Techcrunch reports the news about 2 million investment in YC from Sequoia and prominent angel investors (Ron Conway, Paul Buchheit and Aydin Senku) . They also report that YC will now be doing 60 companies / year, up from 40 / year.
This is another big validation for the business accelerator model pioneered by YC and adopted by folks like techstars, seedforum and MVP. The premise of model is that the cost of doing business has gone down significantly. With the right support, guidance and capital of around 15-20K USD it is very much possible for team of Young, Talented , Focused and Passionate entrepreneurs to build a business with significant value. Which means businesses with good user traction, evolved products and business processes, revenues, break-even and more.
These initiatives are obviously good for the VC industry, and its good to see it officially recognized. The specialized and organized support for the super early startups is resulting in stronger startups, which means returns on the investments of the VC firms will be higher and more number of VC investments will lead to creation of successful companies.
Another important aspect of this model is the special focus and availability of active support from founders of companies working alongside in the same batch as well the alumni founders. All of these folks have experienced creating real companies and have unique capabilities, contacts and experience which proves useful for other folks part of the program at YC / Techstars / Seedforun / MVP.
Read my previous about “First time entrepreneurs (FTEs) – Building businesses in India“.