Y Combinator does seed funding. It invest in startups right at the beginning. For the record, it has funded different Internet known-services such as Scribd, Reddit, Disqus, Dropbox, Posterous, Airbnb and around 380 other startups. What makes it interesting is its funding model.
From what I know, other companies will give you the funds against a percentage of your company. You’ll be able to ask for advice on how to conduct your business and you’ll also benefit from their network. You’ll meet other entrepreneurs and experienced businessmen providing you with useful information and possible opportunities.
Now with YC, you’ll move to Silicon Valley for a 3-month program to get you started (name, long-term plan, etc.). YC will teach you how to deal with investors and how to close a deal. Finally, you’ll meet and learn from famous entrepreneurs and be presented to investors for a bigger fundraising round.
Of course, if you are looking for funds or advice it means that you have an idea. However, this may not be necessary anymore:
Y Combinator is trying an experiment this funding cycle. We're going to have a separate application track for groups that don't have an idea yet. So if the only thing holding you back from starting a startup is not having an idea for one, now nothing is holding you back. If you apply for this batch and you seem like you'd make good founders, we'll accept you with no idea and then help you come up with one. (We'll consider single founders too, but we prefer groups.)
The question is: how viable startups coming out of the program are going to be? Are the founders going to be dedicated and committed enough?
I guess, it is worth trying. If successes emerge from the program, YC’s will have proven its expertise at getting funders started.
To apply with no idea, just go to http://news.ycombinator.com/apply-noidea and you'll find an abbreviated application form.