23 ms·

I don't understand. Do you mean startups we fund that don't do well, or startups we don't fund?

by pg 15y ago

hvass 15y ago
I would be curious about startups you do not fund
arjunnarayan 15y ago
I would be interested in the valuation of the group of companies that you "almost" funded. Let's say you ranked startups during admission on a 1 to 100 scale, and took the top 20 scoring startups. (I don't know if this is the metric you used, but I imagine the following protocol could be adapted regardless; as long as you kept the data.) Take the bottom 5 scoring startups that you funded - i.e. the ones that just made it. Now compare their outcomes to the next 5 --- i.e. the top 5 scoring startups that didn't get funded. If you see a significant difference, that could show that being a part of YC adds tremendous value to a company. On the other hand, this sort of analysis is really hard because the data points are so few, and the noise in the data so high (the volatility is just too much to make meaningful conclusions). It's still an interesting experiment to run, because there is a chance that being a part of YC adds just such a large amount of value that it still comes out in the data. This sounds like a good instrumental-variable exercise for finding out whether the YC branding adds a significant amount of value to investors.
gabrielroth 15y ago
My understanding is that the person who asked that question wants to measure the value YC is adding, separate from YC's ability to select promising teams. Obviously there's no way to separate those things, so s/he suggested an absurd experimental setup in which half of the accepted startups, chosen at random, would be excluded from YC.
- eru 15y ago
  Don't just exclude them. Replace them at random with normally rejected companies.
zyfo 15y ago
The control group would consist of the hypothetical startups that you didn't fund (but were qualitively equal to the ones you did fund). EDIT: gabrielroth got it.

I don't understand. Do you mean startups we fund that don't do well, or startups we don't fund?

by pg 15y ago

I don't understand. Do you mean startups we fund that don't do well, or startups we don't fund?

hvass 15y ago

I would be curious about startups you do not fund

arjunnarayan 15y ago

I would be interested in the valuation of the group of companies that you "almost" funded. Let's say you ranked startups during admission on a 1 to 100 scale, and took the top 20 scoring startups. (I don't know if this is the metric you used, but I imagine the following protocol could be adapted regardless; as long as you kept the data.) Take the bottom 5 scoring startups that you funded - i.e. the ones that just made it. Now compare their outcomes to the next 5 --- i.e. the top 5 scoring startups that didn't get funded. If you see a significant difference, that could show that being a part of YC adds tremendous value to a company. On the other hand, this sort of analysis is really hard because the data points are so few, and the noise in the data so high (the volatility is just too much to make meaningful conclusions). It's still an interesting experiment to run, because there is a chance that being a part of YC adds just such a large amount of value that it still comes out in the data. This sounds like a good instrumental-variable exercise for finding out whether the YC branding adds a significant amount of value to investors.

gabrielroth 15y ago

My understanding is that the person who asked that question wants to measure the value YC is adding, separate from YC's ability to select promising teams. Obviously there's no way to separate those things, so s/he suggested an absurd experimental setup in which half of the accepted startups, chosen at random, would be excluded from YC.

eru 15y ago
Don't just exclude them. Replace them at random with normally rejected companies.

zyfo 15y ago

The control group would consist of the hypothetical startups that you didn't fund (but were qualitively equal to the ones you did fund). EDIT: gabrielroth got it.