Peter Clark

7 November 2022

Should you do Y Combinator again

Startups

I first went through Y Combinator in 2011, my company, userfox, didn’t work out, and I spent about a decade licking my wounds before getting the itch to start another company.

In 2021 we’d signed a pre-seed termsheet for Journey and I decided … to go through Y Combinator.

I’ve written previously about the benefits of Y Combinator (YC) and how it’s evolved over the years — YC makes an investment not only in your startup but also in the founders, many of the benefits of being a YC founder live on with you long after your startup has made something people want.

For example after userfox failed, I was able to continue browsing and posting on Bookface (the YC forum) and even recommend new YC applications to partners. Being able to read and post to Bookface is supremely valuable, and I often see founders politely recommending their new companies in comments, even if that new company is not a YC funded company.

Which begs the question: if you’re a YC funded founder whose company doesn’t work out, should you re-apply to YC in the future?

Y Combinator would obviously encourage those founders to apply — from their point of view, there is no downside to you applying — and its worth remembering that getting into YC once doesn’t mean you’ll get into YC a second time. I can see both sides of this, on the one side you’re familiar with the YC way, but on the other side, well, YC is familiar with you.

But if you’re a founder who already has access to YC resources like Bookface, is it worth doing YC again, a second time?

The Investment

Naturally the cash that YC invests in your startup is as valuable the second time as the first time.

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!

Bookface Access

YC founders have access to Bookface in perpetuity but you can really only submit a post introducing your company if its a YC funded company. Similarly, I think the community is slightly more forgiving if you promote your YC funded company than if you’re promoting your non-YC funded company — but I think it’s fair game either way assuming it’s highly relevant.

Considering your Bookface Launch post is a small big deal, this is a small but tangible benefit of doing YC for your new startup.

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies

YC Founder Status

When I was going through YC the first time, telling people I was a YC graduate was a moment of pride for me, and this is one of those (small!) benefits where going from not being a YC graduate to being a YC graduate is a big jump, and obviously it’s kind of moot if you’ve gone through YC twice. As such, this benefit doesn’t really apply for your new startup.

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies
YC StatusGamechangerN/A

Work at a Startup Posts

Work at a Startup is a burgeoning public database of jobs at all YC companies — it’s a great way to find an internship or a new job, and for Journey it has been a primary driver for our recruitment — of 6 people we’ve hired, 4 were from Work at a Startup!

Recruiting is so hard for startups that you need all the help you can get. There’s also another benefit of this benefit which is that being a YC startup makes you more attractive to potential employees because it’s a sign that you’re moderately legitimate.

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies
YC StatusGamechangerN/A
Work at a StartupGamechangerGamechanger

Social Proof

Being a YC company gives you a lot of validation externally — it helps woo potential recruits, it adds validity to potential investors, even the press is more likely to talk to you if you've been funded by YC. Some of these are mitigated by being a YC founder even if your company isn't, but it's still a meaningful boost to a company to be a YC company.

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies
YC StatusGamechangerN/A
Work at a StartupGamechangerGamechanger
Social ProofGame ChangerVery useful indeed

Investor Database

This one is a very big one since you only have access to the YC Investor Database if you're the founder of an active YC company. This seems fairly reasonable to me since it's very sensitive data and the kind of thing where there could easily be a lot of naval gazing at the entries. If you're not the founder of an active YC company, you will not have access to this database.

I don't necessarily think this database is quite the game changer as other benefits of being a YC company — if you're at the point of vetting and potentially rejecting investors based on their reputation, something is probably going pretty well, but I do think it is incredibly useful!

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies
YC StatusGamechangerN/A
Work at a StartupGamechangerGamechanger
Social ProofGame ChangerVery useful indeed
Investor DatabaseVery usefulVery useful

Demo Day

One of the largest benefits of doing YC ... presenting at demo day! Obviously if you're not running an active YC company, you will not be able to present at demo day. What does that mean? The benefits of demo day are obvious:

  • Massive investor interest

  • Great stage to introduce your product

  • Opportunity to really refine and enhance your pitch (from the prep work in advance)

Now, if you're a repeat founder doing YC a second time, maybe demo day isn't critical — maybe you can raise money regardless! That is a big gamble but with fundraising I always believe in de-risking the process as much as possible, so you really want this in your belt.

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies
YC StatusGamechangerN/A
Work at a StartupGamechangerGamechanger
Social ProofGamechangerVery useful indeed
Investor DatabaseVery usefulVery useful
Demo DayGamechangerGamechanger

Hacker News Launch

One of the lesser spoken about benefits of YC is being able to launch on Hacker News — you may think this is not a big deal, but it is! It was our biggest day of usage and signups until we launched on Product Hunt 6 months later. Here is an example of a post.

We had 50+ comments, 140+ upvotes, and over 100 signups to our product.

If you're not a YC funded company, you're still able to do a "Launch HN" but there is far less chance of breaking through onto the front page without the having the YC flair. Now, will this change the course of your company? Probably not. But it is a ton of usage and attention, for free!

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies
YC StatusGamechangerN/A
Work at a StartupGamechangerGamechanger
Social ProofGamechangerVery useful indeed
Investor DatabaseVery usefulVery useful
Demo DayGamechangerGamechanger
Hacker News LaunchVery usefulVery useful

12 Week Program

Last but not least .... the advice and the actual YC program. Given how much other stuff we've discussed, it's almost easy to forget that the advice and 12 week program is why people apply for YC. I think advice from smart people is always useful — I found that the advice I received regarding Journey was arguably more useful than when I went through YC the first time because I had more experience and was able to hone conversations even further.

Help others (kinda)

I also felt that my experience of being a founder and fundraising previously was useful as a very small and insignificant voice in the room when companies were discussing tactics amongst themselves. You could easily fall into a mindset of thinking that you know the advice because you've gone through YC before, but I found the opposite — I just viewed this as the next 12 weeks of advice (admittedly with a decade summer break between them!)

Check yourself

I found the program incredibly useful as a way of checking yourself. It's easy to think you know what you're doing the second time around, and having Group Partners clearly explain why you're probably wrong is supremely useful.

Set the culture

One of the things I wanted to do a second time around as a founder was be more deliberate about values and culture, as my friend Alex Maccaw wrote:

I found that YC was a really good way to instill a culture of "move fast" and "build something people want" and generally be a thoughtful startup — the 12 week program is a great way to build a launch pad for your startup, and I think it'd be hard to recreate this beyond YC.

First time doing YCSecond time doing YC
InvestmentCash is cash!Cash is cash!
BookfaceGamechangerYou can only “launch” YC companies
YC StatusGamechangerN/A
Work at a StartupGamechangerGamechanger
Social ProofGamechangerVery useful indeed
Investor DatabaseVery usefulVery useful
Demo DayGamechangerGamechanger
Hacker News LaunchVery usefulVery useful
12 Week ProgramGamechangerGamechanger

Your co-founders

Another important thing to remember is that if you get into YC, all of the founders of the company become YC founders — and thus get all the benefits of being a YC founder going forwards. I started Journey with Anil and Brendan, who did not previously go through YC — and having experienced the value of YC in 2011, I was really excited and keen for them to become YC founders! So whilst I personally got slightly less benefits at doing YC a second time, not only did Journey as a company benefit, but also my co-founders got the massive boost of now becoming YC founders.

In Summary

Y Combinator is actually as valuable the second time as the first time if you're focussed on building a great product and ensuring lots of people discover it. You'll be able to prototype and iterate an MVP amongst the YC community (via Bookface), launch it to the world via Hacker News and then raise money for it via Demo Day. You'll also have gone through a rigorous 24 week (since you'd done YC twice) program so hopefully can put your best foot forward post raise.

Meanwhile, if you declined to do YC (the second time) — none of the aforementioned stuff would be possible. Sure you'd be able to say you were a YC founder on your "Team" fundraising Journey step, but beyond that a lot of the truly impactful YC benefits wouldn't apply.

Now, do not get me wrong — being YC alumni is supremely useful, in the same way I imagine having a Harvard MBA is useful if you work in consulting. The YC alumni resources are super relevant and thorough for anyone working in tech, at any given time.

YC Founder deciding to do YC again ...
Confidence at reaching Product-Market-Fit →Under 90%Over 90%
Do YCYour call
Confidence at raising $10M+ →Under 90%Over 90%
Do YCYour call
Co-founders already done YC? →NoYes
Do YCYour call

If you've gone through YC before, I think a good simple litmus test for if you should do YC is: is your confidence at achieving Product-Market-Fit over 90%? If it is over 90%, maybe you do not need YC. If you're able to raise a $20M Series A at the inception of your company, maybe you can skip YC!

Otherwise — being a repeat YC founder actually brings you back to just being a regular founder — you should do YC because it'll enhance the chance of you finding Product Market Fit through advice, collaboration and money.