Obligatory:
Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
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Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#32It's pretty incredible to think that YC is likely the highest performing venture fund in history. For 380 companies that works out to about $7.6 million invested into a portfolio of companies worth $7.78 billion. Assuming a 2-7% stake for YC(after dilution), that puts the value of YC's share at $155-$545 million on that $7 million invested.
~20x isn't close in the pantheon of record venture deals, especially when normalized to an IRR (annual return). Benchmark Capital is often cited since their $6M investment was worth 500M+ at IPO less than a year later and then eventually ballooned to being worth $5B as shit got crazy. the 12.7M Accel invested into Facebook in the A was worth ~$10B at IPO. I think even that is less on IRR than the ebay deal
You can't compare the entire fund to returns on a single deal. The investment in dropbox, conservatively assuming a 20k investment with dilution to 1% and sticking to the $4B valuation, is already a 2000x return. The actual return will probably be much higher, as DropBox's value will continue increasing.
Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#33It's pretty incredible to think that YC is likely the highest performing venture fund in history. For 380 companies that works out to about $7.6 million invested into a portfolio of companies worth $7.78 billion. Assuming a 2-7% stake for YC(after dilution), that puts the value of YC's share at $155-$545 million on that $7 million invested.
~20x isn't close in the pantheon of record venture deals, especially when normalized to an IRR (annual return). Benchmark Capital is often cited since their $6M investment was worth 500M+ at IPO less than a year later and then eventually ballooned to being worth $5B as shit got crazy. the 12.7M Accel invested into Facebook in the A was worth ~$10B at IPO. I think even that is less on IRR than the ebay deal
Right, but those are single deals. You could show similarly silly numbers for YC/Heroku, etc... How did Benchmark and Accel do in aggregate is the question? I don't think that data is public, is it?
Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#34How very Silicon Valley of the author to treat these numbers almost like they're profits, or any reasonable sort of "income" at all. The real question is: how much of that money has already been multiplied tenfold, through exits, IPOs or exorbitant profits?
Why are HNers so dense when it comes to fundraising? No, the treatment doesn't come off at all sounding like profits or income. Yes, fundraising is definitely a point of success. Why do HNers have such a hard time with this? Money is an important resource for growing companies! Sheesh.
Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#35It's pretty incredible to think that YC is likely the highest performing venture fund in history. For 380 companies that works out to about $7.6 million invested into a portfolio of companies worth $7.78 billion. Assuming a 2-7% stake for YC(after dilution), that puts the value of YC's share at $155-$545 million on that $7 million invested.
~20x isn't close in the pantheon of record venture deals, especially when normalized to an IRR (annual return). Benchmark Capital is often cited since their $6M investment was worth 500M+ at IPO less than a year later and then eventually ballooned to being worth $5B as shit got crazy. the 12.7M Accel invested into Facebook in the A was worth ~$10B at IPO. I think even that is less on IRR than the ebay deal
Jeez, nik, the person wrote "venture _fund_" and you're comparing to individual deals?
Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#36How very Silicon Valley of the author to treat these numbers almost like they're profits, or any reasonable sort of "income" at all. The real question is: how much of that money has already been multiplied tenfold, through exits, IPOs or exorbitant profits?
Raising money isn't any indication for any success but is a nice accomplishment - money coupled with the mentoring and connection from ycombinator could significantly improve the companies odds to succeed. These numbers are vanity metrics but are still indicating a trend - companies going through ycombinator are more likely to raise money than others. I know I would go thru ycombinator - not because of the money I co…
PG originally made the comment in this thread http://news.ycombinator.com/item?id=4291075 on Seed-DB.
I launched Seed-DB earlier today (http://www.seed-db.com) where you can find these data points for all companies that have been through seed accelerators.
Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#37I do wonder how many (if any) successful YC companies have bootstrapped (except for the YC funding).
Depends on what you mean by successful. :)
I can't think of any YC-funded companies that have slowly grown organically into modestly successful long-term businesses. Paul Graham made a comment somewhere that YC actually has no problem if the founders want to build a "lifestyle" business, and won't push for VC-backed moonshots if it's not in the founders' interests, but I just haven't heard of that outcome happening. It's possible I just don't know about them, though.
There have been several that sold for reasonably good totals without raising any funding, if that counts. For example, Clickpass sold for $1m, and raised no funding except YC's $20k.
Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#38Earlier quoted context omitted.
~20x isn't close in the pantheon of record venture deals, especially when normalized to an IRR (annual return). Benchmark Capital is often cited since their $6M investment was worth 500M+ at IPO less than a year later and then eventually ballooned to being worth $5B as shit got crazy. the 12.7M Accel invested into Facebook in the A was worth ~$10B at IPO. I think even that is less on IRR than the ebay deal
Right, but those are single deals. You could show similarly silly numbers for YC/Heroku, etc... How did Benchmark and Accel do in aggregate is the question? I don't think that data is public, is it?
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Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#39How very Silicon Valley of the author to treat these numbers almost like they're profits, or any reasonable sort of "income" at all. The real question is: how much of that money has already been multiplied tenfold, through exits, IPOs or exorbitant profits?
What on earth did the author say that conflated fundraising with revenues? All he did was compute an average and list some individual amounts raised.
Also, a 10x return is the sort of target a VC will have for a series A round. Investors in later stage rounds have lower expectations. And since later stage rounds are much bigger, that means most of the money invested in a successful startup is done with the expectations of way less than 10x returns.
From what I know, I would guess that the investor of the median dollar of that billion is happy with the way things are going so far.
Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion
#40What's interesting is that if 2-3 years ago, ycombinator had the ability to identify and pick winners. I have the impression that in the past year it became the other way around. Y combinator by picking companies are in fact the kingmakers and are creating the winners.
I wish. That would be very convenient. But in startups everything depends on the founders. All we can hope to do is smooth the way for them.