Even YC VCs don't understand that founders who take investment still have to shift their goal from "making a great product" to "exponentially growing their product" which in most cases is at odds with just "making a great product"
YC doesn't invest in companies who aren't aspiring for valuations in the 8 or 9 figures (even if mid/high 7 figures would still be profitable).
In the recent thread "Ask HN: Those making $500/month on side projects in 2024 – Show and tell" a user posted https://convertcase.net which is making $20K/month[1].
A traditional VC would never touch that, and if the user had sought VC investment, there would need to be plans for user sign-up, a SaaS dashboard where users can manage their projects and the different kinds of entities they would need to convert, integration with CI.. who knows what else.
At that point they'd be building a completely different business, and would no longer be able to build the sustainable version that might not ever get $50,000,000 valuation. And that business would likely require them to hire more people and raise more funding
My sense of it is that YC feels its strength is in having and growing a huge luck surface area, because their dollars are worth more to founders so they get to make lots of bets, and they have a systematized process that meets founders where they are and can do a lot with super-motivated teams that want an intensive engagement while not getting in the way of teams that are more fire-and-forget.
Which is to say: their investing is interesting but it doesn't have that much to do with long-term investing in startups. If you need plural millions to reach orbit, you're going to need to pitch a 9-figure company, because big-ticket investors have portfolio math that only works for those kinds of companies.
So, to me it doesn't make too much sense to talk about what a "traditional" VC will or won't touch. For most YC success stories, both kinds of VC are involved.
But yes, YC is VC and YC wants to create unicorns and has little interest in small businesses or bootstrapping.
Joining YC is giving yourself a median outcome of failure - $0 for your common shares is the expected outcome (albeit likely true for bootstrapping founders too?).
VC incentives and rules mean that VC virtually always takes more than 50% ownership over multiple rounds. So even if founders backed a winning business, founders will usually have lost control. VC will often kick founders out (it's allowed in the contracts and is part of the game).
YC doesn't invest in companies who aren't aspiring for valuations in the 8 or 9 figures (even if mid/high 7 figures would still be profitable).
In the recent thread "Ask HN: Those making $500/month on side projects in 2024 – Show and tell" a user posted https://convertcase.net which is making $20K/month[1].
A traditional VC would never touch that, and if the user had sought VC investment, there would need to be plans for user sign-up, a SaaS dashboard where users can manage their projects and the different kinds of entities they would need to convert, integration with CI.. who knows what else.
At that point they'd be building a completely different business, and would no longer be able to build the sustainable version that might not ever get $50,000,000 valuation. And that business would likely require them to hire more people and raise more funding
[1]: https://news.ycombinator.com/item?id=39119230