I recently paid a visit to the Y Combinator offices with some fellow Google Experts. Michael Seibel talked about the YC philosophy, and he answered questions from the group. His thoughts on international startups were particularly interesting. The general idea was that international startups can and should focus on their markets, which may be plenty big enough, but that they should probably beware of local investors (with the exception of China). Valley investors will probably give better terms and valuations (again, with the exception of China) than local investors. He also thought that for many international companies, spending 3 months in Silicon Valley to go through the Y Combinator program was probably worthwhile.