Getting into Y-Combinator in 2018 was a defining event in the history of RevenueCat. It was also quite impactful for Jacob and me as founders. I want to believe we would still be around even if we had not gotten into YC, but I am sure the company would not be where it is today. The amount of learning and building that we experienced during those three months is really difficult to replicate.
But I am not here today to convince you to apply to YC (you should, though!). I think it is an extremely good exercise for founders, particularly to start questioning things you might have not thought about yet, and to align with your co-founders. But I am not even going to tell you how you should write your application. Dalton Caldwell has a really good video about it. Also, full disclaimer, I did not write the original application for RevenueCat, so what do I know.
However, I have helped a bunch of founders reviewing their YC applications for the last couple of years. And I have certainly seen red flags that reduce chances of getting accepted. Most of the founders were fellow Spaniards (there should be more Spanish companies in YC!), hence I thought it could be a cultural thing. I tweeted about it in Spanish. But I figured there might be some general points that could benefit any founder considering applying.
Perhaps there is something particular to your startup that makes these points invalid. But in general, and in my humble opinion, I would watch out for these when submitting your application.
1. Not being clear
Answer exactly what was asked. Don’t overextend. Don’t answer something that will have to be answered again in the following question. Read the whole application form completely before starting to write.
As an example, I rarely see an answer to Describe what your company does in 50 characters or less. that is actually 50 characters or shorter. Pay attention to these details. And try not to use buzzwords or technical jargon to describe what you are building. You are not going to impress these people by using them, they’d rather understand exactly what you are building.
Don’t say “We are disrupting wave prediction technology by building a bleeding-edge social platform for surfers based on gamification and advanced machine learning algorithms”. You can always rewrite it as a more concise, 50-character one-liner. Something like “Accurate wave prediction for surfers”. There will be time to explain how you are building it in detail later (but again, don’t use buzzwords). Remember this application is not an ad for your company.
2. Unfair cap tables
This might be particular to Spain, but I have seen a surprising number of applications with an unfair equity distribution. I have seen more than one startup with four co-founders (three business people, one technical person) and a 30-30-30-10 split. When I point it out, the common answer is that the technical person came a little bit later, or did not originally come up with the idea.
The reality is that building a startup is really, really hard, and incentives should be aligned. You can always use other mechanisms like vesting for protection. But in my opinion, the split should be as equal as possible. It’s not about what has been done or who came up with the idea, it’s about the next 10+ years.
3. Not having a technical co-founder
There are exceptions, and I have seen counterexamples in YC. I am probably biased too. But if you are building a technical product, you’d be better off with somebody technical by your side. This is particularly true if you are building an innovative product.
In the early stages, you will have to iterate on the product a lot and make quick changes. Outsourcing the development of your product is rarely a good idea.
4. Not knowing the metrics of your business or space
Self-explanatory. Be transparent and don’t hide the negative parts. Don’t claim non-recurring revenue as recurring. Also, make realistic predictions of TAM and don’t undervalue or ignore competitors.
5. Not spending enough time, rushing the application
As mentioned in #1, pay attention to detail. Be consistent. Don’t report one metric in USD and the next one in EUR. They understand you might not be native, but pay close attention to your English. If you don’t feel super confident, get it proof-read. Get it reviewed by your co-founders and existing investors, advisors, or friends.
Make sure it is complete. People miss some questions! The most common one is the video. It does not have to be a Hollywood production, but don’t forget to attach the 1-2min video with your co-founders.
6. Doing it for the wrong reasons
There are countless reasons to apply to Y-Combinator. But “we are running out of money, and the funding would be great”, though brutally candid, might not be the best answer.
The same applies to why the founders are passionate to tackle that particular problem. Make sure to properly communicate why the team is the right team. It should look obvious that not solving it would be a bad idea. There are multiple reasons, most commonly, expertise about the problem or the actual solution. But there must be one good reason.
7. Being late
Start as soon as possible. A good application requires a lot of time and multiple rewrites. If you are asking for feedback (you should!), try to avoid last-minute favors. You can submit late applications and still get in, but you have better chances if you apply before the deadline.
8. Directly asking for a recommendation
In general, the YC community is always excited to learn about new companies and ideas. A decent number of YC founders are kind enough the help reviewing applications or helping to prepare for the interview for free. We are extremely thankful to the founders that helped us with feedback and mock interviews.
Always adapt and be thankful for the time offered, most alumni are extremely busy running their companies. Avoid asking for a recommendation, better ask for feedback. At the end of the day, alumni have a reputation to maintain, and they might not be comfortable risking it for somebody they don’t know. Don’t try to network your way in YC. Spend your effort in building a better company instead.
I hope these points were helpful and make your YC application more likely to succeed. If you are applying and need feedback, feel free to reach out! I am always happy to help, schedule permitting. Bonus points (but not exclusive) if you are an under-represented founder or from Spain.
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