New YC Partner Investment Policy

As of this batch we're introducing a new policy for investments by YC partners in the companies we fund.

YC partners have invested in the startups we fund since the first batch. In the beginning it was harmless, and occasionally even necessary. And other investors couldn't treat investments by YC partners as much of a signal when I was the only one doing it, because I was so haphazard about it. But over the years this gradually changed, as there came to be more YC partners and they paid more attention to picking likely winners, till by the last couple batches, other investors could treat investment by YC partners as an accurate sign of how promising we thought a startup was. Which meant we were now making it harder for the startups that partners didn't invest in to raise money.

Our new policy is designed to prevent this by depriving other investors of this signal till it's too late. The new rule is that YC partners can't be in the first $500k a company raises, unless it's 3 weeks past Demo Day. And since a startup's fundraising trajectory is almost always established, one way or another, by 3 weeks after Demo Day, this should mean that we can't affect anyone's fundraising unless they've raised $500k, at which point their fundraising is already successful.

This should fix the problem.  If it doesn't we'll try something else.

Rocketrip (YC W14) Lets Your Boss Pay You For Saving Money While Traveling

"Rocketrip, a company out of the latest Y Combinator batch, wants to save companies money by paying the employee to find ways to travel on the cheap.

The idea behind Rocketrip: for every two dollars you save your company, you get paid one. If hotel rooms in the area are, say, $150 a night, and you opt to crash on a buddy’s couch instead, you just saved the company $150 bucks. You get a gift card for $75, and the company still saves $75. Find a promo code that saves you $10 off your rental car? Bam — that’s $5 bucks for you."

Automatic’s (YC S11) Smart Driving Assistant Can Now Turn Your Car Into An iBeacon

Automatic‘s smart driving assistant, which combines a small piece of hardware with powerful mobile apps, was designed to provide vehicles owners with new tools to understand how they can get more out of their car’s performance. Well, it recently added iBeacon functionality, which could fundamentally change the way users and their cars interact with other things around them.

Rap Genius (YC S11) announces the "Genius" iPhone app

On Rap Genius, artists and their fans explore lyrics interactively via line-by-line annotations they can read, create, and edit as part of a worldwide knowledge project. Rap Genius is the brain we all share: beyond music, it is the Wikipedia of all text, including poetry, news, history, science, the Bible, fashion, and much more. The Genius app – your pocket guide to human culture – brings the Rap Genius brain to your phone.

Read the full post on the Rap Genius blog

ZenPayroll (YC W12) and Zenefits (YC W13) featured in VentureBeat's "best back-office software for small businesses"

ZenPayroll

ZenPayroll focuses on one key business process and does it well: payroll.

This Y Combinator-backed company presents an easy signup process: Administrators enter data about employee hours, overtime pay, bonuses, and reimbursements, and the platform automatically calculates and pays your state and federal payroll taxes. It also enables direct deposit and gives employees direct access to their pay stubs, pay history, and information. More...

Zenefits

A second Y Combinator financial services startup with “zen” in the title, Zenefits' speciality is, you guessed it, paperwork-free benefits.

Benefits are extremely complicated and confusing. Zenefits makes it super easy to set up group benefits programs for employees, including medical, dental, vision, 401(k), and stock options. Rather than replacing an accountant, Zenefits is more of a replacement for an HR representative, although it also takes care of payroll. More...

Read the full story on VentureBeat

Cambly (YC W14) Offers On-Demand Access To Language Tutors On iPad, iPhone, And Desktop

There’s no better way to learn a language than by talking with a native speaker. But let’s face it — it’s not always easy to find or connect with those speakers. Cambly solves that problem by creating an on-demand marketplace of native English and Spanish tutors that students can instantly connect with online or through their mobile phones or tablets.

Cambly provides a two-sided platform through which those interested in learning a new language can do so through conversational video chat with a native speaker. Thanks to the beauty of its mobile and tablet apps, students can access personal tutors wherever and whenever, with just one click.

MemSQL (YC W11) in Forbes: Helping big data costs drop 96% from $100,000/TB to $4,000/TB

Peter Cohan writes in Forbes — MemSQL brings Facebook-style big data analysis to the masses:

Big companies are so worried about risk these days that it is a miracle any of them ever buy anything from a startup. That’s probably the reason that people used to say you can never get fired for buying from IBM. But a little San Francisco-based database startup is giving big competitors like IBM and Oracle a run for their money when it comes to selling databases to big organizations.

Why would a big company take a chance with a small startup? In the case of real-time big data analysis software provider, MemSQL, the answer is that it delivers better performance at a lower price compared to Oracle. Oracle charges customers “about $100,000 per terabyte (TB) when you break down its $3 million hardware cost” said Eric Frenkiel, MemSQL CEO, in a January 22 interview. Random Access Memory (RAM) on a commodity server goes for $4,000 per TB.

That 96% lower cost per unit of data stored is an excellent example of what I call a Quantum Value Leap (QVL). And evidently that QVL is enough to persuade otherwise reticent companies to buy MemSQL’s product. So far, MemSQL’s customers include “Comcast, Zynga, Shutterstock and Ziff Davis,” notes Frenkiel.

Codecademy (YC S11) selected for Apple's 30 Years of Mac

YC alums Zach Sims and Ryan Bubinski were recently honored in Apple's 30 Years of Mac campaign. 

After he dropped out of Columbia University, Zach Sims — along with his former classmate Ryan Bubinski — started Codecademy, an online platform that teaches aspiring engineers to write code. Inspired by how the Mac allowed anyone to master technology, they used it to design a friendly interface with simple, interactive lessons. An instant Internet sensation, Codecademy would become the most popular way to learn what some call the most valuable language of the 21st century.

Read more on the Apple 30 Years of Mac website