[sytelus]

You are massively undervaluing YC. It's not just "advice dispensed over diner", there is lot goes on [1]. In startup world, there are just too many bad decisions you can make at any point in time and even just 5 minute advice from an experienced person who has literally seen it all 100s of times is worth all of the 7% cut that you give to YC. In the book[1] you will see several cases described by author where founders are at critical juncture such as what features to work on, what to pivot, which investors to reject and so on. YC also preps you for demos, protects you against signing bad terms and exposes to pretty much all investors that matter in business in one fell swoop. This is all in addition to $120K seed money that they are pretty much guaranteed to lose. If your friend was lending you $120K, wouldn't you offer 10% of your company? IMO, YC's 7% cut is far more reasonable.

Next, you are also massively undervaluing Susan's work. Did you read that she kept failing for 2 years and still kept at it? If you were already rich, would you go through that kind of hustle as opposed to enjoying your margarita on a private island? Did you also read that she was pregnant while making her attempt and with 3-year baby in hand? Do you have any idea how is it like to be pregnant and working on something as taxing as startup while also taking care of 3-year old? If you don't I humbly suggest to ask this to your mom.

Next, Loopt was innovative in its time but unfortunately way too easily and quickly copiable. Being still able to sell that is actually a business success and tells you something about Sam's ability to win over investors and break a way against odds.

[1] http://www.amazon.com/The-Launch-Pad-Inside-Combinator-ebook...

[valleycynic]

Read their own terms. They don't provide you with office space, living space, or other necessities that even other, less vaunted incubators do. And the seed money used to much lower: $17,000 (a few months salary).

Again, 7% is an enormous chunk of a company, and for a firm like Dropbox, such a stake runs easily into the millions. YC on its face has always been a terrible deal, except it isn't, because YC is the first step in a sequence that ends with you getting bought by Facebook or Google regardless of whether you actually deserve it, and that's why people sign up--not to hear advice from Sam Altman.

And I wasn't devaluing Susan's work at all. My point was that for other women with similar ambition and talent but without similar financial independence, YC would be a non-starter.

[ig1]

It doesn't make sense to evaluate historic seed stage valuation based on current valuation. Any angel investment looks like a bad deal retrospectively for a billion dollar company on that basis.

Investments need to be evaluated on the basis of the valuation at time of investment.

Certainly there are many companies who could raise money at higher valuations elsewhere who go through YC, but almost none of them could raise at a >$15m valuation (YC doesn't typically invest in post-A companies).

[jscheel]

Financial stability is always an issue for founders. Any founder that has an alternative source of income, a large reserve of liquid cash, or a small living expense (NOT a family to feed), is going to have more flexibility.

[ajju]

"that ends with you getting bought by Facebook or Google regardless of whether you actually deserve it"

..and this is because Facebook and Google are not independent companies with their own self-interest at heart, but stooges of YC remote controlled by a secret cabal of YC alumni?