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70% Of Startups Offer Remote Work Options As Hiring Heats Up, Y Combinator Data Shows

Startup hiring during the pandemic boomed, as did the expansion of remote roles. That’s according to Y Combinator, the influential startup accelerator, which quietly launched its Work at a Startup (WaaS) platform back in 2018 to help companies hire the right people.

Beginning the hiring process is a challenge that program director Ryan Choi said founders often describe as among “the hardest things about building their startups.”

Now, more than three years into the program and almost two years into a pandemic, those challenges of startup-building have in many ways increased, with a competitive job market and more funding into seed-stage startups.

When a job seeker joins the WaaS platform, they have access to Y Combinator companies that are actively recruiting, currently numbering around 1,200. Once a company exits, they graduate out of the WaaS platform.

“We make sure that founders are on the platform, so you get messages from founders who are building these companies,” Choi said. 

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Hiring and remote work ramp-up

The two big trends YC sees in its data are a ramp-up in hiring and the rapid shift to remote work. 

The platform has also seen a significant increase in job listings—6.5x as many in 2021 versus 2020—with the increase in hiring mirroring the blockbuster startup funding year of 2021

Many of those jobs are now also offered as remote roles. The WaaS platform has seen a 6.4x increase in remote-friendly jobs in 2021 versus 2020, with 70 percent of jobs remote or could be remote. (Remote is defined as a company where at least 25 percent of roles have a remote option.)

In 2019, just 15 percent of small companies and 10 percent of large companies on the platform were building remote organizations. In 2021, that shifted dramatically to 86 percent of small companies and 85 percent of large companies. 

New deal terms

Y Combinator also announced new deal terms earlier this month, increasing the amount of capital it gives to each startup accepted into its accelerator program from $125,000 to $500,000. 

The startups receive this money all at once, but the funds are broken into two components. A check for $125,000 gives Y Combinator a post-money stake of 7 percent. The other $375,000 is a “Most Favored Nation SAFE,” which translates to “the lowest cap safe (or other most favorable terms) issued between acceptance into YC and the company’s next equity round,” Kirsty Nathoo, the company’s CFO  noted in a blog post explaining its new terms. 

Y Combinator also gets a right to invest 4 percent of new money in a priced round.

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The deal increase is a big change for founders as it extends a startup’s runway of capital and hopefully helps make additional small seed funding after the three-month accelerator program experience unnecessary. 

According to YC, that means founders can spend less time worrying about fundraising and more time on customers and code after they’ve left the program. The capital gives startups a funding buffer to meet milestones to raise a larger seed or Series A funding over time and therefore with less dilution. 

From YC’s perspective, it is doing what it can to shore up ownership at the earlier stages in all portfolio companies, but also in its more successful companies. 

 This new deal starts with the winter 2022 batch. 

YC goes remote

Y Combinator launched its winter 2022 batch last week, the fourth fully remote program the accelerator has run. 

The first time it went remote was for the winter 2020 batch, of which the last two weeks as well as the Demo Day went remote. 

The impact of going remote has had some benefits: The accelerator is more attractive to those farther away from Silicon Valley and also appeals to companies at different stages, according to YC. The winter 2021 batch was 50 percent international compared to 36 percent international for summer 2020, the last fully in-person batch.

After it went remote, YC partners have increased office hours to startups by 50 percent and documented advice systematically. 

Increasing the odds

YC seeks to increase the odds of success for its portfolio companies. It does that by providing a network for its founders with experience of company building at all stages and packaging up that content for founders to learn from. The team at YC now counts 80 people. 

According to Choi, the accelerator aims to address the three biggest challenges startups face. 

First, it helps them build a product and get to product market fit through its three-month accelerator program. Next, it focuses on raising funding, which coalesces around its Demo Day. And finally, it helps participating startups find the people to build their businesses. 

Livestream commerce platform Whatnot founder Grant LaFontaine has recruited engineers as well as marketing and partnership team members on the WaaS platform; the second-biggest recruitment channel after direct referrals at the company, he said. The company is fast growing: It raised its Series A, B and C funding all in 2021. Whatnot was part of the winter 2020 Y Combinator batch that went remote for the last two weeks of the program. 

Y Combinator excels at helping you build your company from “soup to nuts,” providing in the earliest days a playbook on “common characteristics and patterns for a successful company,” LaFontaine said in an interview. He also went through the YC Growth program for companies, scaling with 50 to 200 people where he got to meet CEOs, CTOs and people officers two to five years ahead who can talk to what works and what can go wrong. 

Y Combinator frequently tops our lists as the most active accelerator globally. It counts among its portfolio public companies Airbnb and DoorDash as well as still-private highly valued companies Stripe, Instacart, OpenSea, Faire, Brex and Reddit

As we’ve reported, Y Combinator had its best year yet in 2020. Since then, nine more of its portfolio companies went public in 2021, the largest number to date, according to Crunchbase data. These include Coinbase, Ginkgo Bioworks, GitLab and Amplitude

Illustration: Dom Guzman

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