Similar to the point of plagiarism in some respects (there are only three questions on their application form not copied from ours). But there are some differences:

1. They have an official connection to VCs. No one in seed funding can afford to do this, because it means you hose 90% of the companies you fund. If you don't give them their next round, no other VC will either, because you had inside info and you didn't.

2. They make no promise to keep doing this after this summer. YC and its network of other startups will be there to help you a year from now.

3. They give lower valuations: $12.5k for 5% in the average (2.5 founder) case, vs $17.5k for 6%.

4. At the end you demo to investors in the #6 startup market, whereas at YC you get to demo in both #1 and #2.

Whenever there's a blog post about Y Combinator's summer funding, I always see TechStars and Lightspeed brought up or mentioned in the comments.

Comparisons will be made, naturally. There is a lot of discussion regarding the funding vs. share percentage ratio, some lamenting that there is such a high percentage being taken for a relatively small seed. If broken into pure numbers, I can see where one might draw that conclusion. But it seems many are then missing the point.

It's not the size of the check that's written, it's the support and backing, the advice from valley veterans, the valuable critique from those who understand this arena the most. It's the crucial foot-in-the-door process and the inherent buzz publicity you just can't buy.

And since it comes down to all that, I'd rather it be with Y's folks because these are names that I actually recognize along with a proven portfolio.

With the identical application, it doesn't hurt to hedge your bets and apply to them as well as Y Combinator. They've got nothing over YC but it's certainly a viable alternative.

Can you clarify the line about inside info and how the Tech Stars program could be bad for a company's future VC funding?

If a seed firm has an official relationship with a VC, that VC will know which of their startups are best. They can't invest in all of them, since the number of startups is so much larger at the seed phase. Any they don't invest in, other VCs will know are rejects. And this is the kiss of death, because the most important thing to most VCs is other VCs' opinion.

Both Techstars and the new Lightspeed thing have this problem. At Techstars one of the founders is a VC, and Lightspeed is itself a VC firm.

It's bad if you come out of the Techstars program without any funding and a non-sustainable company, but then you're probably screwed anyways. VCs are infamously inscrutable; we hear that they are always out to take advantage of naive or underfunded companies.

If you're good enough to get further investment after Techstars, you get it from a VC that you already know instead of having to deal with the typical painful negotiations. And if Brad Feld's Foundry Group will give you money, maybe you could get Bay Area VC money. Even better, the best companies will get to reinvest their own profits.

With their hard ties to VCs, if TechStars do not continue with you in their next round, you are auto-stigmatized. TechStars has then effectively marked you as undesirable in a sense and others might not give you a fair look.

Hypothetical situation but what would happen if a startup participated in TechStars or another program and then afterwards applied to YC? Would previous experience increase chances of application success or would they be passed over because it would seem they've already been given a chance?

We'd consider them. We have sometimes accepted companies that have already had a little funding. We prefer companies that aren't incorporated yet, though, because the paperwork is so much simpler.