# Y Combinator ## [What Happens at YC](https://www.ycombinator.com/about/) People often ask us what happens at Y Combinator. Here is an overview of what happens during the YC program and the benefits you get as a YC founder. ### The YC Program YC hosts two 3-month programs — one from January through March, and one from June through August. Here’s what happens during the 3 months of YC: **The Goal** The overall goal of YC is to help startups really take off. They arrive at YC at all different stages. Some haven’t even started working yet, and others have been launched for a year or more. But whatever stage a startup is at when they arrive, our goal is to help them to be in dramatically better shape 3 months later. For most startups, better shape translates into two things: to have a better product with more users, and to have more options for raising money. Startups at all stages benefit from the intensity of YC. That’s probably the best word to describe the atmosphere. For 3 months, it’s all startup, all the time. Everyone around you—us, the other founders in your batch, the alumni, the speakers, the investors—wants to help your startup succeed. In that atmosphere it’s hard not to be highly motivated. And that kind of extraordinary motivation is what one needs to do something as difficult as starting a startup. Many founders describe the 11 weeks leading up to Demo Day as the most productive period in their lives. Though YC continues after the 3 month cycle, and the alumni community is an increasingly valuable resource, those 11 weeks are still the most important thing. You can’t make people something they’re not, but the right conditions can bring out the best in them. And since most people have way more potential than they realize, they’re often surprised by what they’re capable of. **Funding** YC [invests](https://www.ycombinator.com/deal) $500,000 in every company on standard terms. Our $500K investment is made on 2 separate safes: - ==We invest $125,000 on a post-money safe in return for 7% of your company (the “$125k safe”)== - ==We invest $375,000 on an uncapped safe with a Most Favored Nation (“MFN”) provision (the “MFN safe”)== **Groups** During the batch, startups are sorted into 4 groups. Each group is led by group partners who advise the founders in one-on-one and group office hours. Each group is split into 12-14 sections (6-10 companies), so that founders get the benefit of an intimate setting within the larger batch. **Office Hours** Much of what takes place at YC happens during office hours. ==Group partners host group office hours every two weeks and one-on-one office hours as often as founders want.== What startups talk about at office hours depends on the stage of the company and where they are in the YC cycle. **Bookface** Bookface is the platform founders use to connect to one another—imagine a combination of Facebook, Quora, and LinkedIn. Each founder has a profile and can tag themselves as an expert in any topic. If you have a question, need an introduction, or want to poll for knowledge, you can post the request to the forum on Bookface. The knowledge base of the YC community is both broad and deep—the community includes founders who are the world’s foremost experts in everything from security to community building to nuclear energy. **Bootcamp** ==During the first week of YC, we host a 3-day series of tactical talks from the YC team. Topics range from “SEO for Startups” and “How to Measure and Reach Product Market Fit”.== We pack these talks into the first week of the batch on purpose, so founders can spend the rest of the batch focused on building their company. **Tuesday Talks** Once a week we invite an eminent person from the startup world to speak. Most speakers are successful startup founders — the founders of Airbnb, Stripe, Doordash and Ginkgo Bioworks often come back to tell the inside story of what happened in the early days of their startups. Talks are strictly off the record to encourage candor, because the inside story of most startups is more colorful than the one presented later to the public. **Public Launches** ==Once a startup has something built that’s ready to launch, we help founders figure out how to present it to users and the press.== We prepare founders for launches on community sites like Product Hunt and Hacker News, and for their first press pitches and interviews. **First Customers** ==B2B and consumer companies often get their first 40-50 paying customers from the YC community.== With that, you not only get first customers, you get the smartest early product feedback possible. **Demo Day** ==On [Demo Day](https://www.ycombinator.com/demoday), the latest batch of Y Combinator-funded founders present their companies to an audience of specially selected investors and press. We doubt there’s another occasion when such a large percentage of the top startup investors have their attention focused on the same thing.== ==In the weeks following Demo Day we keep in close touch with the startups as they negotiate the fundraising maze, and help them decipher the real messages in investors’ sometimes deliberately ambiguous responses. Often we talk to the investors ourselves, to find out what they’re really thinking about a particular startup. Because YC-funded startups are a known quantity to investors and get introduced to enough of them to create serious price competition, companies tend to get higher valuations than they might otherwise.== ### Beyond the Batch YC doesn’t stop after the 3 month program ends. Here are some of the resources available to YC alumni as their companies grow. **Ongoing office hours** Office hours don’t stop after the YC program. We have office hours year round, and startups from all previous cycles can book time whenever they want. **Executive Councils** These are workshops we put together for the founders of [YC Continuity](https://www.ycombinator.com/continuity) portfolio companies to get advice and learn from the best people in a given function. **Alumni community** Today the YC alumni community is probably the most powerful community in the startup world. It’s powerful not just because of its size, but also because its members have such a strong commitment to helping one another. [A culture of helpfulness has been an important part of YC since the beginning](https://foundersatwork.posthaven.com/the-social-radar-what-i-did-at-y-combinator), and founders know that if they ever come across a challenge they need help with, they not only have the partners at their disposal, they have 6,000+ domain experts they can call on. **Camp YC** Each year, YC hosts a formal gathering of alumni: Camp YC. Camp YC brings together alumni from every batch for a weekend of workshops and summer camp-style activities. Exciting things happen when you bring founders together — ideas are exchanged, deals get made, problem solving happens amongst peers. **Category-Specific Founder Communities** Founders have access to WhatsApp groups and Bookface channels that reach specific communities. There are lists for hardware, biotech, edtech, non-profits, international, women founders, Black founders, Latinx founders and more. **Alumni Demo Day** Active YC founders get an early look at the YC companies in each batch at Alumni Demo Day. The event has also become a de-facto alumni reunion. **Deals** Each YC company receives access to discounts and free accounts for over 100 products. Some of these are highly significant, including hundreds of thousands of dollars of free hosting for each company provided by major cloud hosting companies. **Credibility** When one company in YC does well, the whole community benefits. Because YC has such a strong track record, early adopters, investors and press are often more willing to take a look at YC founders, even if they’re first time founders. ## [The Y Combinator Deal](https://www.ycombinator.com/deal) We have a standard deal for all our investments. We invest $500,000 in every company on standard terms. Our $500K investment is made on 2 separate safes: - We invest $125,000 on a post-money safe in return for 7% of your company (the “$125k safe”) - We invest $375,000 on an uncapped safe with a Most Favored Nation (“MFN”) provision (the “MFN safe”) The MFN safe will take on the terms of the lowest cap safe (or other most favorable terms) issued between the start of the batch and the company’s next equity round. Simply put, we’re giving the company money now but at the terms you will negotiate with other investors later. Both investments happen at the same time; they are not contingent on any milestones. **YC Batch Investment:** YC, the company, and the founders sign the $125k safe and the MFN safe. As part of our standard deal, we also enter into agreements with the company and founders setting out some YC-specific guidelines and rights, including a participation right to invest in the company’s future financing rounds. The $125k safe and the MFN safe will each convert into preferred shares when your company raises money by selling preferred shares in a priced equity round, which we refer to below as the “Safe Conversion Financing” (this will typically be your “Series A” or “Series Seed” financing, whichever happens first). **Safe Conversion Financing:** In a priced round, assuming all of the company’s outstanding Safes were issued on a post-money basis, 3 things usually happen simultaneously but the calculations are ordered specifically: 1. All Safes and other convertible instruments convert into preferred shares 2. A stock option pool is created or increased to a pre-agreed percentage of the company 3. New money is invested in the company YC’s $125k Safe will convert in the priced round into 7% of the company’s equity (including any existing option pool) after all the Safes and other convertible instruments have converted in conjunction with the priced round. YC’s MFN Safe will automatically convert in the priced round on the terms of the lowest cap Safe (or other most favorable terms, such as a discount) issued between the start of the batch and the priced round. The priced round itself, and the creation or increase of the stock option pool, will dilute YC’s ownership. We have a participation right pursuant to the YC Agreements to purchase up to 4% of the new money securities issued in the financing. If we exercise our participation right, step #3 then includes our additional new money investment. **Additional Future Financing Rounds:** When you conduct later rounds of financing, we continue to have a participation right to purchase up to 4% of the new money securities. In the case that our then-current ownership is less than 4%, our participation right is capped at that amount (so we will never have a super pro rata right). We invest in US, Cayman, Singapore, and Canada corporations. We have founders who apply to YC from all around the world and many have already incorporated in their home countries. We introduce founders to lawyers who can work out the best process for creating a company (or parent company) in a jurisdiction in which we can invest. Often, founders will keep their original entity as a subsidiary of a new parent company and the original entity will continue to operate in their home country. Non-profits will receive a donation of $100k. We do not receive anything in return for our donation. In addition to the investments described above, YC companies receive access to a wide range of resources. Here is a [full list](https://www.ycombinator.com/why) of the benefits and resources available to YC founders, including the [Series A program](https://www.ycombinator.com/blog/yc-series-a-program/), Post-A Program, [Work at a Startup](https://www.ycombinator.com/jobs?utm_source=yc_deal) and the [Growth Program](https://www.ycombinator.com/blog/growth-stage-program/). Finally, it’s sometimes hard to compare offers from different accelerators. Importantly, we don’t charge any fees to the companies to be part of YC. We understand the complex reasons that cause some accelerators to charge fees to the companies that participate in their programs, and while we don’t think it’s bad behavior, obviously founders should deduct those fees from the investment when they’re thinking about those offers. We also try hard to avoid any “gotcha” terms like enhanced returns in downside exit scenarios and similar such provisions.