Y Combinator warns of funding woes after unveiling latest start-up batch

The founder of Y Combinator says venture capitalists are becoming increasingly selective about the start-ups they fund, after revealing the latest batch of the accelerator’s start-ups.

 

According to Paul Graham, who founded the US-based start-up incubator in 2005, the funding outlook for start-ups is “getting more unpredictable”.

 

“There’s more entrants, but just as few finishers,” Graham said during Y Combinator’s Demo Day.

 

Twice a year, Y Combinator’s latest batch of start-ups present to investors. There are 84 start-ups in this batch, topping its previous effort of 65.

 

According to Graham, venture funds are changing their strategies to focus more on early stage funding, but are becoming increasingly picky about who will receive further rounds of funding.

 

“If I was a VC, I’d be easier on the seed round and harsher on the B round. If a company hasn’t gotten its shit together by the B round, it probably won’t,” Graham said.

 

The comments come less than three months after Graham said start-ups should lower their fundraising expectations in light of Facebook’s disappointing IPO.

 

Meanwhile, here’s three standouts from the latest Y Combinator batch:

 

1. FundersClub

 

Serious investors, especially those outside of Silicon Valley, often lack access to promising start-ups, so FundersClub has created an online private marketplace where accredited investors can fund private companies and start-ups.

 

“Investors have the ability to invest in one particular start-up fund of their choosing,” the company says on its website.

 

“Also, investors interested in investing across all active funds can invest in the FundersClub Bundle, which lets investors spread their investment across all funds on the platform.”

 

2. Rent.io

 

Rent.io says it wants to “optimise pricing of the single biggest recurring expense” – rent.

 

“Rent.io was created to be the independent, definitive pricing source for residential real estate rentals,” the company says on its website.

 

“Rent.io helps property managers and real estate investors accurately assess the revenue potential of rental property portfolios by providing accurate, granular and timely data and analysis.”

 

3. BufferBox

 

BufferBox is building a network of large lock boxes scattered across cities and transportation networks, where people can get packages securely delivered.

 

This means consumers don’t have to sit at home waiting for their shipments, and shipping companies don’t waste money on multiple delivery attempts.

 

Google and Walmart have already signed up to the service.

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