Y Combinator and Facebook Launch Social Startup Investment Partnership

While Facebook hasn't done much with its fbFund this year, the company is still busy working to directly nurture its developer ecosystem -- today, it is announcing a partnership with early stage venture firm Y Combinator to support social startups. Here's how Facebook says it will be involved: We’ll provide product, technical and design resources to support new Y Combinator companies interested in working with us to build deeply social products, whether a website or an application on Facebook.com. These companies will have priority access to our technologies and programs such as Facebook Credits, Instant Personalization and upcoming beta features. Y Combinator will be publishing a “Request for Startup” focused on social startups and is now looking for interested entrepreneurs for their winter 2011 funding cycle. Y Combinator, a genre-defining modern incarnation of the startup incubator concept, has put small amounts of money into hundreds of startups in recent years, including some that Facebook has purchased, like Parakey and Divvyshot. It is arguably the best-networked early-stage web investor in Silicon Valley and the tech world today. The firm runs a competitive application process where it looks for small teams with great ideas and technical talent. Then it provides a small investment, typically around $20,000 or less, in exchange for 2% to 10% equity, along with basic legal support. It hosts a season-long course at its Silicon Valley headquarters for these companies, bringing in high-profile entrepreneur and investor speakers to help guide each class in building their products and businesses. At the end of each cycle, it has the classes present to top angel and venture investors, and press -- its most recent class just presented this week, see here for more details. Overall, it has already helped dozens of companies launch, get traction, raise funding, and sell. Given Y Combinator's expertise in nurturing young companies, the partnership should help Facebook get more promising entrepreneurs focused on its ecosystem, especially growing initiatives like Credits. In exchange, Facebook's backing should help Y Combinator define itself as the best way for any startup to make it big with a social product.

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Y Combinator and Facebook Launch Social Startup Investment Partnership

Eric Eldon

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