Access vs Sourcing in VC and YC
A lot of funds say they invest in YC companies. What they usually mean is they have access to some YC deals - they can get meetings with founders after Demo Day, or maybe even they were invited to attend the event.
Access alone is not particularly differentiated anymore. Access to YC is the first hurdle.
“Sourcing” is distinct from “Access.”
Access means “I can get in.”
Sourcing means “I found it before anyone else knew it existed.”
We are fortunate at Lobster Capital to have access to YC, and we worked hard to get it. But, we are even more fortunate to be in a position now where by the time a founder is at Demo Day, we’ve known them for months, maybe a year, and have started to form a view on whether you want to back them.
This is ‘Sourcing’ as it applies to our thesis.
Is a YC Focused Fund Lazy?
In theory, the best venture investor would see the entire market and pick the best opportunities.
In practice, “picking” is overstated as a skill in venture capital.
You can only see a fraction of available deals at any time, and what you see depends entirely on how you source.
Origination is about setting productive constraints. How do you focus attention in a way that improves the quality of what you see while still preserving access to outliers? You’re trying to optimize for quality without accidentally filtering out the weird, non-consensus bets that actually return funds.
YC helps with this… Every company that makes it through has already passed a brutal filter - roughly 1% acceptance rate, evaluated by people who’ve seen tens of thousands of applications. That baseline is valuable and it would be inefficient to ignore it.
But it would be overly simplistic to call a YC-focused fund “lazy.” We’re still screening 500-600 companies per year.
The difference is those companies are pre-vetted for talent and execution speed. What we’re filtering for is different: market timing, capital efficiency, founder-market fit, the things YC doesn’t explicitly select on.
And more importantly, we’re seeing many of these companies well before they even apply to YC.
Visibility = Context
Our key strategy at Lobster Capital has been around our every growing media presence - YouTube, Substack, LinkedIn, X, all the places founders spend time.
Of course this is similar to many especially larger funds, but our focus being so strongly on YC / Accelerator ecosystem means a very specific archetype of founders reach out.
We get an early look at batch strength, we get an early look at what people are building at nascent stages, and see ranges around pre batch traction.
That inbound is powerful. Not because every inbound email is a winner - most aren’t - but because it means we’re in the conversation early. We’re in a relationship before YC ever sees the application.
We formalized this recently with YC Roaster.
Simple process: founders submit their YC application to us before the actual YC deadline. Our network of successful YC founders & alumni reviews it and provides detailed feedback. If we think they have a real shot, they get a 1-on-1 Zoom call to workshop the application further.
This serves two purposes.
For founders, it’s expert feedback that increases their odds of getting in.
For us, it’s expanding our visibility.
If we see hundreds of applications before YC does. We know who’s applying, what they’re building, how they think.
Some of them get in. Some don’t. The ones who don’t, we stay in touch with. Because here’s what most investors miss: failing YC once or twice isn’t a bad signal. Plenty of great companies got rejected multiple times before acceptance.
If you only meet them after they’re accepted, you missed all that context. You don’t know how they respond to rejection, how they iterate, whether they have the resilience to keep going when the obvious path doesn’t work. We know, because we watched it happen in real time.
The equivalent of go-to-market for venture capital is origination.
You need to identify the type of founder you want to back - stage, region, industry, attributes - and figure out where they can be found in the greatest concentration. For us, that’s founders applying to or going through YC, and the insight is that we can meet them before, during, and after that process instead of just showing up at Demo Day like everyone else.
With this many reps - we’ve seen hundreds of YC applications and tracked thousands of companies through the program - we pattern match very quickly on what the top 2% of each batch looks like. Not just “good company,” but “company that could actually move our fund if it works.”
That pattern recognition gets sharper every batch, which means we waste less time on companies that look good on paper but don’t have the characteristics we know lead to outsized outcomes.
This is what sourcing actually means in a YC-focused strategy.
Access gets you into the room. Sourcing gets you into the room first, with context no one else has, and a relationship that makes the founder actually want to work with you.
That’s the difference.
Visit lobstercap.com for more.
I would like to know your story on how you got started and got the access to YC?