Why Every Startup Should Complete the Y Combinator Funding Application

Startup incubator Y Combinator began operations in 2005 and they have funded over 200 startups since the launch. Y Combinator provides a small amount of funding (they note the average is $18k) and over three months the new startups get space to work plus mentoring from some of the top entrepreneurs in the tech world. You can view a list of all of the Y Combinator startups (plus a number of the other startup incubators) on Google Docs.

Earlier this week Dave Winer shared a link to the application Dropbox founder Drew Houston submitted to Y Combinator for the Summer 2007 session. I found the application very interesting to read because it provided insight into where the vision for Dropbox was headed.  Artic Startup’s Antti Vilpponen also found the application interesting and has additional insights worth checking out.

I saved the link to the application and started to think about how I would complete the application for CloudContacts.

I soon realized that every startup should spend the time to complete the application. No, I am not actually applying to Y Combinator and am not suggesting you should actually submit the application. Naturally you should already have these questions answered but it’s a good way to get the answers into a usable format — portions of the document could easily be shared with prospective employees, partners and investors.

Some of the questions in the application include:

• What is your company going to make? — I would add a second part to this question, “Explain what your company does in one sentence” – I find this is a very difficult question for many startups to answer
• What do you understand about your business that other companies in it just don’t get?
• Who are your competitors, and who might become competitors? Who do you fear most?
• Why would your project be hard for someone else to duplicate?

Even if you never share the answers with anyone except the founders, it’s still a very worthwhile exercise. With the long weekend here in the U.S. – take a few hours and start working on your Y Combinator application.