Apply, you lose nothing. And apply again once you get more progress.
There is no ideal stage, but they'll fund the most promissing of them. The more your startup grows and the more times you apply (= persistance and staying alive), the more interesting your startups gets, hence better the odds.
At Quero we applied 3 times before being invited for an inverview and approved.
I know it's a sensitive topic, but it would be so interesting if he could talk candidly about the co-founder relationship issues at Paypal, with PT and Max. His bio is very vague about it. Also, what he thinks a team with him, Peter and Max could have achieved together at Paypal had they worked together for 10 years on creating the bank of the modern era, instead of spliting up and exiting in a couple of years.
Paul Graham (and Trevor and Robert) founded a company, Viaweb, that was sold to Yahoo for close to $50M in 1998. Like Jessica said, they invested $12k per company in the first batches of YC.
What Jessica has done in YC is an amazing example of how to build great culture in a Startup (and YC was and still is, in several ways, a startup!).
It's a challenge, but I believe YC can be an organization that can outlive its founders by the force of its strong, enduring culture. As a YC founder I didn't have the pleasure to meet Jessica (or Paul) yet (they are in a Sabbatical in London). But just spending those 3 months in YC and all the amazing people they put there made me feel as if I had.
If you want to be a teacher or hold a research or Engineering position at a more research driven corporation, and get a confortable life and safe career, get a PhD.
If you want to work your ass off for +10 years at least, life a insecure and stressed out life, have 0,1% chance of being insanely sucessful, rich and change the world, do a Startup.
Doing a startup trying to achieve only "career recognition" or improve your resume so you can land a job at Google or Microsoft is a total waste of time. You'll likely fail, lose your money (and your investors', if you get any) and achive nothing. Being a sucesfull entrepreneur would definitely make your resume better, but that's not the end goal.
When you see startups being acquired by Google you shouldn't think the founders reached their goal. Quite the opposite. It's usually a mild failure (an "acquihire" or "softlanding"), they couldn't scale their company or raise more money and selling to Google was the best thing they could do (besides shuting down the business). Or it was a mild success, the entrepreneurs sold to Google because they would get some sizeable amount of money fast enough, rather than taking the risk to see if the company would become much larger down the road, to sell or IPO at a much higher valuation 5 or 10 years later, for instance.
In either cases the founders won't usually be happy to have become employees once more, and will leave the acquirer as soon as they can and do something else. They can't leave right after the acquisition because he will be vested or will have golden handcuffs (ie.: won't get all his money if he leaves before 2 or 3 years).
Ps.: I have a startup (for 6 years now) and before that I was studying to get a Master's Degree. However, my A plan was always to start a company even once I started the program. So once I got some money to start, I dropped out. I was already quite tired of the academic life and don't regret it. Don't regret the time I've spent doing the master's also, as it was a way to keep myself ocuppied and get some ramen money, while having a lot of free time to work on my product and think.
Thank you for the response. Quite informative. Special thanks for the PS, I am actually pursuing a Master's degree and, like you, I am planning to start my own company or work for a startup that I think is solving an important problem. I also started to get tired of the academic life.
For me, being successful as a startup founder, is to bootstrap (I don't want to loose the freedom of making my own decisions) a business that is solving a "real" problem for enough users to have reasonable income. I am not planning to scale just for the sake of scaling or to raise fund for expanding. I am making the conscious decision to have a sustainable business with no exit strategy.
