Rejected from Y Combinator?
Congratulations. You might not be one of Sam Altman’s advisees anytime soon, but you’re certainly in good company. Yes, YC has produced unicorns like Twilio, Stripe and Airbnb, but they’ve also rejected a lot of now successful companies like SendGrid, Munchery and Buffer, who even published their rejected YC application.
When you don’t have a lot of connections, startup accelerators can feel like the silver bullet you need to raise capital. While top tier accelerators regularly make headlines and produce unicorns with enviable valuations, they’re not the only route to success. In fact, for some companies, it’s just the beginning.
Last summer, for example, user onboarding software Chameleon was rejected from both Y Combinator and 500 Startups. With almost no connections in Silicon Valley, they weren’t sure how they were going to raise the funds they needed to succeed without the introductions and mentoring these accelerators would have given them. They raised $1.9 million anyway.
Here’s how companies like Chameleon, Sendgrid and Buffer manage to succeed by finding alternative routes after getting rejected from top startup accelerators.
Raise from friends and family to build a prototype
Oftentimes, raising from friends and family gives founders the run rate to build the MVP version of the product they need. It’s what gave Sara Blakely the initial investment she needed to start Spanx. Sara called up people as far back as the 4th grade to ask if they would invest, and was able to turn an initial $5,000 investment into an undergarment empire. That small amount from friends and family allowed her to create a prototype that she then sold on cold calls to companies like Neiman Marcus.
An accelerator might have helped move the process along, but a family and friends round is what gave her the rope she needed to start the company.
Similarly, Pulkit Agrawal and Brian Norton from Chameleon were incredibly thankful that they had raised around $50,000 from family and friends before getting rejected from accelerators. If they didn’t have that $50,000, they wouldn’t have been able to build out a fully functional demo and go into private beta with companies like mobile analytics tool Amplitude.
With the insights they learned from that beta testing, they were on the road to creating a better user onboarding product that the public would want to invest in.
Jumpstart investor interest by pitching on online conferences and contests
Getting in the room with investors is certainly easier if you have a lot of…