Y Combinator vs Techstars: startup incubator comparison by a three-time alum

Make something people want and do more faster.

Being one of the rare founders to be both a Y Combinator and Techstars alum, I’ve had the privilege of going through two of the top accelerators in the world. Unlike YC and 500 Startups, which seem to have more common overlaps, there have been very few founders who’ve gone through both YC and Techstars programs.

Over the years, I’ve been asked countless times about what my experiences were like going through the programs, how helpful the networks were to my startups, and how I’d recommend fellow founders to choose which one to join.

I have the utmost respect for Paul Graham, Sam Altman, David Cohen, Brad Feld, all YC partners and Techstars directors. YC and Techstars are the two earliest accelerators ever created, yet they are now being run with very different visions and philosophies. Depending on what your goals are, you might find one of them to be a better fit for you and your startup.

Program terms

When Paul Graham and the original founders of YC created the genre 10 years ago, the deal was $11,000 + $3000*n for 2-10 percent. A few iterations later (including the $150K Start Fund and $80K YCVC), YC’s terms are now $120k for 7 percent. Techstars’ terms are now $118,000 for 7-10 percent equity.

All of the terms are comparable – the implied valuations would fall between $1.2M – $1.7M, which is definitely on the low end of the spectrum in this day and age if you see this in pure monetary value. However, the valuation is somewhat arbitrary, and depending on your background, the valuation you’d receive in your next funding round as part of the accelerator group will usually be higher than what you’d receive had you raised by yourself.

I’ve been asked many times by experienced founders or startups with traction questioning the merit of giving away 7 percent to an accelerator like YC or Techstars. My answer has always been – it’s 100 percent worth it, and if you get in, unless you already have a Series A term sheet from a top VC in your hands, you’d need to be either stupid or part of the PayPal Mafia to not take it. In most cases the price would pay for itself with the higher valuation you’d get via the help of the network (Paul (in)famously called it an IQ test) . Most importantly, the value of being in the alumni network transcends beyond your current startup and stays with you forever in your entrepreneurial journey.

During the program

YC is very freeform. There’s no office (and there’s probably no easy way to fit in 85 teams under one roof now). There’s a weekly dinner, where we’d get to meet with super baller people like Mark Zuckerberg and Peter Thiel over chili rice once a week. There are also office hours with YC partners and group office hours with batch mates that we can book as often or as little as we’d like.

The weekly dinner and office hours act as great checkpoints for self-imposed weekly milestones. As you see other great batch mates making progress, this creates an environment for extremely healthy competition that drives you to push harder.

A typical YC dinner – I actually quite liked it.

Going through an accelerator is all about getting a lot of things done in a short period of time. In its own words, YC’s goal is “to create an environment where you can focus exclusively on getting an initial version built.” They weren’t kidding when they said that. Growth is everything for a startup, and Paul famously asked startups to focus on 1 single metric and do whatever it takes to make it move up and to the right. To drive this point home, at our first weekly Tuesday dinner, Paul told us to do only three things during YC:

• Write code
• Talk to users
• Exercise

Interactions with batch mates & alumni

Demo Day

Fundraising

After the program

Philosophical difference

Which one should you choose?