[joshpadnick]

Our startup is profitable, scaling, and in the single-digit millions of revenue per year. We don't have any investors but are still capital constrained. The default YC valuation of $125k/0.07 = ~$1.8M is way too low for us, nor do we want the requirement of having to meet with other startups once a week since we're already quite busy.

Does YC have a "funding offering" for startups at our stage?

[mauriziocalo]

> The default YC valuation of $125k/0.07 = ~$1.8M is way too low for us

This is the wrong way to look at it.

Instead, ask yourself: would you exchange 7% of your company to join the YC community and be able to leverage their resources forever?

The answer should be a resounding yes if you think your company will be > 7.5% more valuable if you join YC [1]. Which it should [2]. The $125K is just the cherry on top and just one of many perks of joining YC (albeit a useful one for companies that have no funding/revenues so they can focus 100% on building their product instead of having to worry about paying for housing/food/servers/SaaS).

The vast majority of us who have gone through YC would've done it even if it wasn't for the monetary investment.

[1] See PG's Equity Equation essay: http://paulgraham.com/equity.html

[2] You'll likely even make up for the 7% almost immediately because you'll likely raise your seed round at a significantly higher valuation (> 7.5% higher for sure) than if you hadn't gone through YC. But it's very likely that your company will intrinsically be worth significantly more than that too.

[maest]

This reasoning would be true only if YC was the only investor in town. In truth, the options actually are a superset of:

* Do not raise

* Join YC at a very low valuation and justify it with the nebulous value of the "YC network"

* Raise from any other investor at an appropriate valuation and benefit from the nebulous value of their network.

[IncRnd]

The options are a huge superset of those you listed. Some that you didn't list are bonds, loans, and grants, but there are so many many avenues.

[WA]

Another way of thinking:

Would you exchange 7% of your company forever to join the YC community that might have diminishing returns after several years?

As my sibling poster posted: There is more than one path to success and you make it sound as if YC kinda guarantees success and that all of this is a total no-brainer.

[molsongolden]

I'm not affiliated with YC and they might still be interested in your startup but I'm curious why you are interested in YC at this stage. Is it for the cap table signaling?

Your description sounds like you are beyond the accelerator/seed stage so the standard deal valuation and funding amount are too low. You also mention being too busy to take advantage of the networking opportunities provided by the program.

Being profitable but capital constrained, have you looked at debt financing opportunities? Do you need investors and a network or do you just need cash to accelerate growth?

[joshpadnick]

See my reply to sibling comment for what we're looking for. Re: debt, we've considered it, but our goal is to expand knowing the economic environment might hit us harder than expected. So equity feels like a better fit.

In the end, we're looking for advice, support, and cash.

[sroussey]

Just find the right VC, that’s what they do.

[alehul]

In this case, why would you be interested in YC? What would it offer you?

It seems disappointing that YC's value is no longer qualitatively good advice for early-stage founders and a close-knit community of hackers.

Maybe I'm just jaded, but it appears increasingly corporatized every year. Sometimes it feels like YC might as well be a certificate — just a stamp of approval that provides access to a network of investors and clout. (I'd love to be wrong on this).

[joshpadnick]

> In this case, why would you be interested in YC? What would it offer you?

It's a fair point. The irony is that because our startup is doing well, we'd rather spend our time talking to customers and building the product than pitching to investors. Maybe what we're really looking for is a next-gen take on capital that would look something like this:

* Minimal time needed by us to reach a decision on whether they'd like to fund us

* Known good terms (preferably open source) that we don't have to spend time digging in

* No board seat

* Minimal equity take

* Minimal reporting requirements. We already share financial statements and KPIs with the whole company. We're happy to share those but don't want to spend a bunch of time writing an "investor update."

* Minimal distraction from running the business

* Access to advice from credible individuals

* Access to resources that can help us do things like recruit, setup security policies, etc.

In other words, we want reasonably priced capital, support and advice with the minimum possible overhead. We're happy to share in the upside (by granting equity), but want to spend our time with customers, not investors.

[katm]

Those all sound like reasons to apply to YC. :) We've funded a good number of companies at this point that were farther along when they applied and had millions in revenue (MessageBird, for example, who was just on HN a couple days ago https://news.ycombinator.com/item?id=23624854). I recommend reaching out to some of those alum and talking to them about their experience.

[joshpadnick]

Thank you for clarifying! Do you offer the "standard deal" to such companies, or do you propose something more custom in these situations? I didn't see mention of this on ycombinator.com.

[robertvis]

Happy to chat ;)

[technotony]

Curiously, you just listed a lot of good reasons to do YC. Until the last few weeks of the program you will be encouraged to focus on your business except for the Tuesday evening talks and short meetings with the partners. As this is remote you won't even have to waste time traveling to Mountain View from wherever you live.

Then at the end you focus on demo day which I promise you is the most concentrated and efficient way to meet investors and raise a round on the terms you are looking for (caveat being I don't know how it works remote). Then it's back to grinding on the company. The further along you are by demo day the easier and more efficient your raise will be.

Is that worth 7%? Lots of founders think so. In our batch we had a company that had more than $8MM revenue previously that went on to raise millions on an uncapped note that converted really high. Pretty sure it was worth it to them.

[edhallen]

I co-founded a company that found itself with a similar set of criteria for what we wanted. For us, VC worked out well. We weren't the typical company they saw, but going in with a very clear set of things we wanted from a partner was very helpful. Ultimately, they were high value add when relevant but otherwise let us focus on growing the business.

My guess is it comes down to the right VC/Partner and finding mutually agreeable terms.

[jayparth]

Sounds like you'd get what you want via a large round from an angel investor.

[heimatau]

Why are looking an only YC? Find some other investor because you're already doing what very few companies are already doing.