3 ms·

"Conversion" rate, as defined here, doesn't make sense for YC's (or any startup investors') financial model. Valuation could be useful. Maybe track the change

• hn_throwaway_99 9y ago
  But I don't think the point of this is to look at it from the investors' point of view. The point is to look at it from the founders' point of view. That is, as a founder, what's your basic (binary) chance of your company being a success? Founders don't get the chance to diversify across many companies - all of their eggs are in one (their own company's) basket. Thus, for them, a "percentage chance of a positive outcome" is an important metric.
  • namank 9y ago
    Then why doesn't the metric account for companies that have not shutdown and not exited, i.e. have grown beyond a certain value? Isn't that closer to the most favorable founder outcome?
    • hn_throwaway_99 9y ago
      That metric (grown beyond a certain value) is much harder to get for private companies, and private valuations are all pretty fuzzy anyway. Exits represent a real, verifiable, concrete event. I don't think his metric is perfect, and there are other ones (how many companies just shut down and returned what was left to investors) you can look at, but overall I think it's a good proxy for "what percentage of ycom companies have a positive outcome".