What non-commercial projects are interesting Y Combinator

Original author: Robbie Walker
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In 2013, Y Combinator donated its first interest free grant to Watsi. Since then, we have financed 25 non-profit startups in various areas, including global health (Noora Health, New Incentives), poverty alleviation (for example, No Lean Season, New Story, Zidisha), democracy (vote.org, ACLU) and philanthropy as as such (80,000 hours, Center for Effective Altruism). Supported Y Combinator non-profit organizations continued to be funded by the companies GiveWell, Open Philanthropy Project, DRK and others.

The idea of ​​the program is simple: we treat non-commercial startups in almost the same way as commercial ones. Non-profit organizations receive $ 100,000 of funding and go through the standard YC program, participating alongside commercial projects. We help start-up founders focus on the steady growth of a key metric and on creating what people want.

Many have asked us: how do you choose non-profit organizations to finance? We consider four key factors:

  1. Team
  2. Big problem + big solution
  3. Proved or prospective program
  4. Fits Y Combinator

Read on for more details, and if you think your organization is suitable, submit an application with the next recruitment.

1. Team

Great non-profit organizations are built by great teams. What we are looking for here is similar to what we want to see in commercial startups .

2. Big problem + big solution

We finance teams that work on solutions that will reach a large number of people and bring a large number of social benefits for each of them.

This means that you need to work on a big problem! You also need to have a unique idea of ​​how to fix the difficulties that do not solve this problem.

One such hindrance is raising finance. Raising funds for nonprofit organizations is a rather complicated process, so try to make it necessary for you to need this as little as possible. Be alert for cost effectiveness. If you create economic value for your stakeholders, try to capture some of them as income so you can attract more people.

Problem areas are often not obvious. If you are working on a problem that is already receiving a lot of attention, this may mean that the problem is more complicated than it seems. What is unique in your decision that will help you succeed, while others could not achieve it? Conversely, working on unsolved problems can be a great way to maximize your access area.

3. Proven or future program.

For commercial organizations, consumption and income are strong indicators of impact. For non-profit organizations, impact measurement is much more difficult. Measuring the results of non-commercial projects can take years with the help of long-term A / B testing of the program, conducted by experts in this field.

Unfortunately, it turns out that with thorough testing, many non-profit organizations have no influence whatsoever. David Anderson of The Coalition for Evidence-Based believed that at least three-quarters of social programs have little positive effect — or none at all!

For this reason, we first look for non-profit organizations that have already been tested with thorough research. For example, No Lean Season (W17) gives farm workers $ 20 for a bus ticket so that they can go to the city for a temporary job during the period between sowing and harvesting. Studies by economists at Yale University have shown that grantees ultimately earn $ 200 more than those who did not receive a grant.

However, these studies are expensive and take years, so we also fund non-profit organizations that are probably more effective than those that already exist and that have a reliable plan to test their program. For example, New Incentives (S16) used a well-known prospective cash disbursement program and conducted their own randomized controlled trials to find the most economical ways to apply this idea.

Finally, some ideas have great potential for growth, but they are difficult to prove. For example: it may take 10-20 years to finally prove whether the educational program works. However, we have funded Dost Education (W17) due to their new and potentially highly profitable approach that takes advantage of the introduction of mobile phones in poor regions of India. Non-profit organizations in this category should still be obsessed with metrics, which are the leading indicators of long-term impact.

4. Fits Y Combinator

The Y Combinator program is most valuable for groups that create a tangible product or service that we can help you measure and improve. We are even more likely to help technology-based groups, although we do not consider this a strict requirement.

We can also best help non-profit organizations that already have progress and support, rather than groups that are waiting for an opportunity to start. Again, this is not a strict requirement, but we love to see the efforts already being made.

Finally, culturally, we believe that the best non-profit organizations will be frank and that this frankness will accelerate innovation in all organizations. For example, we like the fact that Watsi makes all its financial indicators public .

Frequently asked Questions

Should we apply as a non-profit organization or a commercial one?

Great question! Before applying as a non-profit organization, you must really ask yourself why you cannot be commercial. Profit has many unfair advantages over non-profit organizations: accelerated growth at the expense of income and a reliable ecosystem of fast moving assets. If you can solve a social problem as a commercial organization, it is almost always the fast way! We would also like to finance you in this case: an investment instead of a grant.

How much do you provide?

We provide 100 thousand as a grant for non-commercial activities (without equity participation).

Do all founders have to stay in the bay area for 3 months?

The YC program simply works better when everyone participates in person. But we also understand that the work of many non-profit organizations is outside the United States. You can leave one startup founder in the country where your programs work, and the rest, including the CEO, must live in the bay area for a 3-month funding cycle.

Do you finance programs in larger organizations?

Yes - No Lean Season, for example, is a program within the larger organization Evidence Action.

What program areas do you particularly care about?

We list some ideas well suited for non-profit organizations in our request for startups, including global health ,food and agriculture , diversity and improved democracy .

At present, we believe that global health startups are especially able to meet our criteria, since there are many proven programs, as well as major sponsors who want to scale the best.

What does it mean to be the founder of a startup in the context of a non-profit organization?

For non-profit organizations there is no simple definition (as opposed to a commercial organization where we can use our own capital).

Founders should be people who are fully dedicated to this organization and in the foreseeable future will become key decision makers and leaders in the organization. Founders do not have to be with the organization from the start.

Should we be 501c3?

Not. In fact, we can help you figure it out.

You must be able to become 501c3 or have a budget sponsor 501c3. We do not provide grants to 501c4s or B-corporations (although in the case of B-corporations you can apply for a profit!)

How can I apply?

Complete this app ! We finance two start-ups a year - the next application deadline is October 3 for the 2018 winter program.

What if my question is not answered?

TryGeneral YC FAQ (Frequently Asked Questions YC).


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