Y Combinator Isn’t for Indian Startups

For years, YC has been the gold standard for startups around the world when it comes to accelerators, and India’s startup ecosystem is no exception. Y Combinator invests $500,000. $125,000 of this is for a fixed 7 percent, and the other $375,000 is invested on an uncapped MFN safe, but there’s a catch: YC only invests in corporations registered in the United States, Cayman Islands, Singapore, and Canada (where Caleb Friesen is from), so if you’re an Indian startup – if you’re registered as a private limited company here in India – you won’t be accepted into YC unless you ‘flip your corporate structure to have a parent company in one of those four countries.’

The number of Indian startups in YC has been on the decline since 2021, with their Summer 2024 batch having the lowest Indian representation in years.

But the good news is that India does have some great alternatives to Y Combinator, and unlike YC, these accelerators let you register your business in India.

Take for example Peak XV Surge, which has been around since 2019 and currently has applications open for their 11th cohort. Unlike YC which is a 12 week program, Peak XV Surge is a 16 week program, and it’s also intentionally small and curated, usually between 10 and 20 companies per cohort, compared to Y Combinator’s huge batches that are typically upwards of 200 companies. YC also writes cheques of $500,000 whereas Peak XV Surge invests as much as $3 million into participating companies.

And I wanna highlight a story, written by Jitendra Chouksey, the founder of FITTR. He got into Y Combinator, but after the initial hype died down, he found himself feeling suffocated by the heavy focus on impressing investors because that’s where YC makes its money. Remember that $375,000 uncapped MFN safe I mentioned earlier? Well, that safe only converts if you raise subsequent funding, so everything that happens at Y Combinator is intended to maximise your chances of raising that round, even if it means severely altering your product or service, which is what happened to Jitendra – they wanted him to stop focusing on community, which was the core of his business, so he quit – he left Y Combinator after 3 weeks, flew back to India, and after some due diligence, got in Surge.

Jitendra said the agreement given to them by Peak XV Surge was extreme founder friendly and the format of the accelerator was very different from YC. He said it was more cozy, there were no fixed hours, and he was given access to a network of people from legal, PR, hiring, social media, and tech who were all just a message away. Looking back, he said, “YC was all about impressing the investors, [whereas] Peak XV Surge was all about focussing on the business and customers.”

This Backstage with Millionaires short was created by Caleb Friesen.