Applied for the 3rd time (B2B AI SaaS, 300% YoY growth, $109k revenue last month).
Decided to take a risk with the founder video. On my first 2 applications I did what everyone does and shot 100 takes to get one "right"... On this one though, I shot the whole video in one take (with warts and all) and used our own software to edit it, and then used that as the demo as well[0].
In a way, it feels like I can't win on this video thing
- if we follow instructions to "not edit" the founder video, the result is 100 takes for a basic video that is unworthy of a video-based startup.
- If we use our own tool, the video is "too polished" (even though it took less work to do!).
Hopefully the application stands on its own merits. A year ago I took the first rejection hard. I really really hate applying for stuff or having some kind of "jury" reviewing things when the only truth is what the market wants and whether people use what I've created. So as an engineer I prefer marketing to fundraising, by far.
If we don't get into YC I'll just keep bootstrapping. I see the value though, because with the right pointers we could grow way way faster. So, fingers crossed!
Why would you even want to join YC? They give the same deal to everyone. So you're lumped into a batch that basically has 30% of people in it with just an idea. It's pretty offensive if you actually proved yourself and your business idea. But don't worry, you prob still won't get in
I don't compare myself with others much. Why should I care if there are earlier-stage startups in there?
We always think that our current stage is pretty high up the mountain already (see a rough July 2022 ARR update[0] when I thought I was on top of the world) but if you zoom out, you see things with much better perspective (18 months later, the whole year of 2022 looks way less impressive[1])
If we're on the road to $100MM+ in ARR, the current spot we're at will be flattened to almost zero when you look back with perspective a few years down the line.
So there's that.
And then, "why join YC", well the answer is simple.
- We are growing, but we could grow so much faster. Everything is still on a shoestring budget.
- We have an epic roadmap and could grow the product to mind-boggling levels of awesome. YC could help us shave years off of that.
- Plus we finally cracked breakeven acquisition on cold traffic but we're strapped for cash.
- And finally, I've joined several founder "communities" in the last few months (online and local) and those are all just a dump-your-promo Slack channel with zero added value or interaction. The local "startup" events are full of startup consultants on the hunt, designers, would-be employees and the like (but zero founders). So it feels a bit lonely when you've got a challenge which is clearly in the "thousands of founders must have solved this exact same problem before, so why should I bang my head on the wall" category.
So: advice, founder-friendly terms, a network of peers, and not having to chase investors for capital. That's why I applied.
Thanks for answering. I misread your orig post. When you said you had 109k last month I thought that was monthly rev, which would make your arr 1.3mm. The standard offer 500k for 7% is pretty bad (5x rev multiple with x00% growth)
Overall the money isn’t a lot. It sounds like you’re strapped for cash. If you optimize for that you’ll likely find much better terms. The point about cohort being so many idea stage is that they focus on that and have resources geared towards those people. And the community (cohort) will be much less mature business wise. They give you the golden touch which helps for cos selling vapor ware. I think you’re beyond that and can go more traditional route to raise money. Did you reach out to other vcs?
> In a typical scenario where you raise your next safes at a $15M post-money valuation cap, the $375,000 MFN safe would convert into $375,000 / $15,000,000 = 2.5% of the company.
Maybe, I misunderstood then! I thought they were referring to next funding round to hand over rest of $375k. But in fact, it was just the calculation to explain the valuation of the company in ref to that balance.
It's a great product. With a SaaS with 109K revenue a month why do you need YC? I guess you want the network and advice which makes sense. Can help you reduce risk and provide an imprintaur of "premium credibility" (for want of better word!!) and aid access to US market and investors.
Your costs must be high, have you considered colo or lower cost cloud providers like Hetzner? I'm sure you have but just sayin!! :)
But I'm curious what have other investors said? It seems like with your combination of desire to raise, AI, revenue and great product you will have investors already beating a path to your door??
Decided to take a risk with the founder video. On my first 2 applications I did what everyone does and shot 100 takes to get one "right"... On this one though, I shot the whole video in one take (with warts and all) and used our own software to edit it, and then used that as the demo as well[0].
In a way, it feels like I can't win on this video thing
- if we follow instructions to "not edit" the founder video, the result is 100 takes for a basic video that is unworthy of a video-based startup.
- If we use our own tool, the video is "too polished" (even though it took less work to do!).
Hopefully the application stands on its own merits. A year ago I took the first rejection hard. I really really hate applying for stuff or having some kind of "jury" reviewing things when the only truth is what the market wants and whether people use what I've created. So as an engineer I prefer marketing to fundraising, by far.
If we don't get into YC I'll just keep bootstrapping. I see the value though, because with the right pointers we could grow way way faster. So, fingers crossed!
[0]: https://my.onetake.ai/b9502ad6/9dcd6eb6/