Many in the startup community are familiar with Y Combinator, the Valley incubator that runs a bi-annual boot camp for budding entrepreneurs. The group sifts through hundreds of candidate company ideas in order to find the 12 companies that will spend 3 months in the Valley, taking advantage of Y Combinator’s network and resources in grinding out a working prototype that can be used to secure further funding. Participants in the program receive $5,000 + $5,000 per founder, and in exchange for funding and Valley immersion the founders can expect to relinquish an equity stake of around 5%-6%.
Is this too much to give up for such a small sum of money, or is the equity lost worth the opportunity to gain instant connections and focused expertise?
