Glossary & Quotes
The YC vocabulary, plus lines worth remembering
- Demo Day
- The event at the end of each Y Combinator batch where founders pitch their startups to a curated audience of investors.
- Standard Deal
- YC's uniform investment offered to every accepted company: $500,000 total, split into $125,000 for 7% equity plus $375,000 on an uncapped MFN SAFE.
- SAFE
- A Simple Agreement for Future Equity, an instrument created by YC that lets investors fund a startup now in exchange for equity that converts in a later priced round.
- MFN (Most Favored Nation)
- A SAFE clause guaranteeing that the investor automatically receives the most favorable terms granted to any later investor before the next priced round.
- Post-money SAFE
- A revised SAFE introduced by YC in 2018 whose ownership percentage is calculated on the company's post-money valuation, making dilution easier to predict.
- Series A
- A startup's first significant round of priced venture capital, typically raised after demonstrating early traction or product-market fit.
- Seed
- An early funding round used to build a product and find initial traction, usually preceding a Series A.
- Batch
- A cohort of startups that go through the YC program together over the same three-month period.
- Group Partner
- A YC partner who mentors a small group of founders throughout the batch, giving feedback and guidance.
- Office Hours
- Scheduled one-on-one or small-group advice sessions where founders get tailored guidance from YC partners.
- Request for Startups (RFS)
- A periodically published list of problem areas and ideas YC would especially like to see founders work on.
- Bookface
- YC's private internal network where founders connect, ask questions, and access the alumni community.
- Hacker News
- A social news site run by YC focused on technology and startups, popular among engineers and founders.
- Startup School
- A free online program and set of resources from YC that teaches the fundamentals of starting a company.
- Work at a Startup
- YC's recruiting platform that connects engineers and other talent with jobs at YC-backed companies.
- Make Something People Want
- YC's foundational motto urging founders to prioritize building a product that customers genuinely need.
- Default Alive / Default Dead
- A framing from Paul Graham asking whether a startup will reach profitability on current growth and spending before its money runs out.
- Ramen Profitable
- When a startup earns just enough to cover the founders' basic living expenses, buying time without needing more funding.
- Ramen Profitability
- The state of generating enough revenue to cover the founders' minimal personal costs, signalling early viability.
- Product-Market Fit
- The point at which a product satisfies strong market demand, shown by users adopting and retaining it eagerly.
- Pivot
- A significant change in a startup's product, market, or business model in response to what the team has learned.
- MVP
- A Minimum Viable Product, the simplest version of a product that can be released to test core assumptions with real users.
- Burn Rate
- The rate, usually monthly, at which a startup spends its cash reserves in excess of revenue.
- Runway
- The length of time a startup can keep operating at its current burn rate before running out of money.
- Cap Table
- A capitalization table listing who owns what equity, options, and convertible instruments in a company.
- Dilution
- The reduction in existing shareholders' ownership percentage that occurs when a company issues new shares.
- Pro Rata
- An investor's right to invest in future rounds to maintain their existing ownership percentage.
- YC Continuity
- YC's former growth-stage fund that made later-stage and pro-rata investments in alumni companies before being wound down in 2023.
- Top Company
- A designation YC uses for its most valuable alumni companies, ranked largely by valuation on its public Top Companies list.
- Unicorn
- A privately held startup valued at one billion US dollars or more.
- Decacorn
- A privately held startup valued at ten billion US dollars or more.
- Founder Mode
- A term popularized by Paul Graham in 2024 for a hands-on style in which founders stay deeply involved across the company rather than purely delegating like professional managers.
Quotes
“Make something people want.”
“One of the most common types of advice we give at Y Combinator is to do things that don't scale.”
“Startups don't win by attacking. They win by transcending.”
“The most important thing for a startup is to make something people want.”
“It's better to have 100 people love you than to have a million people sort of like you.”
“A startup is a company designed to grow fast.”
“The way to get startup ideas is not to try to think of startup ideas. It's to look for problems, preferably problems you have yourself.”
“Live in the future, then build what's missing.”
“It's better to build something that a small number of users love than a large number of users like.”
“It's much easier to expand from something that a small number of people love to something that a lot of people love than from something a lot of people like.”
“The degree to which the outcome of a startup depends on luck is something most founders underestimate.”
“So all you need is a great idea, a great team, a great product, and great execution. So easy!”
“A bad team will not deliver a good product, ever.”
“You get rich by owning things that increase rapidly in value.”
“Almost always, the people who say "I am going to keep going until this works, and no matter what the challenges are I'm going to figure them out" win.”
“It's better to make a few people really happy than to make a lot of people semi-happy.”
“Limited resources free you to do what's important, instead of trying to do everything.”
“If your product is great, it doesn't need to be good.”
“Talk to your users and build what they want.”
“Launch something bad quickly, then iterate. Launching a mediocre product and then talking to customers and iterating is much better than waiting to build the perfect product.”
“The number one job of a startup is to build product and talk to users.”
“The founders who win are the ones who are still standing after everyone else has given up.”
“Founders who keep going are the ones who do well. It's not about being the smartest—it's about being relentlessly resourceful.”
“Investors are people too. They get excited about the same things that get customers excited.”
“What I learned is that great founders are relentlessly resourceful, and that's something you can see very early.”
“We funded people we wished someone had funded us when we were starting out.”
“Determination is the single most important quality in startup founders.”
“When we read applications, what we're really looking for is determination and a willingness to keep going no matter what.”