Y Combinator is a start-up launch pad that provides small seed investments in budding tech companies through its highly competitive program. Y Combinator hosts a 3 month boot camp twice a year. Companies essentially try out for positions in the boot camp. Accepted teams typically receive $11,000 for their start-up plus $3,000 for each founding member. In exchange, Y Combinator takes a 6-7% stake in the company. Sometimes the stake is as much as 10%. Y Combinator's model means it typically provides capital ranging from $14,000 for one founder; $17,000 for two and $20,000 for three or more, which is primarily supposed to be just enough to cover living expenses.
Y Combinator’s real appeal stems from the attention startups receive from high-powered angel investors. 2011 winter class included 43 companies, the largest class to date. Founded by Paul Graham, Robert Morris, Trevor Blackwell and Jessica Livingston in 2005, Y Combinator is headquartered in Mountain View, California.
As of 2012, Y Combinator has provided its services to over 300 startups, including Loopt, Reddit, Clustrix, Wufoo, Scribd, Xobni, Weebly, Songkick, Disgus, Dropbox, ZumoDrive, Justin.tv, Heroku, Posterous, Airbnb, Heyzap, Cloudkick, DailyBooth, WePay, Bump, Convore, Like.fm, Lanyrd, inPulse, LikeALittle, Drchrono and WhereBerry.
In January of 2011, Y Combinator announced that every start-up that graduates from its program will have the choice to accept a $150,000 investment from Uri Milner, a partner at Digital Sky Technologies. The investment wil be in made in convertible debt with no cap or discount. As of