“I’m probably the only person hoping the recession wouldn’t end.”
With this one sentence, Paul Graham captures the opportunistic spirit and fearless ambition emanating from his unique, “don’t call us an incubator” venture capital creation, called Y Combinator (YC). While not widely known, YC is growing a cult-like following among young programmers looking for a stepping stone on their path to conquering the world.
Who, What, Y Combinator?
Y Combinator founder Paul Graham is best known for selling Viaweb to Yahoo! (Nasdaq: YHOO) back in 1998 for about $49 million. Viaweb subsequently became the backbone of Yahoo! Stores.
In 2005, Graham launched YC as an experimental bootcamp for talented and ambitious hackers. It has since grown into an organized, semiannual program that provides participants with weeks of in-depth mentorship as they develop their startup. The program culminates with a final unveiling to a select group of investors at “Demo Day.” YC also offers seed funding, usually doling out $5,000 per team member in addition to $5,000 per company formed. In return, YC receives a 2%-10% equity stake in the venture. This may seem like a paltry sum, but the goal is to provide just enough “bread” for the teams to get their ideas up and running without ruining their competitive appetites.
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