[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.