
37 YC Companies have valuations of or been sold for at least $40 Million - mlinsey
https://twitter.com/paulg/status/338805881972080641
======
pshin45
Unless you're a total hater, this is an amazing achievement no matter how you
look at it.

I just have one concern, however.

Like most people on HN, I have a ton of respect for PG i.e. how smart he is,
his willingness to share his knowledge with the world, and the way he has
helped change Silicon Valley for the better.

However, what happens if/when PG decides to hang it up? OR if "God forbid"
he's _forced_ to hang it up like e.g. Steve Jobs?

Some cynics accuse YC of essentially being a (benevolent) cult with PG as the
guru with his own cult of personality. I wouldn't go that far, but you can't
deny that PG essentially _IS_ YC and without him it may be very difficult to
maintain this kind of success, much less scale it.

I have no affiliation with any of these accelerators and forgive me for
overgeneralizing, but it seems like 500 Startups and/or TechStars, while not
quite as heralded as YC, have done a much better job of hedging this kind of
risk via a much more decentralized network with multiple mentors/"gurus" in
multiple cities.

So I have two questions - (1) PG, do you ever see yourself "moving on" and
starting something brand new that is not YC-related, and if so, (2) what is
the "Steve Jobs contingency plan" for YC?

~~~
pg
The difference between me and the other partners is mostly that I got to be
publicly known by writing. On most topics there are other partners who can
give better advice than me. PB gives better advice about hacking. Geoff gives
better advice about b2b questions. Jessica is a better judge of people. Garry
and Kevin are better on design. Sam Altman is better on fundraising. If I were
hit by a bus tomorrow, YC would be pretty much as good as it is today.

This business is more naturally decentralized than a company like Apple. It
consists mostly of individual conversations between founders and YC partners,
and most of those conversations already don't include me.

------
NLPsajeeth
$40M+ Exits with Public Prices:

Heroku - W08 - $212M > Salesforce [1]

OMGPOP - S06 - $180M > Znyga [2]

SocialCam - W12 - $60M > Autodesk [3]

Loopt - S05 - $43.4M > Green Dot [4]

$40M+ Exits with Rumored Prices:

Parse - S11 - $85M > Facebook [5]

[1] [http://techcrunch.com/2010/12/08/breaking-salesforce-buys-
he...](http://techcrunch.com/2010/12/08/breaking-salesforce-buys-heroku-
for-212-million-in-cash/)

[2] [http://techcrunch.com/2012/04/26/zynga-ceo-mark-pincus-
omgpo...](http://techcrunch.com/2012/04/26/zynga-ceo-mark-pincus-omgpop-
acquisition-was-a-rare-instance/)

[3] [http://techcrunch.com/2012/07/17/socialcam-
autodesk-60-milli...](http://techcrunch.com/2012/07/17/socialcam-
autodesk-60-million/)

[4] [http://www.forbes.com/sites/ericsavitz/2012/03/09/green-
dot-...](http://www.forbes.com/sites/ericsavitz/2012/03/09/green-dot-to-buy-
loopt-for-43-4-million-in-cash/)

[5] <http://techcrunch.com/2013/04/25/facebook-parse/>

~~~
rdl
CloudKick (to Rackspace) was probably over $40mm, or close to it.

~~~
jcampbell1
I doubt your info is correct. IIRC, CloudKick had 10 employees and little
revenue. $40M seems like a steep price.

If Cloudkick's product was generating material revenue, they wouldn't have
shut it down recently.

My arm chair quaterbacking puts the deal closer to $10M for investors, and
maybe a nice bit of earnout.

~~~
rdl
<https://www.quora.com/How-much-was-Cloudkick-acquired-for>

$30-50mm seems to be the consensus in this and some other places.

$30MM cash was in the 10-K filing.

~~~
jcampbell1
Thanks, you are correct. I pulled the Feb 2011 10k, and it is clear -- $30M
cash. No other acquisitions were mentioned, so that must be it. That being
said, they show no earnouts for FY 2011 or 2012, but that could be because
retention payments just got misclassified as comp. I stand by your >$40M
comment as justifiable, likely accurate, and definitely more accurate than my
estimation.

From the 10K > During 2010, except for the $50 million repayment of our line
of credit and cash paid for an acquisition of $30 million, we were able to
maintain a consistent level of cash and cash equivalents while growing our
business by maintaining our disciplined use of capital.

~~~
rdl
I'm not arguing worth, just what they actually paid :) (There is _no likely
world_ where what Google paid for Slide was worth it, for instance)

------
hollerith
I'd rather know the sum of the valuations of all 511 companies (with the ones
tha closed down valued at zero of course).

while I am making wishes, I'd also like to know what percentage of that total
valuation is owned by cofounders rather than investors.

~~~
pg
The total valuation of those 511 is currently about $11.5 billion.

We ourselves don't know the percentage owned by founders. But considering that
investors continually complain that YC companies are overpriced, it may be
higher than the industry average.

~~~
nineteenturtles
I'm bad at math, anyone know what's 6% of $11.5 billion?

In all seriousness, congratulations pg. You've played your cards very well the
past 10 years.

~~~
pg
After dilution it will be more like 3%.

~~~
rdl
So arguably at least one of {pg, pb, etc.} could have made just as much value
over the past ~10 years by starting another startup, instead of an YC, if that
were the goal. 10 years is probably enough time to try/fail-fast at least 2
and maybe 4 times, each.

~~~
morganwilde
Probably, but you're only counting the tangible value. In my mind what they've
done is far greater in intangible value. What about HN and the community it
has nurtured? And let's not forget being a sort of pointer to true north to
most of the people thinking of creating something out of nothing. Sure, money
is easy to count and imagine, but there's plenty of people that make that, how
many PG's appear every 10 years? To paraphrase Michael Scott - you think PG's
grow on trees; well they don't; there is no PG tree.

~~~
rdl
Absolutely - I think YC's overall "consumer surplus" is over $10b, since it
somewhat changed the game for early stage startups in general, not just
startups in YC.

------
rdl
After meeting the Rap Genius guys, I'm not at all surprised they were over
$40mm valuation.

~~~
seferphier
can u elaborate a little more? i checked out the website, i'm not that
impressed about the execution or the idea.

~~~
rdl
I was in the same batch of YC with them, so I saw them fairly frequently. We
had a discussion about Gettier Problems ("justified true belief") entirely
sober, as well as normal startup stuff, so they are obviously smart.

The "rapper/swag" thing is not _all_ of their personality.

~~~
dataisfun
Oh man Gettier problems! That takes me back :)

------
brotchie
In academia there's an author metric called the H-index

> A scientist has index h if h of his/her Np papers have at least h citations
> each, and the other (Np − h) papers have no more than h citations each.

I wonder if you could apply this same methodology to VC (the v-index)

> A VC firm has index v if v of his/her Nc funded companies have had
> valuations of at least $v million, and the other (Nc − v) funded companies
> have had valuations of no more than $v million. (In some inflation adjusted
> dollars.)

$mm 0 0 0 0 5 10 10 15 22

v-index = 5

$mm 2 4 4 5 8 8 8 10 14 17 20 22 25 50 55 60 100 200

v-index = 10

Python snippit for calculation.

    
    
        def vindex(valuations):
            return max(v if sum(x >= v for x in valuations) >= v else 0 for v in range(len(valuations)))

~~~
jessriedel
Your metric uses the arbitrary unit of 1 million dollars/company. The h-metric
uses the imperfect but substantially less arbitrary unit of a citation/paper.

------
jwheeler79
A 'valuation' and a sale are completely different things. Silicon Valley VCs
are annoying as all hell. They get lucky once and all of a sudden they're
Warren Buffett.

------
NLPsajeeth
pg says in a later tweet reply [1] that it is 37 out of 511. Which is 7.24%.

[1] <https://twitter.com/paulg/status/338809374459977729>

~~~
johnrob
40 million is an arbitrary number, but it's still interesting that 7% is also
the average YC equity stake.

~~~
grinich
Why is that interesting?

~~~
johnrob
The way you justify taking x% equity is by offering to improve the odds of
success by at least x%. 40 million is definitely above any basic notion of
success, so it would indeed appear that YC is delivering.

------
gailees
It's really amazing how well YC selects their companies, and how effectively
they propel their startups forward. When talking to YC founders, you can just
tell that there is something different about them.

~~~
Ecio78
We need a YC mutual fund to invest in

------
westoque
Although I do question what being "acquired" means?

I know a friend of mine who sold his YC company and left. So I guess for him
he was just wanted to make a quick exit.

------
interg12
Disqus is worth way more than $40 million. It's going to become one of the
largest ad networks on the web with its insane publisher base.

------
Fomite
I'd like to - but I doubt ever will - see the full distribution of their 511
valuations.

------
colmworth
Incredible - even though it's 37 out of 511 companies.

------
outside1234
how many have done more than $40M in net income?

~~~
CarlosT
Don't know. However, $40M valuation implies 7% of YC companies have revenue
run rates greater than ~$2.7M per year (i.e. assuming a price of ~15x revenue)
In other words, 93% of YC companies have not made it to ~$2.7M per year in
revenue.

------
bane
what does that translate to in YC dollars?

------
ziko
I value myself quite highly as well.

------
wilfra
<https://twitter.com/heynavid/status/338813242799431681>

@heynavid "@paulg which one was the biggest surprise to you?"

@paulg "@heynavid Since I suspect they won't mind me saying so, Rap Genius."

@RapGenius "@paulg @heynavid WOOP! I was surprised that PG is tight with NWA,
personally.. <http://rapgenius.com/Nwa-express-yourself-lyrics#note-318551> "

~~~
dmix
For anyone curious, the NWA lyrics:

> "Now, getting back to the PG, that's program, and it's easy"

Means "Parental Guidance".

> Unlike most songs on the album and by N.W.A, the song is almost devoid of
> profanity and violent content.

<http://en.wikipedia.org/wiki/Express_Yourself_(N.W.A_song)>

~~~
jfb
It also builds on perhaps the greatest bass line sample ever, from Charles
Wright's "Express Yourself".

------
xkcdfanboy
The circle jerk never stops, does it? Anyone want to post the visualization of
various amounts of cash that front paged a couple months ago?

This kind of blind worship of money makes hackers look like wise-guy could-
have-been doctors but instead were lazy and decided to make a business around
popular markets for some dollars.

~~~
benologist
No.

[http://techcrunch.com/2013/05/26/paul-
graham-37-y-combinator...](http://techcrunch.com/2013/05/26/paul-
graham-37-y-combinator-companies-have-valuations-of-or-sold-for-at-least-40m/)

~~~
xkcdfanboy
Wait hold on. I'm doing an evaluation of Rap Genius so I can cure cancer.

------
terribleZurg
Bubble.

The dollar will collapse soon.

