REVL (YC W16) is Making the World's First Stabilized Action Camera

REVL is a company launching out of our Winter 2016 class founded by a team of action sports lovers who got tired of spending hours editing the shaky footage they'd shot while kiteboarding.

So they developed a new and better kind of action camera.

VentureBeat's Ken Yeung wrote about REVL in a story published last week:

"Founded in 2015 by Eric Sanchez, Revl is building an action camera that is fully stabilized, provides instant capture and share, and has 'intelligent features,' which the company plans to elaborate more on this spring. Revl will be making its device available for purchase through a crowdfunding campaign that’ll launch later this year. No price information has been released yet.

With this product, Revl is taking a clear shot at GoPro and other sports and action-focused cameras. The team — described as passionate kiteboarders and sports enthusiasts — 'got tired of spending hours editing shaky and rotating footage.' To solve this problem, they set about building a camera capable of reducing shakiness — it has technology that promises to keep the view level with the horizon at all times."

REVL has raised a total of $2 million in a seed round led by Bill Tai. Read more about the company and its recent funding in VentureBeat here and in the Wall Street Journal here.

Wakie (YC W16) Connects Like-Minded Strangers to Share Advice and Experience

Existing friends and family networks are who we often turn to for advice, or to talk about tough topics. But sometimes it's easier -- and more eye-opening -- to talk to someone you don't know at all.

Wakie is a company launching out of our Winter 2016 class that has created a friendly community of people who help each other by sharing their own life experience. The startup has built an app for iPhone and Android that lets you set any topic you want to discuss (work, relationships, traveling) and get an anonymous voice call from someone with a similar interest in seconds. It's like having millions of friends who are available 24-7 to talk candidly about any subject.

TechCrunch's Steve O'Hear wrote about Wakie in an article last week:
"Behind the scenes [Wakie] ...is building machine learning tech based on user profiles, the subjects its users have answered calls on, and feedback after each call to help Wakie become better at matching callers.

'We use machine learning to learn the life experience of each user and to provide better matching for any kind of question,' explains Wakie CEO Hrachik Adjamian, who, along with his brother Tatul, founded the company. 'We believe that artificial intelligence (AI) is too far from being a replacement for human company so we are building AI made to solve the problem of how to find real human intelligence.'

Adjamian says that although Google is good at searching for information, it often falls short for more nuanced discussions or where seeking the opinion of another human is preferable and works best in real-time."

Read the full story here.


Bonsai (YC W16) Helps Freelancers Get Paid On-Time

Studies say that upwards of 50 percent of freelancers are paid late or not at all. Unfortunately, the most successful freelancers today aren’t necessarily the best at their chosen trade -- they are the people who excel at negotiating with clients and structuring payments.

Bonsai is a company launching out of our Winter 2016 class that takes care of those day-to-day business matters so freelancers can go back to focusing on more important things.

TechCrunch's Anna Escher wrote about Bonsai in a story published this week:

"Bonsai, part of Y Combinator’s Winter 2016 batch, has created a tool designed to guide freelancers through contract creation and invoicing. The two-person company bills itself as a system that takes care of contract creation, invoicing and payment processing for white-collar freelancers, or anyone who does contract work from behind a computer.

...There are plenty of invoicing systems and marketplaces for freelancers out there, but what sets Bonsai’s tool apart is the element of guidance and the simplified nature of its service. It’s also worth noting that Bonsai allows freelancers to get paid by ACH, which isn’t available in many other freelancer payment tools and results in much lower fees for high-earning freelancers.

With today’s digital economy allowing for the career flexibility that freelancers crave, the company hopes to serve more and more people as freelancing becomes a more viable choice for professionals."

Read the full story on TechCrunch here.

STILT (YC W16) Helps Expats in the U.S. Get Low-Interest Loans

Around 4.5 million expats from all over the world are in U.S. on long term visas. About a million of these are students who spend $30 billion on education in the U.S. every year -- and may need student loans.

However, many do not have credit scores and thus have no access to credit-based services such as loans, credit cards, and post-paid phones. Many of these people have no other option but to borrow money from family members, acquaintances, or friends, often at sky-high interest rates.

STILT is a company launching out of our Winter 2016 class that provides a better solution. STILT provides loans of up to $25,000 to foreign nationals in the U.S. at better rates than existing options, and without needing a cosigner.

VentureBeat's Ken Yeung wrote about STILT in an article published recently:

"But in lieu of the credit history the average U.S. citizen has, the company considers a person’s job history, college transcript, visa status, social media profiles, and bank accounts to determine someone’s creditworthiness. All of this information is entered into Stilt’s algorithm, which will assess whether money should be lent out.

The company also takes into account why you want the loan, such as paying rent, school tuition, repayment of previous loans (some international students want to get rid of their large debts back home), relocation assistance, and more."

Read the full story in VentureBeat here.

The Fellowship + Stripe Atlas

Great startups can come from anywhere in the world. One of the Fellowship's goals is to make it as easy as possible for founders to start companies with strong foundations, no matter where they're located. It’s one of the reasons why we’re designing a program that founders can participate in without having to move to Silicon Valley.

Unfortunately, international founders who join YC usually have to navigate fairly complicated processes just to get access to the same tools as their US counterparts. There are two reasons why we set up YC companies as U.S. entities with U.S. bank accounts:

1) Access to the largest pot of seed capital in the world. U.S. investors tend to avoid investing in foreign entities.

2) It’s easier to collect revenue with a U.S. bank account in the U.S. market, which for most of our companies is still the largest market for them to go after.

Today, Stripe announced the launch of Atlas, a beta program designed to streamline the process of getting the basic building blocks of starting a company assembled without hassle. In partnership with Stripe, we’ll be offering Atlas to future Fellowship companies located overseas.

Atlas allows international founders to get everything they need to create a business in the U.S. simply by filling out a web form. Stripe handles the rest, providing each business with:

1) An incorporated U.S. business entity
2) A U.S. bank account
3) A live Stripe account to receive payments from anywhere in the world
4) Access to services they'll need to get started; including tax advice from PwC, legal guidance from leading international law firm Orrick, and $15,000 credit to Amazon Web Services to help scale their newly global business

Stripe initially joined YC to rethink how payments on the internet should work. Now they’ve rethought what borders mean for business. We’re delighted to be working with Stripe to make it easier for our international founders to spend more time working on their startup and less time on paperwork.

YC at Yale, Princeton, UChicago and Northwestern

The second leg of YC's Winter 2016 College Tour kicks off today in Atlanta. We'll be visiting these schools in the next week:

2/26 Yale
> 4pm, Sheffield-Sterling-Strathcona Auditorium (SSS Rm 114) - 1 Prospect Street New Haven, CT 06511
More info

2/29 Princeton
> 7:30pm, Robertson Hall, Princeton, NJ 08540
More info

3/2 University of Chicago
> 6:30pm, Chicago Innovation Exchange - Theater, 1452 E 53rd St Chicago, IL 60615
More info
Sign up for office hours by end of day this Thursday (4pm-6pm)

3/3 Northwestern University
> 6pm, The Garage, 2311 Campus Drive, Suite 2300, Evanston, IL 60208
More info 
Sign up for office hours by end of day this Thursday  (2pm-6pm)

See you there! 

Fundraising Advice for YC Companies

We've modified our fundraising strategy advice to YC founders.  In the interest of everyone having the same information, here is the email I sent to the current batch this morning.


Founders--

As Y Combinator's prominence has grown in recent years, we've seen a flood of new investors who are very focused on investing in YC companies in the current batch.  Some of these investors are very aggressive and offer attractive terms with no diligence.  There are obvious good things about this, but there are really bad ones too.  We're now about a month away from Demo Day, which is when the investor outreach usually starts in earnest (as we've said before, we recommend politely deferring these requests to meet until closer to Demo Day).

So we're modifying our advice about how to raise money at the end of YC.

Before we get to that, here's a very important point: some good companies will struggle to raise money.  Fashionable companies, good or bad, have a much easier time raising money than unfashionable companies.  This is a bug in the market that some of the best investors learn to exploit, but it still doesn't help you much if you need to raise and can't.  Try not to get demoralized if you don't get the response from investors you were hoping for--be relentlessly resourceful and figure out a way to make it work with what you have.

Also, the environment seems to be changing.  It will very likely be somewhat harder to raise money now than it's been in past years, but it's too early to say for sure (so far we haven't seen nearly as much of an effect on early-stage fundraising as the level of press coverage would seem to indicate).

Ok, on to our advice.

1) You should care more about good investors than good valuations.  Use the YC investor database, talk to us, talk to alumni, and talk to the founders of the companies that investor has funded (especially in cases when the companies haven't worked out).  However, you should insist on clean terms (in practice, offering messy terms is a sign of being a bad investor).

2) You should aim to sell only about 20% of the company in your seed round (though 25% is ok if you're raising a 'large'--say more than $2.5 million--seed round).

3) You should raise enough money to get to your next significant milestone.

4) You should try to get the process over with reasonably quickly so you can get back to work.  The founders that fall in love with fundraising rarely go on to be the most successful. 

So here's what I would do if I were a YC founder in the current climate.

I'd close the first, say, $200k from the first reasonably good investors that offer it on reasonable terms--say a $5 million pre-money valuation or higher.  This removes some uncertainty and pressure, gives you capital to execute with while raising the rest of your round, puts you in a stronger position, etc.  It's worth a discount for all of this.

Beyond that, I'd then collect interest from investors.  Get to know them and let them get to know you.  This doesn't have to take a long time; a few weeks and 3 meetings per investor for a seed round is enough, and in some cases both sides will feel ready to make a decision after one meeting.  But don't feel the need to take offers in the order they come in; you have a limited amount of space in the round, investors are on your cap table for a very long time, and you want to pick the best people you can get.  Every batch, some of the best companies regret selling a lot of stock early on and then getting interest from great investors later.

Then, after a set number of weeks you decide to spend fundraising, make the allocation decisions at the same time.  It's cleanest to offer everyone the same terms that invests at the same time--everyone claims they add extra value and needs advisor shares, but no one else thinks anyone should get them.  If you deviate from this, you should be transparent and let everyone in the round know about advisor shares or different terms.  (If you fill up your initial raise and then have more interest but are sensitive to the dilution, it's fine to ask new investors if they want to raise more at a higher price.  They can always say no.)

Use the Handshake Deal Protocol when you're ready to make allocation decisions.  (Though it's worth noting we only recommend the HDP for seed rounds.  If you're raising a Series A, i.e. millions of dollars from one investor, use the tried and true term sheet to indicate an agreement.)

Other reminders for fundraising:
*The best investors know that the most important thing to figure out at this stage is how much your users love you.  Great engagement and word of mouth growth are magic for fundraising.
*Growth is obviously still really helpful.
*It's important to articulate why the company will eventually be in a strategically valuable position (i.e. a monopoly).
*It's important to articulate your mission.
*Don't be arrogant--this is a tactic that somehow does manage to work for fundraising some of the time for some founders, but most of the time it doesn't.

As always, reach out to us along the way with questions.

Sam

VINEBOX (YC W16) Lets You Try New Premium Wines, by the Glass

Traditional wine clubs deliver by the bottle or the case. That means that often, members end up with large amounts of wines that are unexceptional, or not suited to their tastes.

VINEBOX is a company launching out of our Winter 2016 class that is a new take on wine clubs, sending top quality wines by the glass instead of by the bottle. The VINEBOX model makes it easy and cost-efficient to explore the world of premium wine one glass at a time. As a member, you only commit to full-sized bottles when you're sure you've found something you love.

VentureBeat's Ken Yeung wrote about VINEBOX and interviewed its founders in a story this week:

“If you’re like me and enjoy wine occasionally, but find it difficult to select a good bottle, then joining a wine club won’t necessarily be a great investment for you. After all, why would you risk getting an entire bottle when you’re not sure if it’s something you want? Instead, you might want to check out Vinebox, a monthly delivery service that will ship wine by the glass to you from Europe to improve your palate.

...'Right now we live in a society where we’re all about testing things out. It’s about immediate gratification. You can listen to a sample of music or watch an episode for free,' said Vinebox chief executive Matt Dukes. 'We’re extending the example to wine because picking it can be an intimidating thing.'

Operating as a wholesaler, importer, and retailer, Vinebox is licensed to ship wine to 39 out of the 50 states (sorry, Utah). Its three largest markets are New York, Texas, and California. Customers can select from one of three tiered offerings: They can pay $35 per month, $33 for three months, or $30 per year. Each option comes with three glasses of wine each month from bottles costing between $25 and $55."

Read the full story in VentureBeat here.

Gravitational (S15) Helps Companies Run and Maintain Cloud Apps on Their Private Infrastructure

Most software vendors put their software on a virtual machine and send it to their customers. That means that the customers are on the hook to hire system integrators and other IT personnel to keep that software running -- making the entire process of installing and maintaining enterprise software difficult and often expensive.

Gravitational, a company that was part of our Summer 2015 class, launched to the public this week with an answer to this problem: Gravitational helps software companies remotely manage their applications on private infrastructure, making it unnecessary to hire additional people to run complex software on premise. Essentially, Gravitational turns every on-premise installation into a remotely managed service.

TechCrunch's Ron Miller wrote a story about Gravitational this week:

"Without a solution like the one from Gravitational, companies would have to maintain two sets of code, which is simply too costly for most companies to pull off. That meant these companies were sometimes leaving deals on the table from customers who wanted a delivery model they couldn’t offer.

This wasn’t the founders’ first go with Y Combinator, Ev Kontsevoy, Gravitational’s founder told TechCrunch. His first company, Mailgun was a member of the YC Winter 2011 class. It raised $1.2 million, before it was acquired by Rackspace in 2012.

It was through his experience working at Rackspace for several years after the acquisition that Kontsevoy began to see some difficult problems facing companies hosting SaaS programs in the cloud, which would eventually come together and lead him to launch Gravitational."

Read the whole story here.

Why YC?

People often ask us what happens at YC and what benefits you get as a YC founder. Here is a list of the resources available to YC founders.

You can also read a longer version of what happens at YC here.

Applications for Summer 2016 are open! Apply here.