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Because those are the terms that VCs offer, and the YC program is organized around getting a VC investment


Firstly, that's not my impression of YC. Reddit took only angel funding before being acquired. Very few of their startups actually seem to take VC: the ones I can think of are Loopt and Scribd. Most use angel capital only. If you actually had paying customers at the end of the 3 months, I doubt YC would object to simple revenue-based growth.

Secondly, what do you propose instead? Most banks will not give bank loans to revenue-less Internet startups, because they have no guarantee of being repaid. Bootstrapping off savings is ideal (it's what I'm doing...), but not every idea is bootstrappable.




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