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YC Stats

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Re: YC Stats

#101

Post by aj_icracked »

lawstudent2 wrote: post #97
pc wrote: post #94

Earlier quoted context omitted.

> Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits. "Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses…

No - I stand by that as a literal use. Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies? Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections? It is literally meaningless. It is not verifiable. The standards that are used to…

Who else wants PC and Lawstudent2 to continue this debate? :) I'll bring popcorn.

Re: YC Stats

#102

Post by sama »

jnevelson wrote: post #59
harmegido wrote: post #42

Ok, so I did some quick numbers on performance. It looks like the first batch was in 2005, meaning ycombinator has been at this for 10 years. Have they always funded with 120k? Assuming that (and not present valuing the older money): Total Investment: ~$131,600,000 Total Companies Value: >$65,000,000,000 YCombinator's 7% Value: $4,550,000,000 Total Return: 3357% Annualized Return: 42.5% Obviously, it costs more than…

Need to take dilution into account here. If we assume a (optimistic?) 1% stake, that's $650M. YC recently (1-2 years ago?) started giving 120k. Before that, it was 10-20k. So let's say half of what you said is the total investment = 65M. That's a 10X return. I actually was expecting higher. Am I missing something in my numbers?

This is incredibly off in many ways. Someday we will just release our numbers.

Re: YC Stats

#103

Post by sama »

roymurdock wrote: post #88
sama wrote: post #63

Also, please do not take this as encouragement to start an accelerator. Accelerators on the whole are a terrible business, and we try to be up front about that with everyone who comes to us for advice.

If the accelerator business on the whole is terrible, what sets Y Combinator apart and makes it a good company in a bad market - earning at 10% annual returns, 30% IRR as noted further up in the thread? Is it YC's human resources, position in the market, branding, some combination?

Our IRR was over 100% last time I calculated it; those numbers were really off.

Re: YC Stats

#104

Post by austenallred »

lawstudent2 wrote: post #97
pc wrote: post #94

Earlier quoted context omitted.

> Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits. "Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses…

No - I stand by that as a literal use. Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies? Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections? It is literally meaningless. It is not verifiable. The standards that are used to…

Valuation means the price that investors or acquirers were willing to pay. That someone was willing to pay that is a verifiable fact.

What the returns will be is an unknown, of course. But to say that is "meaningless" is either naive or a misuse of the word. Stock prices and market caps are decided the same way.

Re: YC Stats

#105

Post by sskates »

lawstudent2 wrote: post #97
pc wrote: post #94

Earlier quoted context omitted.

> Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits. "Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses…

No - I stand by that as a literal use. Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies? Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections? It is literally meaningless. It is not verifiable. The standards that are used to…

You can calculate the mean yourself by taking total valuation divided by number of companies. I'll do it for you:

$65 billion / (940 companies) = $69 million / company

Re: YC Stats

#106

Post by ghiculescu »

bkjelden wrote: post #65
sydneyliu wrote: post #13

Sam also just tweeted that 300 YC companies are no longer around. Amazing how much transparent they are and how great YC is at picking and training. So many really crazy ideas that most would think are insane and YC is able to find the ones that make sense and help them. Seems like that's a bit less than 1/3 of all YC companies Tweet is here: https://twitter.com/sama/status/636586179970752512

The failure rate is probably skewed low by YCs growth rate. For example, 1/9 of the companies were in their most recent batch, and it's unlikely that any of them have gone out of business yet. Still impressive though. Any success rate over say 10-20% seems really impressive for an incubator.

Yeah. A failure rate by cohort (a "churn rate" of sorts) would be handy.

Re: YC Stats

#107

Post by sskates »

sama wrote: post #102
jnevelson wrote: post #59

Earlier quoted context omitted.

Need to take dilution into account here. If we assume a (optimistic?) 1% stake, that's $650M. YC recently (1-2 years ago?) started giving 120k. Before that, it was 10-20k. So let's say half of what you said is the total investment = 65M. That's a 10X return. I actually was expecting higher. Am I missing something in my numbers?

This is incredibly off in many ways. Someday we will just release our numbers.

Sorry about all the FUD around YC's success. I'm curious where all this negative sentiment is coming from. Reminds me of this gem: https://news.ycombinator.com/item?id=35079

Re: YC Stats

#108

Post by 7Figures2Commas »

lawstudent2 wrote: post #91
sydneyliu wrote: post #13

Sam also just tweeted that 300 YC companies are no longer around. Amazing how much transparent they are and how great YC is at picking and training. So many really crazy ideas that most would think are insane and YC is able to find the ones that make sense and help them. Seems like that's a bit less than 1/3 of all YC companies Tweet is here: https://twitter.com/sama/status/636586179970752512

This is also rather misleading - because 300 have been shut down, 904 have been funded, which includes 107 in the last batch, which can be discounted entirely from these stats. This gives us 300/797 have shut down, or a percentage of about 38%. What I'd like to know is the value, at exit, of the companies that have exited or gone public. Because I can guarantee you that the "valuation" of $65B+ is a totally meaningle…

I think the point you're wanting/trying to make is that private market valuations are ridiculously high. But that's not YC's fault. It should enjoy this while it lasts, and hope that as many of its investments as possible get to liquidity before the music stops.

A more interesting observation is that two companies account for over half of the $65 billion. Airbnb's most recent valuation was reportedly $25 billion, and Dropbox's was reportedly $10 billion. These companies are not likely to go away overnight a la Homejoy, but their valuations are going to be hard to sustain. Dropbox in particular would be a very tough sell to the public markets at its private market valuation given its comp[1].

Making analysis even more difficult is that today's big money, late-stage deals have lots of strings attached, so these valuations are hard to assess without knowing all of the details.

Final comment: despite the constant suggestions to the contrary, YC's portfolio appears to live in the very same power law reality as most early-stage investment portfolios in Silicon Valley.

[1] https://www.cbinsights.com/blog/dropbox-valuation-bubble/

Re: YC Stats

#109

Post by SandersAK »

lawstudent2 wrote: post #97
pc wrote: post #94

Earlier quoted context omitted.

> Because I can guarantee you that the "valuation" of $65B+ is a totally meaningless number. This includes every single company that had a huge, unsustainable up round which will almost certainly be devalued based on future financings or exits. "Meaningless" is hyperbolic. How much would you pay for a share of Airbnb? More than nothing, I assume. I think one can conclude something from consummated, informed responses…

No - I stand by that as a literal use. Does 65B represent the actual money value that people will pay for the shares of 100% of the ~600 currently existing YC companies? Does it tell us the average value? The mean? Standard deviation? Quintile distributions? P/E? Is that number just based on valuations from funding rounds? Projections? It is literally meaningless. It is not verifiable. The standards that are used to…

Happy to buy any shares you have in any of the YC unicorns.

Re: YC Stats

#110

Post by caseyf7 »

sama wrote: post #102
jnevelson wrote: post #59

Earlier quoted context omitted.

Need to take dilution into account here. If we assume a (optimistic?) 1% stake, that's $650M. YC recently (1-2 years ago?) started giving 120k. Before that, it was 10-20k. So let's say half of what you said is the total investment = 65M. That's a 10X return. I actually was expecting higher. Am I missing something in my numbers?

This is incredibly off in many ways. Someday we will just release our numbers.

It would be great to see how many jobs YC has created too.
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