. I want to reinvent how banking is done in the 22nd century. I mean you'd fund that, wouldn't you? Yeah, pretty good. Yeah. So, and I've tried to give that advice again. And then most recently there's another one like Chris. One of the best ctos in my life, right? I will do anything for them. That's starting a company as a first time cto. He's had a billion dollar exit. I another exit, wicked smart. And he didn't have a lot. He had a little trouble raising money, but it wasn't that hard, right, because he's got in the grand scheme of things and I told him to do yc. I said to him, look, you're going to raise the money, but you're missing this slice. And YC is not magic, you know, watching a few things Online and now we can do it online. And I love Gary Tan. I love all these folks. I'm like, it's not so much but it's going to solve this slice for you. And he didn't do it and I'm 1000% sure for him it was a mistake. So if I had to distill it all down. If you think YC is not a good deal, a rip off. If you think you can raise the money. I'm sure there are, you know, Parker from. Sorry, I'm getting tired. What's Parker's second company? Parker Conrad Rippling. Yeah. Parker will tell you to do it. He did it again. He didn't have to. Lots of folks will tell it to you. I say if you're like Parker, maybe don't like if you Parker. I mean it's different. But if you don't think there's benefit at yc, don't do it right. If you're so far along you can, you think it's a cool brand but if you think there's a chance it will add that slice, that's the advice I give it, just do it. So if you're not, it's a rambly answer but I think with some good examples, if you're not sure. I always tell founders, just do it. Even if you have the revenue, even if you have. If there's a missing slice like just go to Harvard, MIT and Stanford, get it done and it's worth it, right? Yeah. Thank you so much. I think I need that slice. Okay, then do it. Yeah, do it.
