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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

#41

Post by pg »

il wrote: post #9

It'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.

There are a couple of catches though. One is that we can't invest more at such rates of return. A VC fund may get a lower return per dollar, but they can invest a hundred times as many dollars at that rate. The other catch is that the $7 million doesn't include our operating expenses or the value of our time.

Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion

#43

Post by brazzy »

pbreit wrote: post #34
skrebbel wrote: post #5

How 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.

If anyone is dense, it's you. It is certainly odd that the number of HN postings that follow the pattern "Company X raised $Y" far exceeds that of postings about revenue or profits, which are undeniably more important metrics for success. To some degree that can be explained by the fact that many incubated startups are legitimately in a phase where raising capital is important and revenue/profits not yet achievable. But why do we hear so little about later phases? IMO it's just as much a symptom of the dysfunctional aspects of the current startup scene that aims primarily towards acquisitions, where revenue, let alone profits, are ctively avoided because they're seen as an impediment to ridiculous acquisition valuations.

Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion

#44

Post by robryan »

pbreit wrote: post #34
skrebbel wrote: post #5

How 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.

One way to look at it is success, another way to look at it is redefining the value the company will need to create to be considered a success.

Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion

#46

Post by robryan »

pg wrote: post #41
il wrote: post #9

It'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.

There are a couple of catches though. One is that we can't invest more at such rates of return. A VC fund may get a lower return per dollar, but they can invest a hundred times as many dollars at that rate. The other catch is that the $7 million doesn't include our operating expenses or the value of our time.

You could take a larger initial stake. I assume that the value placed on the YC program, including the cash, mentors, exposure, network etc has probably risen over time.

Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion

#48

Post by pg »

pbreit wrote: post #34
skrebbel wrote: post #5

How 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.

I think they're not so much dense as bitter. There's a subset of HN readers who regard startups as a whole as a sort of con game, and are angry that the participants get so much attention. There may not be that many of them, but their anger makes them disproportionately active as commenters and voters.

Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion

#49

Post by thaumaturgy »

pg wrote: post #48
pbreit wrote: post #34

Earlier quoted context omitted.

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.

I think they're not so much dense as bitter. There's a subset of HN readers who regard startups as a whole as a sort of con game, and are angry that the participants get so much attention. There may not be that many of them, but their anger makes them disproportionately active as commenters and voters.

I probably belong to that subset. "Bitter" is an uncomfortable term, but probably accurate. Personally, it's not that I think startups are a con game (and certainly not YC); it's that YC represents a tremendous amount of support and resources and influence that aren't available to people like me who are working just as hard, and are just as skilled, but aren't a good fit for YC.

It's tough in practice to not get a little envious of that support when you don't have it.

I still think it's good manners to keep my jealousy to myself though. This is a YCombinator forum after all; bringing bile here just because we're not alums is not cool.

Re: Paul Graham: Y Combinator Companies Have Raised Over $1 Billion

#50

Post by larrys »

pg wrote: post #48
pbreit wrote: post #34

Earlier quoted context omitted.

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.

I think they're not so much dense as bitter. There's a subset of HN readers who regard startups as a whole as a sort of con game, and are angry that the participants get so much attention. There may not be that many of them, but their anger makes them disproportionately active as commenters and voters.

You went to Harvard.

While it would be nice to think that the people accepted at Harvard are the most and only qualified people to go to Harvard we all know that is not the case.

Harvard can only accept so many people and many people who could do well there, and aren't accepted, will fail to get in because the decision process isn't perfect in who gets accepted and who doesn't (and I am not even speaking of people who get in for reasons such as family or some other advantage). There are only so many slots.

Substitute Harvard for anything where the amount of qualified people greatly exceed the number of slots available and the decision process isn't a lottery and the decision is made by humans.

So it would be natural for people to be jealous and maybe bitter if they see someone of equal ability to themselves get into Harvard. Especially if it was in their face everyday. (But it's not, at least with Harvard, the jealous person is probably on another campus. With YC, if you are a HN reader and enjoy it it is in your face every day.)

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