Y Combinator’s Fellowship Program is back. And its bigger and better. And here’s what you need to know about it.
In the Fall season last year, Y Combinator wanted to do something different when it came to funding and mentoring early stage startups at scale. To this end, Y Combinator devised an 8-week experiment that they dubbed The Fellowship.
The aim of the Fellowship? To have a program that helped as many startups as possible at the idea or prototype stage.
The Fellowship experiment was a success at YC. And now, the incubator has announced that it will be done again.
This is Great For Startups Looking to Secure Funding
The Fellowship V2 program is already getting ready to fund some promising startups in its second iteration, and Y Combinator has seen spectacular results with the program, that it has announced that they’re open to applications for the third batch.
Here’s what startups and entrepreneurs need to know about some of the salient features of the Fellowship program:
- To make the process more streamlined and convenient for next generation of startups, YC has made it possible to apply for both its Core program as well as the Fellowship via one application.
- YC is making changes to the Fellowship format so that the 2nd and 3rd batches are in for a whole new and fresh experience together.
- YC will be taking on equity.
Lets take a look at what each of these points mean in detail for startups.
More money will be provided per team this time around, a fact made possible by taking some equity on.
This time around, the Fellowship will provide $20k for 1.5% equity.
Equity will not be taken upfront. Instead, YC will issue a convertible security that kicks in by converting into shares if:
- The company has an Initial Public Offering (IPO).
- The company holds a funding event or undergoes an acquisition that comes at $100M or higher.
For startups this is good news, as this new approach allows YC to build a long-term program, a far cry from the traditionally lightweight version that the accelerator currently provides.
The New Format
Iteration is the name of the game when it comes to mentoring startups. The program is continuously under evolution.
Here are some highlights of the new Fellowship program going forward:
- The new program can be experienced remotely, allowing teams the maximum time for product and customer development. Skype or phone can be used to log over the office hours. As part of the all-day Kickoff Conference, teams will be brought together once, if only at the beginning of the cycle, leading YC to combine all workshops in the core batch in one day.
- YC will provide a dedicated partner for Fellowship teams, one that follow their progress throughout. The YC team will be checking up on areas such as Bay Area, Philadelphia, New York and Austin, amongst others where multiple teams reside.
- Weekly talks will be scheduled that will be streamed live to companies online, perfect for inviting speakers to YC who can’t come in person.
- As the Fellowship program nears conclusion, startups will have to present their progress to investors on the Virtual Demo Day.
- Should a startup also apply for the YC Core Program in addition to the Fellowship, the incubator will provide information about their decision earlier on regarding their interview status.
One Application – Two Programs
After seeing how much popular and successful the first iteration of the Fellowship was (one week netted 6k applications apiece for the Core program AND the Fellowship!), YC has decided to make the process more streamlined and simpler this time around.
This is efficient because YC will not have to deal with separate application cycles. So now startups can apply to either or both programs via one application, depending on what stage they are at regarding product market fit.
The first Fellowship program had 22 of the 32 participating startups going on to avail the YC Core program. 6 of those companies are still part of the Winter 2016 batch.
The new iteration and format is going to start from February 1st, helping YC scale up and offering the best funding and mentoring to budding startups this time around.
If you’re looking to get into the funding game, for both the third Fellowship batch and the YC Summer 2016 batch, you can apply for it today.
Good luck startups.