Meet the Next Billionaires

Looming over Zenter's efforts was the knowledge that Google was working on its own online-presentation app. The word, though, was that the Zenters' program was better, and one day Google invited them over. The search giant made an offer that Crosby and Walker considered too low, but didn't shut the door to further negotiations.

The Weeblies were also working with maniacal intensity. A Penn State alum who was a Y Combinator veteran set them up with an apartment in a North Beach high-rise that is so much a favorite of YC companies that its informal name is the "Yscraper." Paying $2,700 a month in rent for a two-bedroom unit with a spectacular bay view, the Weeblies pushed three desks together to make the dining area into office space.

On Demo Day, each start-up gives a 10-minute demo to a room packed with the top investors in the Valley. The Zenters lead off, using their own software to build the presentation for their demo online in real time; as they give it the Weeblies follow, and nail the crowd with the simplicity of their Web-site creation service. One of the biggest hits was a sleeper—Octopart, an e-commerce site created by two physics grad-school dropouts; it slickly aggregates the inventories of electronic-parts sellers (normally they are buried in phone-book-size catalogs) and makes them easy to buy. Some of the demos aren't as sharp, but none fall flat. "Angels and VCs who don't go to this are missing some of the best innovations," says Ron Conway, the Valley's most celebrated angel investor.

After Demo Day, there's only three weeks left, and the focus shifts from building products to getting funding to keep them going after the YC program ends in April. The Weeblies had buyout interest from a company in Maryland, Freewebs. Rusenko and Veltri took a red-eye to meet the Freewebs executives and, they say, received an offer in the low millions, two thirds of it in stock. They said no. Instead, they'd pursue the angel-funding offer sheet that was at their lawyers' office: Wilson Sonsini, the top firm in the Valley.

Pretty heady stuff for kids who were sitting out in the rain at football games only four months before. "It's almost as if I can't explain it to the people back home," says Chris Fanini. His partner Dave Rusenko agrees: "First you feel real green, then little by little the lifestyle becomes normal." Dan Veltri nods. "Yeah—then it's normal to turn down an offer in the millions."

The last Y Combinator dinner in the session, on March 27, was almost nostalgia-free—though things were over, they really weren't. Most of the companies planned to stay in the Valley. Y Combinator's Jessica Livingston now reports that all the companies in the group are still going strong—most have funding lined up and the others have good prospects for money to keep them going until they build an audience. One has even tentatively agreed to a multimillion-dollar buyout from a major tech company. (Since no deal is a deal until the final papers are lawyered and inked, secrecy is paramount.) "We're going to have to print more black shirts," Livingston says.