Other VCs want to believe in "proprietary deal flow" and their own ability to worm into hot companies. Probably because it seems more a sure thing than, gasp, actually judging startups on their merits, like YC at least tries to do.

It's an approach that has clearly worked very well for YC and you can't fault them for doing what works, but it's good that not everyone uses this approach since a lot of good ideas and good people would never get funded this way. It's also pretty costly for founders: each team spends hours or days putting together their application and potentially several days traveling to the interview (unless they're lucky enough to be in the bay area already), all for a few minutes of YC's time and a tiny chance of acceptance.

On the other hand, most VCs, if they're going to talk to you at all, will schedule a one-hour meeting, which they're happy to do over Skype if you aren't local. Meanwhile, getting an intro typically requires far less time investment on the part of the candidate compared to a YC-like application process (you just need someone to send a short email). But, yes, you have to get that intro, so if you don't have connections, it's a problem.

I don't think you can really say that either method is objectively more or less fair; they are simply different kinds of processes that have different kinds of bias and costs. I think it's important that YC exists as an opening for the large number of great teams who aren't well-connected, but I also think that if every VC worked like YC it would make fundraising much more costly for founders and a lot of great ideas and people that get funding today would not succeed under such a system.

Really, the best thing is for lots of VCs to be doing lots of different approaches, even if each one has biases.

The idea that the best entrepreneurs are good at things like personal networking, or ladder climbing, is clearly false.

One example: Elon Musk didn't have the "hustle" to talk to anyone in the Netscape lobby, when he marched in there to get a job. He nervously stood around for a while and then went home in quiet shame. That's Elon Musk before you knew him.

First Capital realizes this, and is making a move to capture the important opportunities they would miss out on otherwise.

Unfortunately at scale YC operates today (~2,500+ submissions per batch) this is no longer true. It's simply too difficult to get through all of that noise without "knowing someone", and the exceptions to that rule are getting rarer every batch.

Source - ask any YC Alumni candidly.

Source - YC partner.

Have a great idea, a great team, show some traction. Traction probably doesn't have to be revenue. Just find something that shows other people want what you're building. Great team means you're the best team for your idea. Not necessarily Ivy League school or Google/Facebook/Amazon employment.

Our founder split made them worried / didn't fit with their thesis. That seemed to be the only thing, based on our back and forth.

So, keep in mind that YC is looking for something very particular. It does strongly suggest however that YC is very open to taking teams they don't know as long as they fit their official and unofficial criteria. They make a serious effort to be transparent but they are also oberworked and are pretty much a black box to most startups they reject. They surely were for us, I just got lucky to get an answer.

When we make an accelerator, it'll also be based on a certain way of doing things. But it'll be very different. We believe that standardized platforms make a huge difference - YC has one as do other accelerators. But we have an actual software platform on which others can build their apps. It would be as if FB ran an accelerator program to develop new businesses on top of the FB platform. Our program could have actual measurable metrics to determine who is funded further and who is not.

> Should everyone apply to First Round through the OpenApp?

> No. The best way to reach us is still through a referral.

Most investments come from warm referrals or investors you meet and build a relationship with. I would be surprised if this got you a serious meeting with a partner who can make a decision.

How is this different than YC you ask? YC makes their terms clear and upfront (120k for x%) and has a whole process for reviewing all the applications you send in. Not only that, it is in YC's best interest to introduce you to other investors.

Case in point a VC whose east coast venture recently imploded was speaking at a conference. After the conference ended entrepreneurs started to approach and pitch him. He acted like he was king crap and he didn't to be bothered by entrepreneurs, but umm that's what he signed on for. He even later made a rude remark on Twitter about an entrepreneur he just met(didn't name names).

VCs like him... please get over yourself, be humble/nice and don't be D*&K! Because one day like the VC I noted above, your on cloud 9 and the next you look like a fool/complete failure in front of the community!

Series A rounds are typically slightly north of 5 million. It's hard to make out, but seed rounds seem to average some fraction of a million.

So the characterization of 1-3 million rounds as "seed" does seem odd.

On a side note, I've grown be highly suspicious of any accelerator / VC that refuses to create their own form, and instead uses Angel List / F6S for the forms. If they're that lazy, I'll bet that you're dealing with the used car salesman kind of VC.

The second reason is that the questions they ask are the right ones. We don't want to read a long executive summary, we need a quick intro video of the founders and/or the product, a paragraph on what you are trying to build, and any details on traction if you have some. Not a 4-page executive summary with 5-year bogus financial forecast (like older angel platforms used to ask).

I'm curious why even an "open application" has big bold lettering saying that referrals are favored over the application itself. Is spam really such a huge problem, or is this some sort of signaling mechanism?

A parent would rather hear about a good babysitter referred by a friend rather than watch 10 video presentations of babysitters that nobody in her circle knows. The same goes for finding doctors or lawyers. Your colleagues opinions on professionals they know will be more helpful than watching 10 videos from unknown attorneys. An investor is not any different in preferring referrals over videos.

Check out the importance that Larry and Sergey placed on being referred to Sequoia and how they needed help to make it happen. It is a story told by investor Ron Conway from one of the YC startup videos:

https://www.youtube.com/watch?v=uFX95HahaUs&feature=youtu.be...

https://www.youtube.com/watch?v=1z87RGFGuxQ&feature=youtu.be...

According to some, investor class has already undergone some major disruption. And that's forcing them to think of better ways to not screw up. But what we're obviously going to see next is only more blood on the dance floor.

Sit back. Enjoy your work.

  "Furthermore, for the first few months of this experiment, 
  we will review only the first 100 interviews submitted
  through the Open App each month."

(A) Bluntly likely none of those people knows anyone at First Round Capital. (B) Bluntly, with the exception of Howard Morgan, the qualifications of the people at First Round Capital in business, research academics, and technology are not high enough to be respected by the people I know. Net, the people at First Round Capital and myself know nearly none of the same people.

Moreover, for my technology startup, there is no one at First Round Capital with business, academic, or technology qualifications good enough for me to hire for a significant position. I'd have a tough time respecting any of them to take their advice on my startup.

Once, just once, I did call a person I know, the founder, COB, CEO of a major, world famous company and asked for an introduction to his CIO. The CIO and I talked and had a nice review of history, and he gave me an introduction to a partner at a venture firm with a partner on the BoD of the company. Net, the introduction meant nothing -- the venture partner paid no attention to the introduction or my project at all; we did communicate but just as in a cold call.

I never again wanted to bother any of the high end people I know, bother them to introduce me to a venture firm just to get past some absurd hoop the venture firm erected but ignored.

Net, venture firms who want introductions get put at the bottom of my list; the venture partners and I nearly never know or respect the same people; I'm not going to pester the good, important people I know and respect to have them waste their time communicating with people as poorly qualified in business, research, and IT as all but a small number of venture partners. No way.

Next, in contacting venture firms just via cold calls, I've had little trouble getting through and getting a response including several hour long conference calls. In particular well known venture partners at well known venture firms are aware of my work on my project, all without any introductions.

Net, it appears to me that introductions are not really necessary and not very helpful.

What was helpful was having a team: For a while I did that, but too soon I encountered the common problem -- disputes. So, now I'm a solo founder. There are some serious advantages being a solo founder, but it does appear that getting a phone conversation with a venture partner as a solo founder is more difficult. For whatever reasons, venture firms don't like solo founder startups.

Moreover, it appears to me that, really, venture firms have their feet locked in concrete that, with only some rare exceptions, they just will not pay much attention to an IT startup before the software is developed and there is significant traction growing rapidly. E.g., venture partner Fred Wilson at his Union Square Ventures recently made it clear on his blog AVC.com that he just will not fund software development. Okay by me.

But at

http://a16z.com/2014/07/30/the-happy-demise-of-the-10x-engin...

with

"The Happy Demise of the 10X Engineer"

By Sam Gerstenzang

is in part:

"This is the new normal: fewer engineers and dollars to ship code to more users than ever before. The potential impact of the lone software engineer is soaring. How long before we have a billion-dollar acquisition offer for a one-engineer startup? How long before the role of an engineer, artisanally crafting custom solutions, vanishes altogether?"

So, Andreessen-Horowitz is admitting the possibility of a solo founder creating a billion dollar startup.

I don't see just why not: Venture firms want the code written and traction significant and growing rapidly. If the startup is ad supported, then it doesn't take much traction to let a solo (single) founder startup have cash enough for organic growth, that is, without equity funding. Then, if enough of the 3+ billion Internet users like the work a lot, presto, bingo, a billion dollar startup.

Indeed, for my startup, I believe that, as the founder, I need to "know my business" (a traditional criterion), and that includes the code, the servers, how to please the users, how to please the paying customers, how to handle the billing, bookkeeping, accounting, legal, etc. So, I'm not seeing where a larger founding team is necessary. First hire? Likely an Office Manager, and not a co-founder.

There is some irony: Necessarily venture firms are looking for highly exceptional projects, but their means of looking are mostly to compare with simplistic patterns from the past -- not promising. And as in

http://www.kauffman.org/newsroom/2012/07/institutional-limit...

and

http://www.avc.com/a_vc/2013/02/venture-capital-returns.html...

on average the venture firms are not making much money doing this.

Thankfully the US NSF, NIH, DARPA, various other parts of the US DoD, commonly ignore simplistic patterns from the past and, instead, actually get expert evaluations of projects submitted on paper. Moreover, the history is that projects that do well on such evaluations have much better batting average or ROI than US IT venture capital.

E.g., for the Manhattan Project, the US DoD (then the War Department) didn't reject the project because it looked nothing like the long history of bombs.

The CIA didn't reject the SR-71 because it looked very different from anything in the past of aviation.

The US Navy didn't reject the first satellite navigation system because it looked nothing like anything in the history of navigation.

NSF prize winning research rarely looks much like the past.

The Human Genome project funded by the NIH looked very different from anything in the past.

Intel is shooting for 10nm -- again, new ground significantly different from anything in the past.

But only a tiny fraction of US IT venture partners have the ability, say, of a project reviewer for a leading peer-reviewed journal of original research or the NSF or NIH, to review leading-edge technical material. That's been their business model. Okay.

Yes, venture firms on their Web sites commonly claim to have "deep domain knowledge". Curious: Only a tiny fraction of US IT venture partners have the qualifications even to be admitted to the graduate program where I got my Ph.D.

Indeed, Google search

"deep domain knowledge" venture

gives "About 40,600 results". I've read the backgrounds of hundreds of US IT venture partners, and I doubt that I've seen over 10 that have the qualifications for "deep domain knowledge" in anything very technical. I've seen a lot of lawyers, history majors, MBAs, international studies majors, English majors, etc. and darned few math, physics, engineering, or computer science majors.

It looks like in their educations, only a tiny fraction of the US IT VCs liked the STEM fields.

I published a paper in computer science. The paper has a typo. Here I make a public bet, of one dollar, that no US IT venture partner on their own can find the typo. Should such a person wish to try, then reply here, and I will send a PDF of the paper.

Hint: It would be good to be able to find, say,

Patrick Billingsley, 'Convergence of Probability Measures'

fun and easy reading, and for that should have greatly enjoyed, say, at least the first (real) half of

Walter Rudin, 'Real and Complex Analysis'

and

Walter Rudin, 'Principles of Mathematical Analysis'.

Come on US IT VCs: You've got "deep domain knowledge", high determination, are all-go, never stop, never give up, commonly leap tall buildings at a single bound, have over the top self esteem, etc. Should be a piece of cake for you, right?

I'll save you some time:

(A) Look up the definitions of countability and of a sigma algebra. Then show that there are no countably infinite sigma algebras.

(B) For positive integer n, the real numbers R, R^n with the usual topology, and subset C of R^n closed in that topology, show that there exists function f: R^n --> R zero on C, positive otherwise, and infinitely differentiable. Notice that examples of C include Cantor sets of positive measure, the Mandelbrot set, and sample paths of Brownian motion. Curious result.

If you find (A) and (B) easy, then by all means, also with your "deep domain knowledge", read Rudin and go for the typo also using Billingsley.

What does the paper with the typo have to do with IT? It's likely the best thing so far for detecting zero day problems in large server farms and networks.

Point: Only a tiny fraction of US IT venture partners have the "deep domain knowledge" necessary to evaluate new work in information technology.

So, they have to evaluate based mostly just on traction.

As far as I can tell, nearly everything else US IT VCs say they want to see is just smoke to cover the one thing they really want -- traction significant and growing rapidly.

Point: Due to the possibility of a solo founder with tiny burn rate, waiting for traction will be too late.

Can a solo founder of an IT startup hope to be successful without equity funding? Should be: All across the US, cross roads to the largest cities, solo founders do well mowing grass, selling pizza or hamburgers, pumping gas, paving driveways, ..., big-truck, little-truck distribution businesses, etc. without equity funding. IT should be an advantage.

> Should everyone apply to First Round through the OpenApp?

> No. The best way to reach us is still through a referral.

Outcome: Zilch.

But, the current makeup of the team (presumably) indicates that the hiring process didn't rely on venues where other nationalities/races predominate. You might respond that the team hired the best candidates available - which could indeed be true - but GP's point is worth raising, if inelegantly phrased.