Well, the entire YC program is structured around the two three-month events of the year. YC isn't just a "congrats, you got accepted to one of the most prestigious seed groups ever—here's a bunch of cash at an insulting valuation" but it's also about the mentoring and demo days, which I would argue are worth more than the "live-on" money.
Regular seed funding groups can work that way, sure. But they're for different purposes.
On the one hand it's seed stage, the very large majority of seed investments turns out to be wasted money, so there is a premium to be expected.
On the other hand $20K means that the startup will be looking for money again in the very near future, and getting follow up investments is a very time consuming job.
Then there is the fact that YC makes a bunch of very invasive requirements of the 'founders', they have to basically give up their life and family for this chance to be a player. That's a decision everybody makes for themselves of course, but you have to balance what YC can give you (a one time shot at the jackpot) to what you've already got.
I think this is why YC skews to younger people, the price to pay for a chance like this is a lot smaller when you're younger.
Also, older people tend to be unimpressed by $20K, especially if it is for multiple founders.
Insulting, really? so you have 3 guys, and a business plan. you get $20K for say, 6% of the company. Are you really saying a $300K valuation on a company that is 'just an idea' is insulting? Personally, I'd call that high.
But yeah, you are right. it's not about the money. It would probably make economic sense for me to give 6% of my company to pg, even without getting any cash, just for the marketing effects.
I'm sorry, you're right. $20k is not a lot of money, but I did overlook the fact that most of the ideas are just that—ideas, versus an actual built business which seems to be in the minority. (Hey, at least it's better than Shark Tank.)
I stand corrected, though it wasn't the main point.
