[dxjones]

For 50k they take 10% equity, valuing your startup at a tiny 500k, plus you have to leave the country. You give up a lot.

Why not just pitch to Dave McClure's 500Startups? You can get started with $10k for 1% equity, valuing your startup at $1M. More funding is possible, plus space, mentors, ...

http://500startups.com/

[ceejayoz]

At ~$20k for ~6% equity, YC would seem to be an even smaller valuation than $500k, right?

[rcamera]

I doubt that YC measures their investment based on valuation. Imagine the companies they invested that had just the idea formed. How do you valuate that? Even in a stable business, valuation is still a bunch of guesses, how much future cash flow the company will generate, what will the investor opportunity cost be in X years, etc...

I would think more of a bet instead of valuation when thinking of seed investment in a start-up. What I would say they do is standardize their bets, using their history and benchmarking theirs with other investors. YC's standard bet is around ~$20k for ~6% equity, that's all.