In 2018, startup accelerators are no longer a new topic. Startup accelerators have become incredibly popular for early stage founders and investors. Over the last five years, seemly everyday a new accelerator popped up for a new city, region, or industry. We are now at the point where the startup accelerators themselves being classed into winners and losers.
Having participated in Y Combinator, I can tell you from first hand experience that our company benefited greatly from participating in a startup accelerator program.
My co-founder, Matt Lenhard and I started LendEDU in 2014, as a marketplace for student loans. We first took part in the Iowa Startup Accelerator in 2014 before getting accepted into Y Combinator in 2016.
When we were applying to Y Combinator, we were trying to figure out how to continue growth, stabilize our revenue over our lean seasons, and drive more traffic to our site.
Y Combinator was attractive because of its stellar reputation as one of the top startup accelerators. Since 2005, Y Combinator has funded 1,900 startups and created a community of over 4,00 founders. The combined valuation of all these companies is $100 billion. These aren’t companies that you’ve never heard of before either – they include Airbnb, Dropbox, Reddit, and Stripe.
Essentially, Y Combinator invests money into a large number of start-ups twice every year and requires that the founders move to Silicon Valley for 3 months during which they help the companies shape and refine their pitches and business plans in preparation for Demo Day. On Demo Day the companies present their business ideas to a group of carefully selected investors and other business people.
Y Combinator is so successful because their staff, program, and network are unprecedented. They are able to connect businesses with some of the top investors in their sector and they’re also able to help them refine their business plans in order to streamline their companies and create a better chance of success. These are the benefits of Y Combinator that are common knowledge – but there are a lot of other benefits of participating in the Y Combinator accelerator that don’t get talked about as often.
As someone who has been through the program and been able to take advantage of all of the resources that it provided, you might be wondering what else I found valuable about the experience? Here’s 3 lesser-known ways Y Combinator transforms companies:
Each round, Y Combinator accepts about 100 companies and a few hundred founders of those companies. You might think that would create a competitive atmosphere and so it wouldn’t lead to lasting relationships. You would be wrong. While there is certainly a competitive environment, the environment itself helps to build lasting relationships. One of the best things about Y Combinator is that you get to make important connections with other founders.
Some of my fellow founders have become close friends, others have become sounding boards. Still more have become customers. Y Combinator is an incredible opportunity to network with some of the best and brightest of the next generation of business leaders
You’ve heard of Facebook, but you likely haven’t heard of Bookface. Bookface is the internal platform that Y Combinator founders use to connect. It’s like a combination of Facebook, LinkedIn and Quora but only for founders who have been through Y Combinator.
When you get accepted into the program, you can set up a profile and introduce yourself. You can then connect with the community if you have a business question, or if you’re looking for an introduction to a contact. You can ask just about anything you want and odds are someone in the group has spent hundreds of hours thinking about your question. Here are just a few of the question topics I’ve posted to the community:
– How to Value a Domain Name?
– Does anyone have intros to Robinhood or Simple Bank?
– How are you handling dependents and health insurance?
This creates a dynamic Y Combinator founders’ community that you take with you after the program is over. The best thing is that everyone on the platform is an expert in different areas – and you have access to them.
If you’ve hired staff recently, you know that the war on talent is fierce. Your company depends on having an amazing team – but so does every other company. Having participated in Y Combinator gives your company a hiring edge. After all, everyone in the startup community knows that Y Combinator is an incredibly selective program and that only the best companies get approved.
They also know the connections that can come from participating in Y Combinator can pay off big time down the road for a company. So, if an employee is trying to choose between working for your company or another startup down the block, they will have more faith that your company will be better funded and more successful.
Also, it is important to add that Y Combinator created an awesome program known as Work At A Startup where YC companies get access to a pipeline of talented individuals looking to work at Y Combinator companies.
For us, getting accepted into Y Combinator was a dream come true. If you are interested in participating, you will definitely want to take advantage of all the well-known benefits that include funding, connecting with investors, and getting amazing mentorship. But you will also be able to take advantage of the less well publicized benefits too. It can have a significant positive effect on your business. It’s helped LendEDU accelerate our growth after we participated in Y Combinator.
A guest post By Nate Matherson, Co-founder and CEO of LendEDU.com
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