Let me just add my two cents, having gone both routes. The mantra you will hear all day long is exactly that... Wouldn't you rather have a smaller piece of a huge pie than a big piece of a small pie?
But I would urge you to weigh things out. That first 7% is just the beginning. They will urge you to hire the best and brightest, time is of the essence. They will tell you not to worry about money, more VC money will flow. And then you find yourself with a big payroll and the need to raise another round, and then another, and then another. Before you know it, you've built the $100 million business you always wanted, but you aren't in charge any more and you own maybe 10 percent. Dilution happens faster than you realize. (Unless your growth is off the charts and you can negotiate amazing terms because VCs are falling over themselves to give you money, ala facebook.)
At that point the question becomes, would you rather have a hundred percent of a $10 million business or 10 percent of a $100m business? I sure as heck would rather own all of the smaller business. You don't go to the board to ask for a raise, you don't hope for a liquidity event so you can get rich one day. You don't waste time trying to convince investors that you will succeed. You control your destiny.
But to each his own. Maybe you would never be able to get to that $10m on your own. And maybe you would rather be known as the founder of something big. Nothing wrong with that. Just know that the headaches and distractions of going the VC route are legion.
I've never applied to YC but that isn't totally correct. There's no one forcing you to raise venture capital. I know of YC companies who are quite successful who have never raised money or stopped after raising a smallish angel round and still own a majority of their company. Granted they're in the minority, but it can be done.
Ya, it definitely happens. But if the company didn't need to move on to raise more money (probably the biggest argument for YC is that it will be easier to raise more), I would question whether YC was really necessary in the first place. Was YC the only place you could have raised $100k? And if you were able to do it by raising only 100k, perhaps you could have done it without their money.
1 billion percent agree with this sentiment. It's all a trick. It's all perception. It's all egos at play that want to be validated by larger egos. You're a friggin fantastic coder. You can build something that YC will accept. And you're choosing to complicate your lives, introduce all these players you just met into your circle, etc. For what? Can you really not make a living off your programming chops to sustain your own startup on the side that increasingly takes up more and more of your time as it generates money?
If you're not trying to do that, it's solely because you have ego issues and your greedy. Your willing to take this huge risk of a shittier situation with lots of stress and other people telling you what to do to prove to the world how great you are and so you can attain way more than you really need. It's a false a conception of what will make you happy--cuz it wont. I can make $65k a year in the states and live an extravagant life-style, doing all the trips and experiences I want to. All while working primarily on my own stuff and doing minor contracts here and there. I worked very hard to get here and learn these lessons. I used to make way way more, but the quality of my life was worse. I used to pursue startups with partners, making some industry I barely care about more efficient. Now i work on my own project--which for all intents and purposes, let's just say it's a surfing startup. Everything I truly love is aligned with my career skills. It's not a surfing startup, but that should paint the picture. Most of all, I don't have investors down my back, partners I'm constantly disputing with, higher percentages taken away in taxes, and generally a million unnecessary people to deal with. And actually more importantly, I'm not building some bullshit like Uber which has nothing to do with my interests. I love to code, but i think if anyone loves coding more than traveling, hanging out with friends, being in the world, you have a problem. What I'm saying is: if you're building Uber, you don't love taxis, you just better hope you're solving interesting problems. And "interesting problems" is far less interesting than traveling to Machu Pichu with my girlfriend and taking ayahuasca in the Amazon (for example).
Programming is a means to an end, not the end in itself. Programming isn't life. It's far from it. Building software companies and the business side is even farther. Those guys are going to YC for ego and greed, and like 90% will pay the price and likely fail, whereas they could have something bringing them income and quality of life right now. They could already be at the end of the road and living in the now, i.e. having a functioning product that doesn't need to go even farther to be labeled a success. If they could live off their product right now, they would be a success. The route they're gonna go--as you mentioned--will lead to more and more rounds and likely never achieving a state they're happy with. It's the essence of the human condition and addiction. It's nothing unique to startups, programmers and YC. They just would be way happier if they simplified their life. Like everyone, they'll have to find out the hard way though and complicate their life to the extreme before they realize.
But I would urge you to weigh things out. That first 7% is just the beginning. They will urge you to hire the best and brightest, time is of the essence. They will tell you not to worry about money, more VC money will flow. And then you find yourself with a big payroll and the need to raise another round, and then another, and then another. Before you know it, you've built the $100 million business you always wanted, but you aren't in charge any more and you own maybe 10 percent. Dilution happens faster than you realize. (Unless your growth is off the charts and you can negotiate amazing terms because VCs are falling over themselves to give you money, ala facebook.)
At that point the question becomes, would you rather have a hundred percent of a $10 million business or 10 percent of a $100m business? I sure as heck would rather own all of the smaller business. You don't go to the board to ask for a raise, you don't hope for a liquidity event so you can get rich one day. You don't waste time trying to convince investors that you will succeed. You control your destiny.
But to each his own. Maybe you would never be able to get to that $10m on your own. And maybe you would rather be known as the founder of something big. Nothing wrong with that. Just know that the headaches and distractions of going the VC route are legion.