[jroseattle]

> One reason everyone flocks to YC is because everyone knows that YC is fair and trustworthy.

Another reason is that YC is the gold standard, and having that endorsement opens all kinds of doors.

But simply put, YC is a better mousetrap compared to the old-boy capital firms.

[kamaal]

>>having that endorsement opens all kinds of doors.

This might be the most important of all things. People pay big money to get into Ivy Leagues because its assumed the smartest study there, and then come out even better. Access to a rich, powerful and well connected Alumni, which has a mutual interest in defending each other to keep the value of their network high is best thing you can ever have in your career.

Probably not many people get into YC for the initial money these days. Its just access to that network and the alumni.

[jacquesm]

> Another reason is that YC is the gold standard, and having that endorsement opens all kinds of doors.

Yes it does, but it actually should not. By becoming an endorsement YC loses a bit of its effectiveness and the eventual rate of success will probably decline measurably.

Ideally investors would properly investigate the companies they intend to invest in rather than to just use YC as a way to increase their probability of scoring a hit. That's just another variation on the 'dumb money' theme and the field as a whole will lose from such inefficient allocation.

It will put fewer wood behind more arrows. Even though YC companies are probably already over-valued it would be more efficient if VC capital would concentrate on those companies the VCs actually believe will succeed rather than to see these blanket investments in anything that moves that has been backed by YC.

It even matters to the founders.

As long as there is a glut of capital chasing these companies a number of companies that did not go through YC will likely be passed up on simply because they don't have the stamp of approval that YC offers.

This is a gap that might be large enough for a smart VC to exploit. Ignore the YC stamp of approval, treat all applications equally and invest in a couple of dark horses that did not make it to YC for various reasons (geography, timing, bad fit), but to have their application roughly around the same time as YC has theirs.

That way they can use the YC 'vetted' companies as the benchmark against which they can evaluate their batch of 'dark horses' substantially increasing the hit rate of the latter without having to compete with all the other investors in the YC batch.