How Y Combinator is Propelling More Female-Led Startups How Y Combinator Is Propelling More Female-Led Startups Kirsty Nathoo, CFO and partner at Y Combinator has heard every possible excuse for why startup founders don’t apply to Y Combinator’s funding cycles. They all sing the tune of, “I’ve heard that Y Combinator accepts only x,” with x being anything from a demographic to the stage of a startup. Some startups don’t apply because they think they have too much funding to apply, and then others don’t apply because they don’t think they have enough. For every “too much” of something that prevents a startup from applying, there’s another startup who doesn’t apply for having “not enough” of the same thing. And to everyone who says or thinks this, Y Combinator wants you to know something: You’re wrong. Here’s the right statement: Y Combinator accepts only talented startups, regardless of the stage or any detail about the startup’s founders. There’s a misconception that YC accepts only twenty-something male Stanford graduates, but that’s all it is – a misconception. Nathoo, herself, is the perfect example of how talent is all you need to get access to YC’s resources. She started as the in-house accountant when Y Combinator wasn’t even on the map. Having been accepted to the Winter program in 2008, Nathoo’s husband, Amir, had to move from the United Kingdom to Silicon Valley. After graduating from the accelerator, he felt that moving to Mountain View would be a smart move. At the time, YC was looking for an in-house accountant. Because Kirsty was working at PwC as the UK equivalent of a CPA, she already had a considerable amount of experience with tech and startups. It only made sense for YC founders Paul Graham and Jessica Livingston to ask Kirsty to join the team. She wasn’t being asked to be the in-house accountant for the largest and best startup accelerator in the world; she was asked to be the in-house accountant of a startup that wanted to help other startups. YC felt like a small family business at the time – it wasn’t what it is today. Today, Nathoo’s CFO and partner position matches YC’s high caliber in the startup industry. Not only has YC come a long way in its applicants and programs in terms of diversity, but it has also grown from 4 initial partners to 17 partners – 4 of whom are women. That may seem like slim pickings, but check the numbers; it’s not. YC has always done events open to anyone interested in starting startups, but they wanted something that could speak to women who were in the field or thinking about joining. Y Combinator started holding an annual Female Founders Conference in 2013 to dispel the myths that prevent women from living up to their entrepreneurial potential. There is so much negative press about the whole startup world – that it is a male-dominated industry, and that it’s too hard for women to get by. Naturally, this kind of talk is intimidating. The Female Founders Conference gives attendees more information about why launching and running a startup is a definite possibility for anyone by bringing in female alumni of YC funding cycles. To anyone who wants to go into the startup industry, here are the key points from Kirsty Nathoo and fellow YC Partner Carolynn Levy’s lecture on How to Start a Startup: Always, always, incorporate your business in the state of Delaware. Incorporating your business in Delaware is a no-brainer, and not doing so could potentially cost you hundreds of thousands of dollars in legal fees. Move on and keep focusing on what you need to do. Keep it simple. Keep it organized. Kristy Nathoo, Partner at Y Combinator Resist the urge to give a disproportionate amount of stock to early players. “If the expectation at your startup is that each Founder is in it one hundred percent, for the long haul, then everything that happened before the formation of the company shouldn’t matter.” At the same time, be mindful of equity allocation. Value is more than the initial capital received or the basic idea of the company; “value is created when the whole Founder team works together to execute on an idea.” Be on top of your legal game. “The main things here are sign the paperwork, sign the Stock Purchase Agreements, sign the 83(b) Election, and make sure that you actually have proof that you sent that in.” Vest. Vesting prevents the founders, or founder if you’re solo, from bailing on the company and keeping full ownership. In other words, vesting is insurance to the other co-founders and investors that they won’t be screwed over down the road. Don’t set the price of your company. YC will take in a company at any stage – whether the price or valuation of the company hasn’t been set (seed stage) or it has (Series A or Series B). Nathoo recommends not setting the price because it’s more efficient to getting money and moving forward. Accredited investors – not your uncle or neighbor – know what they’re doing and the risks associated with it. Only add an investor to your board if you believe that will add value to your company. You don’t have to end up like Eduardo Saverin. “Pro-rata rights are a way to avoid dilution.” “Surprising as this may sound, one of the hallmarks of a really effective founder is how well he or she handles employee terminations.” Even if you don’t go down the startup accelerator or VC path, know that a lot of running any startup relies on following the rules and taking it seriously. Shannon Matloob Shannon is a contributor at SWAAY. She has a degree in Media, Culture, and Communication at New York University with a passion identifying and researching other women on the path to greatness.