When I first applied to YCombinator back in 2021, I was certain we'd get in. Our product was solid, we had early traction, and I believed in what we were building.

Then the rejection email arrived.

We eventually applied two more times—three rejections total.

It's funny how we develop these paths about how our companies will turn out. Often, those paths include venture capital and a prestigious accelerator like YC. It feels like we're doing it wrong when it doesn't work out that way.

If you've just been rejected from YC, this newsletter is for you. Let me share what I wish someone had told me after that first disappointing email.

What to do when YC says "no"

My first instinct after getting rejected was to improve our application and try again immediately. But honestly, that's probably not the best use of your time.

Instead, here's what I'd recommend focusing on:

Focus on your go-to-market strategy

The whole point of YC (or any accelerator) is to help you grow faster. So if they rejected you, grow anyway.

Most early-stage founders I talk to are obsessed with their product. They'll spend weeks perfecting features, tweaking UI, and fixing bugs. But they'll often neglect the most important question:

"How do I get this from customers who will pay for it?"

For us, focusing on go-to-market meant figuring out exactly how to reach DEI leaders at companies with established ERG programs. We tried several strategies, including LinkedIn outreach and cold emails, but we eventually landed on a robust content strategy centered around webinars. At one point, 60% of our pipeline was inbound, and it was all because we were intentional about establishing our go-to market.

Your GTM doesn't need to be fancy. It just needs to work. Figure out how to reach your customers consistently, and your business will suddenly become much more viable—with or without YC.

Find your Ideal Customer Profile

This ties directly to your GTM. You can't effectively reach your customers if you don't know who they are.

When we started Chezie, we thought our ideal customer was tech companies with 1,000-5,000 employees. Why? Because they seemed "progressive" and had younger workforces more open to new software.

But after three years of testing, we've learned that traditional enterprise companies often make better customers. They have more established DEI teams, larger budgets, and more consistent buying processes. Plus, their sales cycles weren't longer than tech companies (sometimes they were shorter!).

Don't make assumptions about who your best customers are. Let the market tell you. Talk to people who love your product, analyze their shared interests, and focus your efforts there.

I wrote in-depth about the importance of letting the market define your ICP (rather than choosing it yourself) in a previous newsletter that you can check out here.

Consider alternative funding sources

Getting into YC often signals the start of a fundraising journey. But there are plenty of other ways to fund your company.

For Chezie, we've pieced together funding from multiple sources:

• $20k of our own money

• $310k from grants

• $160k from friends and family

• $110k from pitch competitions

• $100k from an accelerator (not YC)

• $470k from venture capital

• $25k from revenue-based financing

• $100k in loans

Each of these sources had different expectations and requirements. Grants, for example, often want to see community impact. Friends and family are investing in you more than your business idea.

These alternative funding sources can be more accessible than VC, especially for underrepresented founders. Plus, they often come with fewer strings attached regarding growth expectations.

Speaking of accelerators, there are tons of great programs out there beyond YC:

• 43North - $1M for 5%

• PearX Accelerator by Pear VC - $250-2M (terms vary)

• Sequoia Arc - $500k-1M (terms vary)

• AI Grant - $250k on an uncapped SAFE

I found this list of top startup accelerator programs on Reddit worth checking out.

Don't get me wrong—if VC is the right path for your business (or if you want to), then pursue it. But don't assume it's the only path. Many successful companies have bootstrapped their way to profitability or used creative funding approaches to get where they are.

Remember, the goal isn't to raise money. The goal is to build a sustainable business. Sometimes, raising money helps with that, but not always.

Why you might not want to do YC anyway

Let's be honest: there are some good reasons why not getting into YC might be a blessing in disguise.

You don't necessarily need the money

There are cheaper ways to get that money if you're mainly applying to YC for the $500k standard deal. And by cheaper, I mean giving up less equity.

YC's standard deal is $500k for 7-12% of your company. Your company may be valued at just over $7M post-money, depending on your terms. Is that a fair valuation? Maybe. But there are other ways to get similar funding with better terms:

• Angel investors might give you better terms, especially if you've got early traction

• Customer prepayments mean customers pay you for the product at a discount before it’s ready.

• Grants that require no equity at all

Don't get trapped thinking YC is the only way to get your initial funding. In today's market, with all the tools available to founders, you can build substantial businesses with far less money than you might think.

You can build at your own pace

One of the less-discussed aspects of joining YC is the pressure cooker you're stepping into. The program is designed to push you toward rapid growth – which can be fantastic if that aligns with your vision but brutal if it doesn't.

When you're in YC, you're expected to show dramatic growth week over week. The focus is on metrics that impress investors at Demo Day, not necessarily building a sustainable business for the long term.

Without YC, you get to determine your own pace. Maybe you want to grow more deliberately, focusing on profitability over growth. Perhaps you need time to understand your customers before scaling. Or maybe your business model doesn't fit the "up and to the right" graph that VCs love to see.

Building at your own pace means defining success on your terms. Not someone else's.

Oh, and one more thing – much of the knowledge you'd get in YC is readily available for free. Their YouTube channel has hundreds of hours of startup advice from the same partners advising you in the program. You can essentially get a YC education without actually being in YC.

The bottom line

I understand now that Chezie isn't the right kind of company for YC (at least not as it is). I regularly think about the sliding doors and what would've happened had we gone through YC.

We probably would've pivoted like Everyspace (a competitor) did. They moved into an entirely different space, becoming a customer support app.

For us, Chezie was more than just a business opportunity; it was a chance to make a difference in the work experiences of people from marginalized communities.

We're not as significant or growing as quickly as I imagined when I first applied to YC with stars in my eyes. However, there are over 150,000 employees who benefit from the communities and ERGs that Chezie supports.

And that's not nothing.

Not getting into YC doesn't mean your company won't succeed. It just means your path might look different than you initially imagined. And sometimes, that other path is exactly where you're meant to be.

Catch you next week,

Toby

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