Transforming with Y Combinator
Y Combinator is a startup accelerator that offers short-term programs to boost startups. It uses a sweeping network of mentors to teach business leadership, investors to provide initial funding and opportunities for future rounds, and a whole system of startup tools and resources to help new companies better execute their visions.
It can be a “golden ticket” moment for startups to discover the accelerator has selected them, but it’s far from a happenstance opportunity provided by a random chocolate bar. The current collective valuation for the companies taken under YC’s wing over the years is well over $500B, which means the mentors and investors know what they’re doing when they choose startups to bring into the program, which means you need to know what you’re doing when you pitch them.
Application and Acceptance
Thousands of companies apply to be a part of YC’s twice-annual interview process, but their finely-tuned selection method whittles that number down to just a couple hundred. Nearly half of the companies that YC funds each year are still in their primordial stages and may not be much more than an idea, but Howdy was already operational when we applied and got accepted. It doesn’t matter what stage of development a company is in when applying to an accelerator; what matters is that its mission and logistics make sense to the investors.
The selection process is rigorous, but we learned during the consideration process that proving our traction as a company went a long way in helping investors decide if they wanted to get on board with Howdy’s mission. Trying to tell the future from a market’s behavior can be tricky, so investors will often try to determine a company’s viability by gauging the cohesion and compatibility of its founders like YC did with me and my co-founder Jacqueline. Interviewers would interrupt our flow and try to get us to stumble on our words, but we didn’t relent with our pitch because we knew what we were about — and that’s what they were really looking for.
Key Lessons
Our initial push to get involved with YC came from a decision regarding what direction we wanted to focus on as a company — either enjoy the profits from the fruits of our labors now or use the money we made to re-invest in ourselves and expand with the help of an accelerator. Obviously, we decided to expand, but it further proved the importance of a generally applicable piece of business advice: the best time to raise money is when you don’t need it. If the company had scrambled to get attention from investors, it would have put a different sort of stress on the process.
The YC partner team helped us process strategic and tactical challenges, which are tied directly to the partners' experience as successful founders themselves. They have an incredible mentorship program, and they can help you stay on track to meet the goals you set. Still, there’s nothing magical about accelerator programs that makes you a better CEO or leader just by aligning with them. You get out of it whatever you put into it.
Impact on Howdy.com
With the help provided by YC’s investment, we were able to maintain a stronger recession buffer around Howdy’s budget. Our bread and butter is remote work, which has seen a significant global uptick since the start of the pandemic. However, like any other market, it has its ups and downs. Overcoming growth rate difficulties would usually be a lot rockier. Still, we have maintained our focus on expanding and strengthening our teams in every city because of professional guidance and investment from YC.
Advice for Applying to an Accelerator
If you’re considering getting your company involved with an accelerator, I recommend getting a few ducks in a row before taking the plunge. Here’s a few quick tips from my own experience:
- Know your worth
If they see you value yourselves, they will value you
- Polish your pitch deck
If you can’t pitch it clearly and concisely in 60 seconds, you’re not ready
- Lose the scarcity mindset
Constantly anticipating disaster can keep a company alive but can directly impact leadership
- Your network may be your future
Everyone in your circle may one day be a future client, a future collaborator, or a future investor
Are you trying to streamline your pitch deck for an accelerator? Check out my co-founder Jacqueline’s video and blog about tightening up your deck and communicating your business ideas more clearly.
