4 ms·

He shouldn't use that $22 million average value for these calculations. It's based on current values of often quite young startups, not exit values. As I say

by pg 15y ago

He shouldn't use that $22 million average value for these calculations. It's based on current values of often quite young startups, not exit values. As I say in the post, "unless the top VC funds as a whole lose money, this number should be a lower bound on actual exit valuations." His math also assumes you invest randomly in YC startups. Any angel who was paying attention ought to be able to narrow the field a lot, which would justify proportionally higher valuations.

chrisyeh 15y ago
Paul's right that the $22 million average may end up being conservative. All it takes is for another round to increase the Dropbox valuation, which could have a significant impact on the total. But I think it quite likely that many VCs will end up losing a lot of money on recent investments.
- deleted 15y ago
  [deleted]
seats 15y ago
PG, clearly you are an apologist for YC and that's totally fine, but his post is broader than YC. I disagree that any angel 'who is paying attention' can narrow the field. In fact I would say any angels who want to have skin in the game have to just get in line, and the line is long, especially to invest in any YC company. Bottom line is that there is too much risk capital at play right now. Valuations are high and by definition returns on average are going to be low. For the mediocre and lower funds and investors they may be worse than low. YC will do just fine. The good YC startups will do just fine, but the marginal angel investor is probably not making smart investments right now. Good time to be a startup raising seed and early stage but a bad time to be on the other side of that equation.
drusenko 15y ago
what if you released the data for the first 4 years (2005-2009)? given a couple years to mature, the average value per startup would be significantly higher. not an exit value, but certainly a much better approximation.

by pg 15y ago

chrisyeh 15y ago

Paul's right that the $22 million average may end up being conservative. All it takes is for another round to increase the Dropbox valuation, which could have a significant impact on the total. But I think it quite likely that many VCs will end up losing a lot of money on recent investments.

deleted 15y ago
[deleted]

seats 15y ago

PG, clearly you are an apologist for YC and that's totally fine, but his post is broader than YC. I disagree that any angel 'who is paying attention' can narrow the field. In fact I would say any angels who want to have skin in the game have to just get in line, and the line is long, especially to invest in any YC company. Bottom line is that there is too much risk capital at play right now. Valuations are high and by definition returns on average are going to be low. For the mediocre and lower funds and investors they may be worse than low. YC will do just fine. The good YC startups will do just fine, but the marginal angel investor is probably not making smart investments right now. Good time to be a startup raising seed and early stage but a bad time to be on the other side of that equation.

drusenko 15y ago

what if you released the data for the first 4 years (2005-2009)? given a couple years to mature, the average value per startup would be significantly higher. not an exit value, but certainly a much better approximation.