
YC Stats - macleanjr
http://blog.ycombinator.com/yc-stats
======
sydneyliu
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](https://twitter.com/sama/status/636586179970752512)

~~~
lawstudent2
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 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.

~~~
pc
> _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 to this question.

~~~
lawstudent2
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 calculate it are not explained. There is no explanation to how it relates
to the companies in the portfolio.

I'm a bear by nature. I think that the current batch of SaaS unicorns have an
unsustainable valuation, and I think this unverified number feeds into that.

~~~
austenallred
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.

~~~
gress
Public stock prices are decided by supply-demand balance. In no way does this
valuation resemble that mechanism.

~~~
austenallred
Public stock prices are the last price someone was willing to buy that stock
at.

Private stock prices are the last price someone was willing to buy that stock
at.

It is slightly less simple, because you may give a discount for advice, but
private stock prices are definitely reliant upon supply and demand. If one
investor wants to set your valuation at $1B and another at $100m, you go with
the one who offered a $1B valuation. There is occasionally a discount for
advice/connections, but the mechanism that the highest bidder wins is
generally the same. Private market stocks are by no means exempt from
economics or supply and demand.

~~~
gress
I don't know if you are making a disingenuous argument or you just don't know
about liquidity, or indeed the effects of sample size on estimating a changing
value, but what you've said here has no relationship with reality.

~~~
austenallred
How does it not?

------
netcan
Stark reminder of how top heavy returns are. A lot of the talk and criticism
about the startup world: valuation, investment, focusing on numbers other than
revenue and such is ultimately explainable by going back to this.

For a bit more, dropbox & AirBnb are worth 10 & 25 billion. That's over half
the total $65bn from 2/940 companies, 0.21%. Even if we assume these stats
grossly underestimate ultimate valuations because of most of the companies are
still young, it's still likely to end at >50% of value from <1% individuals.
This is for companies that get into YC, which is already a select group.

~~~
JonFish85
Remember: until there's an "event", there are no "returns". Until a buyout or
an acquisition happens, there's no money made except on paper.

~~~
beambot
And after a liquidity event, the money is really just a bunch of electrons in
a computer or magnetic domains on a disk somewhere...

~~~
davnicwil
Not sure why this is downvoted, it's a very interesting point.

Equity in a privately-held company has value in precisely the same abstract
sense that money has value. Both are tokens of, and therefore exchangeable
for, real work. Why else do people take equity as part of compensation?

I think what beambot is getting at here is the value of 'what you own' doesn't
become any more or less real after you trade equity for money in a liquidity
event. It's fundamentally just as abstract as it ever was, or will be.

~~~
beambot
Spot on. The only differences are risk, liquidity, and fungibility. But the
"money" aspect is fairly abstract up until you're actually trying to
spend/exchange it.

------
sama
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.

~~~
roymurdock
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?

~~~
myblake
It's got to be the position in the market at this point (though probably
started out as human capital to get to that point). They're seeing most of the
good deals for early stage companies because they're so far ahead anyone else
in the space, which is obviously in your best interest in something where the
best deals are several orders of magnitude better than a merely good deal and
the average case is failure.

------
downandout
_> This includes Twitch, which Amazon bought for ~970MM plus an earn-out._

These kinds of companies with massive bandwidth costs rarely become
profitable, and even if Twitch bucks the trend, Amazon could easily use
Hollywood accounting to avoid any payments on the earn-out (for example, it
could charge Twitch retail rates for use of AWS services). It strikes me as a
bad decision to accept an earn-out when the overwhelming likelihood is that
the clause will result in exactly $0 going to the former owners.

Re: stats, 40 out of 940 are worth more than $100M. Dozens more are probably
worth at least $25M. That is an insanely high success rate. The YC system
works!

~~~
patio11
That particular example aside, useful information for many HNers: Earn outs in
tech are routinely earned out. They're negotiated with the assistance of very
smart, very highly paid specialists, too.

A fairly common outcome (anecdata from friends) is that the earnout is
virtually in the bag at the 50% point and after that they are mildly
frustrated with thumb-twiddling while waiting for the clock.

~~~
loumf
From my anecdata, the acquiring company is using the earn-out as more of a
test that what you are saying at acquisition time is true. It augments due-
diligence.

Meaning, if you are right about the business, these milestones are trivial to
hit. If you don't accept the earn-out, it's a signal that something you are
saying is either wrong or being misinterpreted.

------
minimaxir
Interesting way to bury the lede that 32 companies received a Fellowship
offer. The estimate was 20. ([http://techcrunch.com/2015/07/20/y-combinator-
just-introduce...](http://techcrunch.com/2015/07/20/y-combinator-just-
introduced-a-new-program-to-reach-up-to-1000-companies-per-year/))

~~~
sama
Honestly if we were prepared to take 320 that would have been good. The
quality was outstanding.

~~~
snake117
I really underestimated the amount of applications that you guys received. I
was thinking maybe a few hundred, like 800 or 900, at the most, but 6500? I
was way off.

I was wondering though, if the Fellowship program showed great results and you
guys decide to continue it, how much equity would you ask for? Have you
thought that far ahead yet?

~~~
dkyc
I have no inside info, but I think YC Fellowship could be a startup lead
generation system: when you get a Fellowship grant and your company begins to
work out, you will probably apply to YC and get accepted. Then YC receives
equity (and only the equity of the huge winners matter financially).

------
harmegido
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 the initial investment, but these are really
nice numbers if compared to a mutual fund, etc. Did I make any mistaken
assumptions?

~~~
jnevelson
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?

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

~~~
sskates
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](https://news.ycombinator.com/item?id=35079)

~~~
boomzilla
Because we expect more from YC. No one doubts that YC has been a hugely
positive impact in the startup world. It seems below YC's standard to share
selective metrics that might not tell the whole story.

------
eloff
I think there's a big elephant in the room here. Companies usually take time
to fail, especially with VC funding. The companies from the newer batches are
going to be skewing those fail statistics. If you only look at companies from
4 years ago and older, you might get a more realistic impression.

It still won't be 90% though, but YC companies are widely known to not be
representative. It's the highest profile accelerator, so it attracts the best
talent. Just like people who graduate from Ivy League schools earn more on
average, but mostly that's because they attract people who are above average
to begin with.

~~~
bobbles
But if they choose to provide stats each year thatll work out over time right?
I mean you have to start somewhere

------
kumarm
(Since no one is pointing out Elephant in the room, I will do that).

YC has been around for 10 years. Average age of a company from First
Investment to IPO in 2014 is less than 10 years ([http://lifescivc.com/wp-
content/uploads/2015/02/Time-From-VC...](http://lifescivc.com/wp-
content/uploads/2015/02/Time-From-VC-Investment-to-IPO_Feb2015.jpg) Source 1.)

Personally, I believe startups excel when odds were stacks against us (forced
to innovate and make founders strong and tested). I think YC or any incubator
has a structure that shields companies from facing challenges initially.

I don't think Incubators are proven to be a great Idea yet ( if you are
someone with industry experience rather than a fresh graduate).

1\.
[http://www.forbes.com/sites/brucebooth/2015/02/24/tortoise-h...](http://www.forbes.com/sites/brucebooth/2015/02/24/tortoise-
hare-revisited-time-to-ipo-for-vc-backed-startups/)

~~~
jkarneges
VCs don't invest at the idea stage, so most initial funding comes from angels
or accelerators (or bootstrapped because founders are already rich, but that
doesn't count). Since having industry experience does not necessarily equate
to having a vast angel network, accelerators fill in the gap.

------
cm2012
Considering there is probably a vintage effect, and currently 5% of YC
companies are worth over $100 million, that means that most likely 5-10% of
founders that join YC will become millionaires over time. That's pretty
impressive.

~~~
cbr
That's not a super high bar. Most of these founders could get $200k jobs at
top tech companies, invest $100k/year, and be a millionaire in ~10 years. Much
better than 10% odds!

~~~
eachro
Investing 100k/year seems a bit much. With ~40% tax, the take home is closer
to 120k. Add in Bay Area rent, leisure, random fixed costs(car insurance,
significant others expenses, pets, etc) and its probably closer to 80k at
best.

Though, I do wonder, how feasible would it be to end up with a 2+mill nest
egg(or however much you need to live off the gains) by ~35 and retire right
then and there.

------
lordnacho
Since applications are opening tomorrow, it would be interesting to have a
breakdown of interviews/acceptances based on various criteria: sole founder,
has revenue, has user, etc...

It would allow prospective applicants to think about whether to apply, and
hopefully keep the pile a manageable size for the people reading it.

~~~
kevin
Might be interesting, but the odds are the wrong way to think about this. Our
wins come from the margins and we're looking for people to beat the odds. Most
of the time we are surprised what ends up becoming big.

The numbers reveal that it's hard, but startups were ALWAYS hard. It's still
the hardest thing I've ever done and most founders say the same. As far as YC
is concerned, we don't want people to try to make this easier for us. One of
the unique properties of YC is that we're trying to fund startups at scale and
that means we don't want founders thinking about trying to make it manageable
for us by bowing out. That's how I miss out on someone on the margins. It's
one of the reasons why I love working on the YC software team to try and solve
these challenges. So please, don't take away my work. :)

My favorite founders are filled with grit and perseverance. They don't
calculate whether they can change the world before starting, they just start.
So if you're ready to do something hard and feel like it's within you to
change the world, please do apply...the numbers be damned.

~~~
lordnacho
Cool. You may have bought yourself 3 more applications then. I know a couple
of other groups (aside from mine) who would benefit from this programme.

------
npalli
Interesting twitter update by sama

> Oh, another important stat: about 300 of the companies we have funded have
> shut down.

This is a hard gig. Even after you get into the top accelerator in silicon
valley.

~~~
jacquesm
Top accelerator in the world. Even so I find sama's comment further up about
not encouraging people to start an accelerator quite funny.

------
dude_abides
_Number of companies funded by YC that have shut down: ~300_

Does this include aqui-hires?

Also, would you know how many companies rejected by YC are worth more than $1
billion? Zero or non-zero? :)

~~~
smt88
Why would it include acqui-hires? Companies rarely broadcast the fact that
they're acqui-hiring, so it's not always a black-and-white issue.

Also, saying a company was acqui-hired makes a VC look less successful, so
they have an incentive not to be honest about it.

------
jypepin
how good or bad are those numbers? only 8/970 companies are worth > 1b and 40
are worth over 100M.

I assume YC is doing great for themselves, so I'm wondering, what is the rule
of thumb to say an investment was successful? (for YC, knowing they invest
cheap and early.)

Is it once a company reaches 10M? 1M? Where there is an exit?

It would be interesting to know how many companies YC says the investment was
a success (either made money or will if no exit yet).

~~~
jazzyk
>8/970 companies are worth > 1b and 40 are worth over 100M.

Sorry to be negative, but worth according to whom?

If none of these companies are public, the valuation comes from a very narrow
group of private investors. In what seems to be a bubble (and an echo chamber)
in S.V., these valuations may be vastly overstated.

That said, kudos to YC for being transparent.

~~~
jazzyk
To all the down-voters:

Do you not think that solid data such as revenue, revenue growth and
profit/loss (or at least burn rate) would be a much better measure of success?
Some non-public companies (like Uber) publish some of these numbers.

------
bsbechtel
I would be very interested in seeing a cohort analysis of YC company
valuations by batch :-)

------
julien_c

      Number of companies we offered to fund yesterday for the first YC Fellowship: 32
    

That's a figure I was looking for (took the interview yesterday, didn't get
in).

~~~
ryanSrich
Can you write a blog post on your experience? I'd be interested to see how
closely it resembles YC.

------
dzlobin
Nice to see more detailed stats on this stuff. One figure I'd really like to
see is the number of companies worth more than $10M & $50M.

------
pesenti
It would be great to get stats about exits as well. How many exits? Total
valuation at exit? Median/average age at exit? etc.

------
BinaryIdiot
Thanks for publishing these! They're pretty interesting and they certainly
paint YCombinator in a really positive light. It would be pretty awesome to
see a roll up regarding the failed companies and aggregated reasons why they
failed.

At a certain point you can only learn so much from other's failures but it
would be interesting non-the-less.

------
sheel
It takes a long time to build a Unicorn...

airbnb dropbox stripe twitch weebly machinezone were all funded >5 years
ago... Unicorns in the past 5 years are Instacart and Zenefits (there will
surely be others). In general it is hard to measure performance of the entire
portfolio, much easier to measure performance of a class.

------
brayton
What does it mean by saying "got their start with us"? I believe many
companies have been around for awhile before YC. Many already with revenue,
traction and funds raised (although this might be the exception to the rule?).

~~~
sama
The great majority of companies we fund, even in recent batches, have
effectively zero revenue when we fund them. But certainly more have a product
and users than they used to, which is why we're doing the fellowship.

~~~
brayton
YCF is an awesome move guys. Stays true to the funding of a good team/idea
philosophy YC began with.

------
mattmanser
As a clarification, by 'shutdown' do you mean failed, or does that include
people who sold or were aquihired?

Good to see the 90% of startups fail 'statistic' blown out the water with some
facts!

~~~
frostmatthew
> Good to see the 90% of startups fail 'statistic' blown out the water with
> some facts!

If YC companies were representative of all startups there wouldn't be any
point in going through YC.

------
mhartl
Interesting to hear that eight YC companies are worth over $1b. I count
Airbnb, Dropbox, Stripe, and Twitch for sure, and probably Weebly makes five.
Any thoughts on what the others are?

~~~
bachback
+probably coinbase

~~~
MichaelGG
Depending how much they bought in when they started, they could have a huge
gain just from the increase in BTC.

------
snake117
I keep reading that seed investment firms consider it "good" if 4 out of every
10 startups they fund turn out to be something of value. Over time this is
showing to be true.

------
dantillberg
These stats are great, or at least they sound great to an aspiring
entrepreneur. I've seen stuff like this for a long time on HN, and a feeling
took hold in me that I've only started to really shake recently, a feeling
that the best and most determined founders will always get into YC, and that
failing to get into (or apply to) YC is an indication of weakness.

But just remember that, even though these numbers look amazing, you can create
a business via other means and still possibly achieve whatever sort of success
you're after -- you don't _have_ to join an accelerator, or get prestigious
seed or venture funding.

Or at least, I think that you shouldn't have to.

------
valhalla
Does anyone know where one could find (if YC's published the stat) of the
median/average age for the founders of the companies worth > $1 billion and
$100 million?

------
jkw
Which companies are the 8 that are worth >= $1 billion?

~~~
pbreit
AirBnB, Dropbox, Stripe, Twitch, Zenefits, Instacart, Docker, Machine Zone.
Not sure about the last one. Quora? Mixpanel?

Edit: oops, that's 8 without Quora & Mixpanel. Machine Zone was surprising.
Hadn't even heard of it.

~~~
jkw
Looks like you've listed 8

------
Mz
_Number of hardware + biotech + healthcare companies in the last batch: 32_

Coolios.

I take it YC has some initiative wrt biotech and healthcare and I missed it
(cuz I am busy)?

------
pbreit
Wow, 300 shutdowns. Does that include "acqui-hires"?

Also pretty incredible that they're over 100 in this last batch.

------
mdc2161
another stat from sama on twitter:

> Oh, another important stat: about 300 of the companies we have funded have
> shut down.

------
source99
Is there a calculation for REAL ROI?

Not based on current valuation but based on actual exits and money returned to
YC?

~~~
BillFranklin
Doesn't look like. But 5% of 65 billion is 3.25 billion. Nice ballpark stats.

------
bachback
see also: [http://yclist.com](http://yclist.com)

------
nicklovescode
How many founders have gone through YC?

------
andreasklinger
> Number of companies in the last batch: 107

Wow.

Just wow.

------
amelius
Over 900 companies, and all we're getting are 10 numbers? Am I missing
something?

------
7Figures2Commas
"Market cap" is a poorly-chosen descriptor because the vast majority (all?) of
the companies in YC's portfolio are private.

The use of the term "market cap" is especially ironic given Sam's recent post
on "financial misstatements"[1]. If founders are expected to use financial
terms accurately and appropriately, shouldn't investors be expected to do the
same?

[1] [http://blog.samaltman.com/financial-
misstatements](http://blog.samaltman.com/financial-misstatements)

~~~
harmegido
It looks like it says "valuation" now. However, he's not trying to pitch you
on investing in anything, so he can use whatever language he wants. The point
of the blog post that I took was that it is illegal to mislead potential
investors about your company.

~~~
7Figures2Commas
So in your mind the only reason one should use accurate language would be to
avoid the risk of civil or criminal litigation? Fascinating.

~~~
vasilipupkin
why is market cap not accurate language? Even private companies have market
caps. These market caps are set in the private markets. Market cap = # of
shares outstanding * price of each share. Applies to both private and public
companies

~~~
7Figures2Commas
Please talk to somebody who works in finance. You will virtually _never_ hear
the term "market cap" used to describe the value of private companies. If you
use this term in this context, it will be assumed that you don't know what
you're talking about.

There's a reason Sam updated the language in his post...

~~~
vasilipupkin
I work in finance :) true, the term is not often used for private companies.
But that doesn't make it any less real.

