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We rode the hour and a half to Napa rehashing the interview (which itself wasn’t even 15 minutes long) with me thinking it went well and Chad thinking it went poorly. The interview certainly wasn’t what we expected, but I liked the vibe. I felt like they liked us. I thought that we would be a good fit with YCombinator and that they felt so too.

When John called we both gave him our thoughts on the interview, and he didn’t know whether to be encouraged or discouraged (though he knew my people reading skills to be far superior to Chad’s) but either way it didn’t really matter, the deal was done and there was nothing left to do but wait. They’d told us they were going to call that night and let us know either way. I admired their efficiency. The whole process, from the moment we saw the applications were starting back up to the time we’d know if we were accepted was about 3 weeks. Not much in the business world moves at that pace.

We stopped for lunch at Brix (though only because the line at Mustard’s, my favorite lunch spot so far in the Valley, was overcrowded) and checked in at the hotel, deciding to just surf the internet until the call came. Just as we were getting back from the hotel’s complimentary wine tasting (and judging by the quality, it was still overpriced even for free) the phone rang with an unfamiliar area code on the caller ID. I told Chad, who by that point had devoured every last fingernail out of nervousness and I think was getting ready to work on the toes, “well, this is it.” It was Paul Graham. “We’d like to invest in your company.” We were in.

He told us the deal they were offering and it was well within the range we had discussed, so I accepted on our behalf immediately. I’ve read articles and blog entries from a few different people who say that the YCombinator deals are unfair to founders. As they say in their FAQ, they usually give $5,000 + another $5,000 for each founder, so in our case we expected $20,000, for an amount between 2 and 10 percent of the company, with an average of 6. That alone is a valuation, even at 10%, of over $180,000 (and nearly $1 million at 2%) for what is essentially nothing but an idea from someone whom they’ve spent 10 minutes with.

Also, they have expenses that I have to think are non-trivial, so there’s more to it than just the dollar amount for the funding. This is a full time job for one of them, and I don’t know how much time the other three spend, but it seems significant. And they have connections and, most importantly, wisdom, and that you couldn’t buy for any amount. In just over 3 months I’ll be presenting what we’ve built to a virtual who’s who of the tech industry. The VCs who’ve funded most of the major tech companies will be there, and I’ll have a great shot, especially because I have multiple people who’ve done it before coaching me along the way. That opportunity alone is worth a few percent of any newly formed web startup.

And I think YC could ask for more of the companies and get it from almost all of them, so from a supply/demand standpoint they’re actually overpaying. I won’t say what they purchased from us, but we would have given them more. I get the feeling from meeting them and talking to previous YCombinator alumni that they want to help others succeed as much as they want to make money for themselves. As far as I can guess, they seem to be doing a great job of both, but either way I don’t think their deals are at all unreasonable. And judging by the number of applicants, neither do most prospective founders.

So after we found out we were accepted we called the families and then drank a celebratory bottle of champagne in the hotel bar. Sunday was spent wine tasting around Napa. I’d arranged a tour/tasting at Stags Leap Wine Cellar, where I’m a member, and Pete gave us taste of all of their fantastic wines. We did a late lunch/early dinner at the Rutherford Grille, which had an out of this world prime rib sandwich (thanks for the tip Pete) and did a light dinner at Bistro Jeanty, which had this fantastic tomato soup in a puff pastry.

Monday we took a trip back down to Mountain View to meet up with the YCombinator folks and some of the teams that were chosen. They gave us an overview of the program and it was pretty encouraging. The key for me will be presenting to the VCs in August. Being the least technologically experienced founder in my group but the most social and most accustomed to the non-tech parts of The Project, my main goal is to build up hype among potential customers. So while Chad and John are focused on getting the site operational as soon as humanly possible, I’ll be worrying about getting some people to use it before showing what we have to all of the major funding sources in the industry. Not much could give you a better incentive to make a kick-ass product than knowing you’re going to be talking to the guys behind every web startup from Amazon to Zillow, and our trip to the YCombinator office got me pretty excited to have such an opportunity.

We also spent a little time looking at Dexter. That was kind of neat and kind of scary at the same time. When the computer uprising comes, it’s going to be anybots doing the killing. I just hope to get on Dexter’s good list before that time comes. Maybe I’ll sneak him a flask of motor oil when nobody is looking.

After that we drove back to Napa and did dinner at Bouchon, on recommendation from PG and a couple others. It was fantastic, and leagues better than the one at The Venetian. Just like at Bistro Jeanty they were out of escargot though, prompting me to think there was some sort of nationwide snail shortage. We’d seen one large enough to make a steak out of on the way in, but unfortunately it was gone by the time we left so I went home snailless.

On Tuesday night we moved into the city, since our flight out the next morning was early. We cabbed down to North Beach to have a couple drinks with Lisa, a high school friend, at Rogue Brewery’s little bar by Washington Square. After that I had arranged a dinner with the team behind Xobni. A couple of the non-Justins from justin.tv came along too, as well as Pete and Ian, two British founders also accepted into this summer’s session, and a Canadian hacker girl named Laurence (hope I spelled that properly) who will soon be working for Trulia. We did dinner at a little Thai joint in the neighborhood. It was pretty good, but I’m spoiled by a place in my area called Suk Ho Thai. The name is rather unfortunate (either they didn’t have someone who speaks English green light it, or they did and that person hates them) but it’s still my favorite Thai restaurant.

After that we moved over to some little bar nearby with Pete and Ian (everyone else was abstaining since it was a work night) and had a couple drinks while discussing our projects and the impending move to Boston. Talking with the Xobni guys had made us realize just how much work this project is going to be, not just these next four months or so, but, if we do well, for at least a few years. Instead of saying to each other “dude, we’re going to Boston” or “dude, we got into YCombinator” as we did for the first couple days, we’re now saying “dude, I’ve got a lot of work to do.”

This weekend Vicki and I will be heading to Boston to look at a number of apartments I’ve lined up through Craigslist. After that it’s going to be a crazy month of wedding planning, getting the house ready, fixing the computers we’re going to be using for our development environment, and working on The Project, getting it set for its mid-August demo and hopefully a late July semi-public beta. Moving is going to be a tremendous pain, and we’re not sure yet whether we’re going to be taking furniture or just trying to rent it there. The latter may actually be cheaper, and is definitely far easier. I guess I’ll find that out pretty soon.

This entry was posted on April 26, 2007 at 12:03 pm and is filed under Startup . You can follow any responses to this entry through the RSS 2.0 feed Both comments and pings are currently closed.