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Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

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Re: Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

#11

Post by throwaway1979 »

orenbarzilai wrote: post #9
arbuge wrote: post #8

Earlier quoted context omitted.

The number quoted is anything but meaningless - it's the best estimate out there of the value of these companies right now. Sequoia has been at work for alot more time than YC, and put alot more money to work than YC in that time. YC has a stake of at least several percent of that $13.7B figure, translating into about a billion of its own now by my reckoning. Doing pretty well I'd say. With incubators, as with musici…

As some body here already mentioned, the "unsuccessful" founders can always go back to work at Microsoft/fb/google etc, unlike the unsuccessful musicians... But I agree with the analogy.

I'm curious if people have first hand experience going back. In some occupations, professor jobs and researchers at labs, going back isn't trivial.

Re: Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

#12

Post by confluence »

The real question is how much of that is actually real?

Any VC can buy 10% of a company for $10 million. Doesn't mean that it's worth $100 million.

Valuations are usually complete bullshit. I wouldn't rely on their proxy. They're just another example of the anchoring bias.

Re: Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

#13

Post by will_brown »

These statistics are very meaningful because of YC's transparency. The math is simple: YC has invested in 511 companies, this calculation uses an investment of $18,000 (the max YC investment) per company, equaling $9,198,000 total YC investment. YC investment results in an average of 6% ownership, 6% of $13.7B is $822,000,000. That ROI is phenomenal.

I personally believe YC is in a more enviable than Sequoia. Further, YC or at least the partners are in a position to participate in future rounds of funding for the YC companies, of course they will likely be paying a lot more for a lot less at that point...just like Sequoia.

Re: Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

#14

Post by terryjsmith »

confluence wrote: post #12

The real question is how much of that is actually real? Any VC can buy 10% of a company for $10 million. Doesn't mean that it's worth $100 million. Valuations are usually complete bullshit. I wouldn't rely on their proxy. They're just another example of the anchoring bias.

I would argue that they're definitely made up, but not completely bullshit. It's a yardstick for a sale price: if the investors need to get out at least X, then that's a good starting place to start shopping the company around. If the entrepreneur is forward thinking it also means they know they need to find a way to get annual revenues up to $Y to justify the investment and give back any semblance of a return. So not a great judge of a company's "worth", but outside of revenue, probably the best thing we have.

Re: Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

#17

Post by the_watcher »

confluence wrote: post #12

The real question is how much of that is actually real? Any VC can buy 10% of a company for $10 million. Doesn't mean that it's worth $100 million. Valuations are usually complete bullshit. I wouldn't rely on their proxy. They're just another example of the anchoring bias.

Doesn't PG use a pretty conservative mechanism for valuing companies? If I remember correctly, he has said that there a significant number of YC companies that he simply doesn't include in the value since there is no reliable mechanism for valuing them.

Relevant quote: "either because they died, got acquired, or sold stock at a specific valuation."

Re: Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

#19

Post by [deleted] »

reitzensteinm wrote: post #7
codex wrote: post #3

And Sequoia backed startups now have a combined valuation of almost a trillion. These statistics are a bit meaningless. I'll wager that the median YC company has a negative opportunity cost for the founders.

You complain about meaningless statistics and in the next breath introduce one of your own. The median outcome of asking someone out, applying for a job, learning an instrument, starting a side project, writing a novel, picking up a sport, learning a language and any other of the thousands of things that make life interesting are all negative. You fail, yielding zero value, and you could have done something safer wit…

[deleted]

Re: Y Combinator Startups Now Have A Combined Valuation Of $13.7 Billion

#20

Post by dopamean »

will_brown wrote: post #13

These statistics are very meaningful because of YC's transparency. The math is simple: YC has invested in 511 companies, this calculation uses an investment of $18,000 (the max YC investment) per company, equaling $9,198,000 total YC investment. YC investment results in an average of 6% ownership, 6% of $13.7B is $822,000,000. That ROI is phenomenal. I personally believe YC is in a more enviable than Sequoia. Further…

As I am writing this your comment is the top comment. The comment below it reads:

> And Sequoia backed startups now have a combined valuation of almost a trillion. These statistics are a bit meaningless. I'll wager that the median YC company has a negative opportunity cost for the founders.

When reading your comment first I agreed and thought, Wow! YC is killing it. Then I read the next comment and thought, Hmm, perhaps not? Now I don't know what to believe.

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