Given that there are cheaper sources of funding, and most of them have no track record and extremely limited credibility, I would look much deeper...and consider other alternatives. Charles River has an early stage arm that does a lot of deals, for example, and has a good reputation. Angels are another option. While this "new model" of investing is compelling for its high success rate, when executed by YC, it's not necessarily the best way to raise money. We took money from YC and have never had any regrets about it...but I can't think of any other situation where we'd give up that much equity for that little money. But, you'd have to decide that for yourself.

They do seem to have the second most well-attended demo days though. I don't know about how their connections compare to the others on that list. That might be the deciding factor for me.

YC has had a couple of pretty big acquisitions and five (I believe) small acquisitions. More importantly, I think there are at least three or four still on-going companies that will be very large successes for YC. I won't name them, as it might imply that I think others won't be big successes or it might start a flame war over "no way that blah blah idea can generate significant revenue, no matter how many million hits they get", or whatever.

And the "at this stage" bit was in reference to the fact that about 50% of the first batch of YC founders are now rich, by a reasonable definition of "rich". Each batch since then rolls off a bit, in percentages, but the bets are getting bigger and take longer to play out (our company, for example, would not be for sale for a low millions acquisition offer...but the vast majority of the exits for YC and TS companies have been in that range...and I know that a few other YC companies are also looking to build larger companies than that).

Anyway, by any metric YC has a lot of successful companies in their stable. Traffic for a few YC companies is just through the roof (Scribd, Justin.TV, Weebly, Reddit, Disqus, probably others). A couple of others have really impressive reach outside of the usual Web 2.0 set and into the "real world" (Loopt, in particular, though Inkling Markets is everywhere, too...my dad has used Inkling's product, and he just got broadband for the first time last week).

the biggest problem with these YC clones is two-fold.

first, most of the clones' founders have a)either not founded a start-up b)founded a start-up in a completely different field.

second, the lack of technical ability isn't the most conducive, to, ya know, doing a start-up in the early stages based entirely on code. ideas from the founders are pretty much fluff, because they don't understand rudimentary concepts of code, what can and cannot be done, how long things could possibly take, etc.

Alternatives to YC include Sequoia, angels, other VCs, etc. and not just YC clones. It's an expensive source of money, and if the company isn't delivering a lot of extra value (which YC has consistently been shown to do, and none of the others, with the possible exception of TechStars, has shown that) it's probably a bad deal.

And, as for "would you go to a VC instead of Sequoia"...yes, but I wouldn't go to a VC that I have no knowledge of, and that has no track record. I'd accept money from a top ten VC (assuming reasonable terms and consonance of vision), but I'd rather build a company on its own revenues than take money from an investor I don't believe in, or I don't believe is capable of grokking our long term vision for the company.

One thing to remember when looking at all of these things:

The value they give is not in the money. $10-20k is laughable in investment terms. In my opinion YC is more like a ready-made board of advisors than a seed investor. The question really boils down to, for all of these accelerators, "Are they good enough advisors to give up 5-ish percent of your equity for?"

I think YC's proven itself there. I'd be interested to see what some TechStars alums have to say.

PS:I neither did YC nor Techstars, just my opinion

Most VC's, even poor ones bank on 2/10 paying for the failures, otherwise they go out of business. Has YC provided > 20% success rate - I don't know, I'm asking? How does YC even define success?

Sequoia and YC do not have a monopoly on technology success, far from it. There are many thousands of excellent, proven technology investors around the world available to work with. Pretending your idea is better than all but the "top 10" is laughable really.

PS: Mentioning YC in the same sentence as Sequoia isn't really fair to Sequoia given their success.

In terms of money: a YC dollar is worth no more than a dollar found on the street.

I guess my answer is yes.

Once you have your product and their credibility then you need to wield it carefully to get to your destination.

It seems to me, and I may be wrong, that the YC system has an extra bit of credibility that can be spent even if a person isn't successful with what they built in YC they can build something new and still have a better then average chance.

I thought the primary purpose of YC was to instill morale.

http://www.google.com/search?q=+site:www.paulgraham.com+%22y...

Morale is tremendously important to a startup—so important that morale alone is almost enough to determine success.