No, this isn't a valid comparison. YC gives an actual answer. If you don't get in to a YC batch, you know you're not in. What's more, pretty much everyone finds out at the same time, on a well-defined schedule.
That's not at all what raising from VC firms is like. VCs rarely tell companies "no"; in fact, they say the opposite: "we'd love to fund you, let's keep moving down the path to us funding you, here are some next steps". They will do this indefinitely, and continue long after the decision not to fund you has been made.
I see fundraising as having the same dynamics as dating or job hunting.
If someone wants to date you or hire you, they will make an effort. They will respond quickly. They make genuine counter-offers ("How about Monday instead?").
If they are lukewarm, they will string you along and eventually fade. They will never make counter-offers, just reject your offers and let you make the next one ("I can't on Tuesday").
If they are not interested, they won't reply in the first place.
When someone wants you it's obvious. And when they don't, it's obvious by omission.
It's sad that it took me so much time and heartache to work this out.
Yep, this is why people who are really good at this advise a breadth-first search that very quickly narrows in on the people who show real enthusiasm. Though it can be hard to accept when you're in the thick of fundraising, anything less than obvious enthusiasm is a no 99.9% of the time.
Think about it from the other side: if you were seriously considering making a company one of the few per year that you give millions of dollars, would you ignore their emails or cancel meetings at the last minute or sound bored on the phone? Investors get just as excited about a company they like as founders do about an interested investor or potential big customer.
You realize some or many people are disgenuine - why you being sad? Isn’t it great that now you know and you can recognize this quickly and take advantage of what you know and quickly move forward?
Well, what YC actually says is "not now, but please do apply again twice a year and you might get in eventually". I don't believe there's any point where they'll say you shouldn't bother applying again later.
This is actually quite similar to your description of other VCs.
I mean, if you had to describe how a standard VC firm with the one difference is that they work in batches would reject someone, this is exactly what you'd predict - not right now, but feel free to apply again later. You can even apply in between batches although this isn't encouraged as much. They don't ever want to discourage you from giving them another shot to invest.
This is message board logic. You apply for a batch. You either get in or you don't. YC is clear about this.
Nobody is expecting VC firms to say "no, and never reach out to us with this idea again". Maybe you haven't had the experience of raising from VCs before, so I'll relate it to you: they mostly say yes, and actually put some effort into making you believe they're actively interested, right now. They aren't. It is very difficult to know where you stand with them (right now), and they are more than willing to waste your time.
First, there's an asymmetry in effort; it costs them very little to ask for things (keeping them informed on progress, having due-diligence calls with their network, &c) that can cost you a lot to provide; second, in exchange for their minimal efforts, they get optionality, which negates FOMO, which is the real reason they invest.
Maybe things have changed in the last couple years, but for first raises for companies, this wasn't like, "a thing that happens sometimes"; it is the normal, standard behavior of VC firms. People who are good at raising have strategies for dealing with it.
They have no idea whether you are something valuable or not. They are gambling, and it's their job to find undervalued companies. To them, there's zero benefit to ever closing the door. If they close the door, you won't come back, and someone else makes all the money. They will keep it open forever, in case your little company turns out to be the next Facebook or Google. They are not actively seeking to waste your time, and they are not wasting their own time. By not saying yes, and leading you on, they are telling you they don't see you as a gold mine yet.
That's not at all what raising from VC firms is like. VCs rarely tell companies "no"; in fact, they say the opposite: "we'd love to fund you, let's keep moving down the path to us funding you, here are some next steps". They will do this indefinitely, and continue long after the decision not to fund you has been made.
That's what Paul Graham is talking about.