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Actually YC companies are less biased towards IPOs than the average VC backed company because of the smaller investment and lower average burn rate, and even VC

by marcus 19y ago

Actually YC companies are less biased towards IPOs than the average VC backed company because of the smaller investment and lower average burn rate, and even VC backed companies rarely IPO in todays market. In conclusion I wouldn't hold my breath.

SwellJoe 19y ago
There are a few YC companies for which IPO is a pretty reasonable outcome, though acquisition may still end up being the way they exit. As you note, IPO is much less likely than in the past, due to the regulatory environment and tanking stock market. But, it's still early yet. I wouldn't rule out an IPO from a YC company or two in the next three years.
pg 19y ago
Nearly all (good) startups start small, but lots of YC-funded startups have now raised more than Google did initially. I believe 9 have done series A rounds, and many more have done big angel rounds.
- marcus 19y ago
  The point is that because of the lower funding they have a lot more exit options than an average VC backed company and can exit in a lower valuation where an IPO doesn't make sense. Of course some of your companies have awesome potential ( I wouldn't have applied if I didn't believe in the model) but they have a lower incentive to wait for an IPO than a VC backed company.
- marcus 19y ago
  Google raised more than 25M USD in its first year in a series A round, the largest round done by a YC backed company I could find was 12M (Loopt) and that was a B series round. http://en.wikipedia.org/wiki/Y_Combinator http://en.wikipedia.org/wiki/Y_Combinator http://www.google.com/press/pressrel/pressrelease1.html http://www.google.com/press/pressrel/pressrelease1.html
  - sharpshoot 19y ago
    There was a seed round before that to get them started which was a lot larger than most YC startups take. Anyway, what does the size of the round have to do with what you are trying to prove?
    - marcus 19y ago
      My point is that Google's had very few exit strategies other than an IPO once it took 25M in VC money. Most YC startups have more flexibility regarding their exit strategy.
  - pg 19y ago
    Google's series A round was not the first money they raised.

by marcus 19y ago

SwellJoe 19y ago

There are a few YC companies for which IPO is a pretty reasonable outcome, though acquisition may still end up being the way they exit. As you note, IPO is much less likely than in the past, due to the regulatory environment and tanking stock market. But, it's still early yet. I wouldn't rule out an IPO from a YC company or two in the next three years.

pg 19y ago

Nearly all (good) startups start small, but lots of YC-funded startups have now raised more than Google did initially. I believe 9 have done series A rounds, and many more have done big angel rounds.

marcus 19y ago
The point is that because of the lower funding they have a lot more exit options than an average VC backed company and can exit in a lower valuation where an IPO doesn't make sense. Of course some of your companies have awesome potential ( I wouldn't have applied if I didn't believe in the model) but they have a lower incentive to wait for an IPO than a VC backed company.
marcus 19y ago
Google raised more than 25M USD in its first year in a series A round, the largest round done by a YC backed company I could find was 12M (Loopt) and that was a B series round. http://en.wikipedia.org/wiki/Y_Combinator http://en.wikipedia.org/wiki/Y_Combinator http://www.google.com/press/pressrel/pressrelease1.html http://www.google.com/press/pressrel/pressrelease1.html
- sharpshoot 19y ago
  There was a seed round before that to get them started which was a lot larger than most YC startups take. Anyway, what does the size of the round have to do with what you are trying to prove?
  - marcus 19y ago
    My point is that Google's had very few exit strategies other than an IPO once it took 25M in VC money. Most YC startups have more flexibility regarding their exit strategy.
- pg 19y ago
  Google's series A round was not the first money they raised.