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Tech Billionaire Boot Camp
theodp writes "Forget the Summer of Code. If you've got a hot idea for a start-up, Newsweek says Y-Combinator, the boot camp where Silicon Valley meets 'American Idol', is the place you should be. 'Some critics scoff that Y Combinator's investment is peanuts for that amount of equity. But the opportunity is unparalleled -- total immersion into Silicon Valley start-up culture, advice from Graham and a fast track to the top angel investors and venture-capital funds. When Graham calls the winners, the founders have only five minutes to accept. "If people turn us down," he says, "as far as we're concerned they've failed an IQ test."'" We've previously discussed the program on the site, just over a year ago.
"If you want to apply, please submit your application online by midnight PST on Monday, April 2, 2007. Groups that submit early have a slight advantage because we have more time to read their applications."
Good timing for this article...
You're completely correct. First of all, the phrase "angel investor" should never be used to accompany a five digit figure --even "venture capital" is kindof out of place. Secondly, if they're investing (up to) $20k into a startup, it is they who are failing the IQ test. [in my experience] Serious venture investors want to see startups that have already bootstrapped a significant amount of funding (at least six if not seven figures), have PhDs onboard, etc. Now, obviously some industries and ideas have a much larger barrier to entry than others. For instance, I'm in the cinema field, where a cutting edge product might cost between $50k (low end) and $1M (high end). So designing, manufacturing (etc) these products has a much larger barrier than say, the guy who has a bright idea for the next digg.com or whatever web-two-point-oh site is hot this week (where $20k might actually pay a brilliant developer to write much of the code needed). But, even using the American Idol analogy-- if you were going to invest in a singer, someone who doesn't have any sofware/hardware development needed, just needs the cash to get into a studio and get recorded, that alone would cost more than $20k.
Twenty grand really is peanuts. Hell, some venture capital groups have proposal fees that can easily run a few thousand dollars (that the startup needs to pay just to present the business plan to them), not to mention cookie-cutter research for business plans alone can easily run $5-10k (I won't even get into custom research).
My advice if you need $20k of investment capital? Put it on your Visa (worked for Under Armor). Selling off a chunk of anything you genuinely believe to be a good idea should only be considered when you have no other available means to bring that idea to fruition.
I am Jack's complete lack of surprise.
He also didn't invent Bayesian filtering. I open sourced a similar statistical spam filter a year or two before he wrote the plan for spam. And I didn't invent it either.
Then this is what you should do. There are plenty of tech friendly cities with affordable housing and relatively low cost of living. Portland, OR; Austin, TX; Vancouver, BC; Raleigh-Durham, NC; Heck even Boston, Seattle and New York City are a steal compared to SV (if you live in one of the suburbs nearby). I lived in SV for 5 years and could not reasonably afford a house and family with developer salary (pure interest loans never sounded good to me); so I moved to Austin and managed to buy a house without much trouble and enjoy it a lot and glad I moved away from the valley (not to mention all the fun life outside of work which the valley sorely lacks unless you want to drive to SF every night).