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Y Combinator narrows current cohort size by 40%, citing downturn and funding

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Re: Y Combinator narrows current cohort size by 40%, citing downturn and funding

#31

Post by cortesoft »

balaselvam wrote: post #20

The emphasis on "downturn" concerns me. Aren't reputed firms like YC supposed to look at a 10+ year horizon? If this is true, it indicates that earlier investments were based on the market than the fundamentals of the founding team, market, and product.

Even if you think things will look good in 10 years and want to build a company to succeed at that time, you still need the money NOW if you want to invest in a company now, and the availability of money for investment now is completely dependent on the current financial markets.

In other words, the amount of money available to invest is independent of the fundamentals of what that money is invested in.

Re: Y Combinator narrows current cohort size by 40%, citing downturn and funding

#33

Post by yunohn »

solarmist wrote: post #6
dqpb wrote: post #2

Doesn’t Y Combinator get 7% of every business for only $125,000? How are they not flush with cash?

It’s $500k now.

No, it’s still 125k for 7%, with an option for an additional 375k on an uncapped safe.

Source: https://www.ycombinator.com/deal/

Re: Y Combinator narrows current cohort size by 40%, citing downturn and funding

#34

Post by nostrademons »

balaselvam wrote: post #20

The emphasis on "downturn" concerns me. Aren't reputed firms like YC supposed to look at a 10+ year horizon? If this is true, it indicates that earlier investments were based on the market than the fundamentals of the founding team, market, and product.

You have the luxury of patience when it's your own money. YC has been raising outside capital for several years (a decade?) now. As soon as you're investing other people's money you're at the mercy of other people's willingness to invest.

Re: Y Combinator narrows current cohort size by 40%, citing downturn and funding

#35

Post by RC_ITR »

balaselvam wrote: post #20

The emphasis on "downturn" concerns me. Aren't reputed firms like YC supposed to look at a 10+ year horizon? If this is true, it indicates that earlier investments were based on the market than the fundamentals of the founding team, market, and product.

It’s code for “actually the program isn’t as scalable as we thought and a high % of a cohort not getting interest from traditional VCs is probably not a good look”

Remember that something like 25%+ of all YC companies ever are In the post-pandemic cohorts (due to said mega scaling).

Re: Y Combinator narrows current cohort size by 40%, citing downturn and funding

#38

Post by MattGaiser »

Any sense on whether there has been a decline in startup interest among potential founders? Startup founding seems a lot more risky if you cannot trivially go out and find a dev job if it fails.

I know a lot of people who ended their startups when the pandemic hit and ducked into government jobs to wait it out.

Re: Y Combinator narrows current cohort size by 40%, citing downturn and funding

#39

Post by DoreenMichele »

Y Combinator’s Summer 2022 cohort — currently in action — boasts nearly 250 companies, down 40% from the previous cohort, which landed at 414 companies...the batch is still large “relative to the last five years of batches.”

Next up, we shall hand wring about Bezos having fewer billions or some nonsense.

Re: Y Combinator narrows current cohort size by 40%, citing downturn and funding

#40

Post by sbierwagen »

ShivShankaran wrote: post #10
bpodgursky wrote: post #8

From what I've heard from people in recent batches, this is probably a good thing for those that make it in. Pretty little personalized attention when there are 400 startups in a batch...

It's actually a bad thing. Just like cryto all the YC companies sell to each other. As per their 2022 stats, more than 50% of sales for all YC startups are other YC companies. So this is just a game of hot potato until they get a fat valuation, raise a zillion dollar series and then list it on the stock market for the retail traders to hold their bags. Less YC startups= less customers for other YC startups.

>and then list it on the stock market for the retail traders to hold their bags.

Out of 3,840 startups funded by YC, fifteen have gone public: https://www.ycombinator.com/companies

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