Y Combinator Application Breakdown and?Guide
Advice for every question on the YC app from a late-stage YC?alum
Hello! My name is Nick and I went through Y Combinator (YC) in Winter 2018 with my cofounder Finbarr Taylor for our software startup, Shogun . Shogun is currently at Series C stage, with 35,000+ customers and $115M in capital raised from Y Combinator, Initialized Capital , VMG Partners , Accel , and Insight Partners .
As a YC alum, I get a decent amount of questions about the application process, and often review applications from folks in my network. A lot of the advice I give is redundant, so this is me “open sourcing” it for everyone.
Worth mentioning: YC gives their own advice on how to approach the application, and I recommend you read it. Here’s the link: https://www.ycombinator.com/howtoapply/
Also, the questions in the application can change from batch to batch, and the application is publicly available here: https://www.ycombinator.com/apply/
Please note that I do not represent Y Combinator, nor do my opinions reflect the opinions of YC or the YC partners. This is just my advice on how to think about crafting responses.
Application Questions
Before we jump in, please note that YC questions are subject to change, and the application adjusts based on your inputs (ie. if you respond “No” to the question “Do you have revenue?”, the application won’t show you all the revenue related questions). If you don’t see one of these questions on your application — don’t worry.
Here we go.
Company Section
Company name:
This question is self explanatory: put the current name of your company or project. Do not spend a bunch of time stressing over the name for your startup, as it doesn’t matter much, and very well may change.
Describe what your company does in 50 characters or?less.
Being able to concisely articulate what your company does is really important. This may seem easy, but it’s not. Here are some tips on crafting your 50 character response:
Don’t worry if it’s not perfect. This is one of the things Y Combinator actually helps with. Just make sure your response is 50 characters or less.
Company url, if?any:
Drop a link to your website. If you don’t have a website yet, consider how quickly you can create one that looks decent. You don’t need to be technical to create a great looking website these days. Here are some tools to consider:
Even if you don’t have a product yet (i.e. a web application), the website can still be a part of your MVP. This isn’t hard, especially when there are templates like this: https://webflow.com/templates/html/matte-saas-website-template
If you have a demo, attach it?below.
Ideally you have a Minimum Viable Product (MVP). In my experience, the attention span for a product explainer video or demo runs 60 seconds, 90 seconds at most. The shorter the better.
If you’re looking for a format, try this:
Don’t worry if the video isn’t perfect or refined; it shouldn’t be.
Please provide a link to the product, if relevant.
I recommend applying when you have an MVP, but this isn’t a hard requirement. YC will consider applicants at ideation stage, but the more traction you have; the more compelling the market validation is.
Drop the link to your product (ie. web application, mobile app, website, etc.) in the input field.
Include login credentials (username and password) if access isn’t public.
What is your company going to make? Please describe your product and what it does or will?do.
I think this question trips up a lot of people. You did it before in 50 characters, now you can use more words- but brevity is still key. I recommend answering this question in 2–4 sentences. If you find yourself going beyond that, do another pass to see if you can make it shorter.?
Consider a format like this:
Where do you live now, and where would the company be based after?YC?
Simple question. State the location(s). Response should be no more than 2 sentences, ideally 1 sentence.
Founders Section
Please provide some details of the cofounders in the?startup.
Most of the detail inputs are self explanatory. For each cofounder:
Don’t BS if you’re non-technical; it’s fine. Being dishonest is not. Go by their definition, and only answer yes if you are a programmer, engineer, or scientist who can build the product without outside assistance.
When adding the details for each cofounder to the application, note the clarification: “Founders must have at least 10% equity in the company.” This should be a clue that major imbalances in cofounder equity can be a consideration. Why? Because the journey is probably 10+ years before any meaningful outcome, and the founders will be diluted along the way.?
Model the dilution with your cofounders at the beginning to avoid surprises. Try it with these assumptions:
If you need to adjust equity, now is a good time to do it. Startups are usually an arduous endeavor, and you’ll want solidarity with your cofounders. Also, cofounder disputes and breakups are one of the top reasons startups fail.
Please record a one minute video introducing the founder(s).
This video isn’t a pitch video, they’re just trying to get a sense of who you are.
Part 1: Founders introduce themselves:
That part should take about 30 seconds.
Part 2: Small bit about the company
That part should take about 30 seconds.
Keep it under 1 minute in total.
Who writes code, or does other technical work on your product? Was any of it done by a non-founder? Please?explain.
Part one: “Who writes code, or does other technical work on your product?” State the person or entity that has done the R&D work on your product, specifically the engineering and the design. Make clear their relationship to the company. Address this part of the question in 1 sentence.
Part two: “Was any of it done by a non-founder? Please explain.” Ideally all of the R&D work was done by a cofounder. If not, it needs to have been contracted properly and you need to be the owner of the intellectual property. If this isn’t the case, you can still apply, but make sure to answer this question thoroughly and truthfully. Address this part of the question in 1–2 sentences.
Are you looking for a cofounder?
(This question may appear if you’re applying as a solo cofounder.)
If you are looking to add a cofounder, state so, and include 1–3 sentences on what role you’re looking to fill (eg. CTO), and what your efforts have been thus far. If you’re not interested in adding a cofounder, just state: “Not at this time.”
Worth mentioning that while YC certainly accepts solo founders, they know that the startup journey can be tough to go alone, and actively support cofounder matching. They even have a platform for it: https://www.ycombinator.com/cofounder-matching .
How long have the founders known one another and how did you meet? Have any of the founders not met in?person?
There are 3 key pieces of information for this response. Here’s a suggested format:
The response to this question should run 4–5 sentences in my opinion, which is on the longer side. YC likes to get a sense for cofounder dynamic, as it has a significant impact on the success of the startup.
Progress Section
How far along are?you?
This question is looking specifically for the data on your traction. And this is where a lot of applicants tend to add fluff. Stick to the facts of what has happened, and not what you believe will happen. Examples of data to include here:
It can be really tempting to go into persuasion mode, but what will make you stand out even more is an objective attitude and focus on data and facts.
Keep the answer 2–5 sentences. Make sure to be concise.
How long have each of you been working on this? How much of that has been full-time? Please?explain.
Part 1: “How long have each of you been working on this?” You can start counting from the first line of code, the incorporation, the first customer conversation, team meeting between the founders, etc. Whatever your definition of the company’s inception is. You can include any important details for clarifying anything unique about the inception. If there is not anything that needs clarifying, don’t add detail unnecessarily. 1 sentence for this.
Part 2: “How much of that has been full-time?” Start counting from the day that this was your only job. Include the data for each cofounder. Include any unique or important details. 1 sentence for this.
Part 3: “Please explain” The third sentence can be used if there are multiple cofounders and multiple unique circumstances that require clarification.
Keep the response to 1–3 sentences in total.
Are people using your?product?
Yes or no question. Both answers prompt separate follow up questions.
How many active users or customers do you have? How many are paying? Who is paying you the most, and how much do they pay?you?
(This question appears if you select “Yes” to “Are people using your product?”.)
Part 1: “How many active users or customers do you have?” Numeric response. Active users means the number of individuals who engage with your product on a Daily or Weekly basis (you’ve probably heard of DAU or WAU). Customers means business entities (prosumers, SMBs, enterprise companies, etc.) who pay for your service or who are in a free trial period or on a free plan. 1 sentence for this.
Part 2: “How many are paying?” Numeric response. State the number of individuals or business entities that are providing revenue to you. 1 sentence for this.
Part 3: “Who is paying you the most, and how much do they pay you?” If you segment your user base into groups (eg. developers, early stage startups, late stage startups) — state the user segment and corresponding average amount of revenue they pay you. Based on your the nature of your business, you can consider one of these calculations:
Address the final part of the question in 1–2 sentences, for a total response length of 2–4 sentences.
When will you have a version people can?use?
(This question appears if you select “No” to “Are people using your product?”)
The response should be a specific launch date, or timeline if you’re in hard-tech (eg. biotech).
Do you have?revenue?
Yes or no question. Revenue means money in the bank or obligated by legal contract and invoice. Use your discretion on LOIs, and disclose later if that’s the nature of the agreement.
If your response is yes, this prompts an additional line of questioning in the application.
We’re interested in your revenue over the last several months. (Section to input revenue data for the past 6?months).
Revenue received per period. The period they’re asking for is a calendar month with 6 inputs for the past 6 months. Revenue means money in the bank or obligated by contract and invoice. Follow the instructions:
Where does your revenue come from? If your revenue comes from multiple sources (ex. multiple products, multiple companies or a mix of consulting and this product), please break down how much is coming from each?source.
First part: “Where does your revenue come from?” Some things to include in your response:
Second part: If you have multiple companies or multiple products, include those 2 details for each as separate line items, and include a total.
The response to this question should be data oriented and no more than 2–4 sentences total.
Anything else you would like us to know regarding your revenue or growth?rate?
If there is anything important or unique about your revenue that needs clarifying, and hasn’t been addressed in the previous questions; address it here in 1–2 sentences. This is where I would disclose if revenue due hasn’t been received, or revenue isn’t contractually obligated (eg. LOIs). Else leave it blank.
If you are applying with the same idea as a previous batch, did anything change? If you applied with a different idea, why did you pivot and what did you learn from the last?idea?
If you haven’t applied before, state that in 1 short sentence.
If you have applied before, and you’re applying with the same idea; write 2–4 sentences on your progress since your last application. Just like with the traction question, “How far along are you?”; the response should be focused on notable measurable progress. Aim for a response grounded in quantitative metrics.
If you have applied before, and you’ve pivoted, or are applying with a new company; write 2–4 sentences on the inspiration for the pivot and emphasize the learnings you took away. The latter is very important, and that’s where I would focus most of the words. Startups are all about moving quick, failing fast, and iterating toward the right solution.
If you have already participated or committed to participate in an incubator, “accelerator” or “pre-accelerator” program, please tell us about?it.
If you’ve participated in a program like YC, disclose that here. Some information to include:
Keep the response to 2–4 sentences total.
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Idea Section
Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you’re?making?
First part: “Why did you pick this idea to work on?”. Write 1 sentence on what inspired or compelled you toward this specific pain point. It doesn’t necessarily need to be a deeply personal or profound reason, just be honest and stick to facts.
Second part: “Do you have domain expertise in this area?”. If you have domain experience, great; write 1 sentence stating your experience and any credentials. If you don’t have domain experience, don’t worry about it. There are plenty of instances where outsiders won because they came in without preconceived notions. Keep this part to 1 sentence either way.
Third part: “How do you know people need what you’re making?”. This question is effectively looking for a market validation data response. You’ll want to convey that there is a meaningful pain point, and that your solution will be positioned to solve it. Reinforce your argument with data, considering these 2 data types:
Needless to say, primary data will be the most compelling. There are a lot of hypotheses that logically make sense, but if the customer behavior doesn’t validate it; those opinions aren’t worth much.
Aim to respond to all 3 parts of this question in 4–5 sentences total.
Who are your competitors? What do you understand about your business that they?don’t?
First part: “Who are your competitors?”. Personally, I think of competitors in 3 categories:
If you don’t have competitors in each of these categories, that’s fine, but the answer to this question should not be: “We have no competitors.”
Second part: “What do you understand about your business that they don’t?”. For each competitor, or competitor set, from the aforementioned; clarify where they’re missing the mark in best serving the market.
Keep your response to 3–5 sentences total.
How do or will you make money? How much could you make? (We realize you can’t know precisely, but give your best estimate.
First part: “How do or will you make money?”. This should be a 1 sentence recap of your answer to “Where does your revenue come from?”.
Second part: “How much could you make?” is effectively looking for a Total Addressable Market (TAM) calculation. Yes, a significant TAM is necessary for most venture scale startups, but the other purpose of this question is to gain insight into your thought process- so stay data driven.
Write out the TAM calculation in 1–2 sentences. The calculation should go something like this:
TAM = total number of potential customers your business could have X average cost of your service per customer on an annual basis
There is no right or wrong answer to this question- it doesn’t matter if your TAM looks meager or massive, just share the data and the calculation behind it.
How do users find your product? How did you get the users you have now? If you run paid ads, what is your cost of acquisition?
This question will only appear if you select “Yes” to “Are people using your product?”
First part: “How do users find your product?”. List all your active user acquisition channels. Examples include direct sales, social media, paid ads, organic search, content, channel partners, etc. Do this in 1 sentence.
Second part: “How did you get the users you have now?”. This question can seem the same as the one just before it, but this is asking for the user acquisition data on your current user base. Optimal response would be numeric focused, and include detail such as “57% came from direct sales” or, for smaller numbers, “12 of the 21 clients came from direct sales”. Do this in 1 longer sentence.
Third part: “If you run paid ads, what is your cost of acquisition?”. If you haven’t calculated Cost of Customer Acquisition, this is how:
CAC = Total cost of sales and marketing / Number of new customers acquired
For example, if you spent $5,000 on sales and marketing activities during a month and acquired 50 new customers during the same month, your CAC would be $100: CAC = $5,000 / 50 = $100.
State the CAC in 1 sentence, for a total response length of 3 sentences.
If you track metrics around user engagement and retention, what are?they?
(This question will only appear if you select “Yes” to “Are people using your product?”)
When I’m considering an angel investment, I often ask the question: “What are your customers’ “value associated behaviors” in your product and how do you measure them?” In this context, “value associated” means that when the user performs those behaviors, they are experiencing delight with the product.
Ideally you are measuring those key behaviors with product analytics software and can list your top 3 user engagement metrics and their current values in 1–2 sentences.
For retention, if you haven’t calculated it before; this is how:
Retention rate = (number of users at the end of the period / number of users at the beginning of the period) x 100
If you had 100 users at the beginning of the month and 50 of them returned during the month, your retention rate would be 50%: Retention rate = (50 / 100) x 100 = 50%
State the retention rate in 1 sentence, for a total response length of 2–3 sentences.
Where will most of your initial users be?located?
Self explanatory dropdown option. Choose the country where your initial users will be located, or the country you plan to target.
Which category best applies to your?company?
Self explanatory dropdown option. Choose the category that best applies from the dropdown.
Equity Section
Have you formed ANY legal entity?yet?
Yes or no question. Any legal entity counts, regardless of location. The application will adapt based on your response.
Please list all legal entities you have and in what state or country each was formed (e.g. Delaware C Corp, Mexican SAPI, Singapore Pvt Ltd,?etc.).
List out all of the entities. Follow their instruction: “This might include subsidiary companies, legal entities you formed in other markets to do business, entities you created before a pivot, or legal entities you set up to employ developers or other service providers.”
Please describe the breakdown of the equity ownership in percentages among the founders, employees and any other stockholders. If there are multiple founders, be sure to give the equity ownership of each founder and founder title (e.g.?CEO).
Think of the response like a 3 column table.
The response should be focused on those data. If something requires explanation, you can include 1–2 sentences clarifying.
If you have not formed the company yet, describe the planned equity ownership breakdown among the founders, employees and any other proposed stockholders. If there are multiple founders, be sure to give the proposed equity ownership of each founder and founder title (e.g.?CEO).
YC notes “This question is as much for you as us.” because is an important consideration. If you haven’t determined this, take the time to do that now, and re-read the guidance from “Please provide some details of the cofounders in the startup.”
Other than that, the guidance here is the same as if you had already formed the company and assigned equity. Think of the response like a 3 column table. If something requires explanation, you can include 1–2 sentences clarifying.
Have you taken any investment yet?
Yes or no question. Any investment counts, regardless of amount. The application will adapt based on your response.
List any investments your company has received. Include the name of the investor, the amount invested, the premoney valuation / valuation cap, the type of security sold (convertible notes, safes or stock), and the investment date.
Think of the response as a 5 column table.
The response should be focused on those data. If something requires explanation, you can include 1–2 sentences clarifying.
How much money have you raised from investors in total in US?Dollars?
Numeric response. Total amount raised in USD.
How much money do you spend per?month?
Numeric response. Average monthly spend in USD. You can default to the average spend of the past 3 months.
How much money does your company have in the bank?now?
Numeric response. Total amount in your company bank account(s) in USD.
How long is your?runway?
Numeric response. Runway = Cash Balance / Monthly Burn Rate. You just input how much money your company has in the bank (Cash Balance) and how much you spend per month (Monthly Burn Rate). Divide the former by the latter, and you have your runway in months. If you have debt or you know there is a major capital expense coming up, subtract that from the “Cash Balance” part of the equation.
Are you currently fundraising?
Yes or no question. If you are pitching investors, taking calls with investors, or accepting investments, the answer is yes. If you’re not doing any of those things, the answer is no.
Please provide any relevant details about your current fundraise.
Consider these details as being particularly relevant:
Try keeping your response to 2–4 sentences.
Others Section
If you had any other ideas you considered applying with, please list them. One may be something we’ve been waiting for. Often when we fund people it’s to do something they list here and not in the main application.
I’ve been asked a few times if this is a trick question to test your loyalty to your mission; it isn’t. If you have other ideas you’re interested in or passionate about, list them here. Consider this format:
Repeat for each idea. Each idea should be 2 sentences. Keep it to 3 additional ideas max.
Response should be 2–6 sentences.
Curious Section
What convinced you to apply to Y Combinator? Did someone encourage you to apply? Have you been to any YC?events?
Part 1: State what inspired or convinced you to take the interest in applying in 1 sentence.
Part 2: If a person encouraged you to apply, name the person or list the people. Otherwise state, “No one encouraged me to apply.”
Part 3: If you attended a YC event, name the event or list the events. Otherwise state, “I have not been to a YC event.”
You can combine the last 2 points into 1 sentence if no one encouraged you to apply and you haven’t been to a YC event.
Response should be 2–3 sentences total.
How did you hear about Y Combinator?
They’re looking for the referral source. If it was word of mouth; name the person or people. If it was Paul Graham’s essays, HackerNews, YouTube, etc., name the source. 1–2 sentences max.
Key Take-aways
Brevity is?key.
If there is any opportunity to use less words, or less sentences; do so. Most responses should be either 1–3 sentences, or 3–5 sentences max. Why is this so important? YC gets about 20,000 applications per batch right now. Imagine you had to read 50 of these applications in 1 day. The applications that stand out are the ones that spare the partner the task of having to separate the data from the fluff.
Focus on?data.
YC partners look for facts and metrics. If there is any part of the app that feels like it’s “selling” or “pitching”, consider replacing it with facts and numbers. They don’t want to be pitched; they’re the ones who teach startups how to pitch. They just want the relevant data so they can make a decision.
Provide complete answers to the questions.
The application has questions that have an initial question and a follow up question, or two follow up questions. Address all questions, concisely.
Be honest.
To be clear: YC gets all kinds of applicants, and there isn’t a standard formula for what gets accepted or not. There are no wrong answers to YC’s application questions, except for dishonest ones. YC is serious about ethics. If you knowingly misstate or withhold requested information, that’s one way to get disqualified or even kicked out post-acceptance. If you find yourself “smoothing” or BS-ing a question; don’t. The partners have reviewed hundreds if not thousands of applications, and can spot it a mile away. Stick to the facts.
Worth noting
YC applications and interviews can be stressful. The acceptance rate is really low- about 1.5% — 2%. I think that some founders can get this perception that if they can just get into YC, they’ve made it, and if they don’t, their startup isn’t great. Neither of those things are even remotely true.
YC rejects many founders that they eventually accept; so keep working on your startup and applying. Consider this:
If you’re intimidated by the process, don’t be. Treat the YC application like any other task you'd do to support your startup. Get it done, and get back to talking to customers and building product.
I hope this was helpful.
Empathy Heals CEO
3 个月So helpful! Thank you! ??
Co-Founder Dolphin AI ?? The Modern CX Insights Copilot | Ex. Event Producer ???
8 个月Really helpful article! We are about to apply with Charlie and myself for Dolphin AI!
Co-Founder of Oslo Analytic
9 个月Thank You!
Create the ?? you wish existed | 3x Founder, COO ?? Psychic Energy Healer + Visionary Advisor | 2x Best Selling Author | Retreat Facilitator
10 个月Awesome this is a great breakdown thank you!
AI-Powered Modern Legacy & Inheritance Planning | CEO /Founder My-Legacy.ai
10 个月Great information Nick. Really appreciate it. One question. The definition of Technical Founder is strictly someone who can code? the Product Vision, Design and Management doesn't count as Technical Founder?