6 ms·

Current value of the top 30 YC companies is about $575B

99 points by sillysaurusx 5y ago

santiagobasulto 5y ago
Airbnb's current market cap is ~100B. How much do you think is Stripe worth? I think Stripe doesn't go public because it'd just break the market; pop the bubble.
- arnvald 5y ago
  Earlier this year (Q1) they raised another round at ~100B
  - beckman466 5y ago
    Being a middleman has never been more profitable
- boringg 5y ago
  How would it break the market? Stripe is going to be one of the biggest IPOs for sure when it goes shortly
karimf 5y ago
Anyone has any idea how much percentage YC has for those companies on average?
- Sebb767 5y ago
  See here: https://www.ycombinator.com/deal/ https://www.ycombinator.com/deal/ It's 7% pre-dilution. Given the value of the companies, however, that's still a solid share.
  - karimf 5y ago
    Yes. Is there a way to calculate after dilution, or is it impossible without knowing the cap table of each companies?
    - pge 5y ago
      impossible without cap tables, as it depends on how much capital has been raised an and at what valuation
- tomhoward 5y ago
  They take 6-8% when they first invest, but then they get diluted down by later investments, though they also have the Continuity fund that participates in later rounds, so that reduces the dilution. On average it’s probably 2-4% by the time companies get past $1B cap.
- santiagobasulto 5y ago
  Starts with 7% of (I think) common stock. Then there's dilution on each following round. But I think YC started with the SAFE so they could match in higher rounds (with preference price) and avoid diluting. But I'm not sure at all, someone else might know better.
1cvmask 5y ago
This is Paul Graham tweet in full: Someone asked what the total value of YC companies was, so I tried calculating it. The current value of the top 30 is about $575 billion. When we started YC, I would have been astounded if you'd told me it would one day be $5.75 billion. - The remarkable thing about YC is that they truly innovated on the schooling aspect of venture and transformed the meaning of accelerator to business flywheel. For high school students with aspirations in the tech field it is like the MIT, Caltech and Stanford all rolled into one.
- tester756 5y ago
  >For high school students with aspirations in the tech field it is like the MIT, Caltech and Stanford all rolled into one. What does it mean? does PG teach maths and stuff? (/s)
  - napoleoncomplex 5y ago
    I think it's meant as a comment on how much opportunity in the startup/VC world being a part of YC brings to one's life/career. You get access to great mentors/ex-founders with their strong networks of influence, you work alongside other above-average entrepreneurs, you present in front of a huge and reputable audience of VCs, wearing YC's stamp of approval, and on and on... It's like winning the opportunity lotto, much the same as with those top-tier universities, where the brand and the network is more than half the value, not the lectures themselves.
    - tester756 5y ago
      >It's like winning the opportunity lotto, much the same as with those top-tier universities, is it actually this good?
      - jacquesm 5y ago
        That depends on your life goals.
      - 5y ago
mxschumacher 5y ago
so a little more than one fifth of Microsoft
- blowski 5y ago
  Which is really impressive when you think Microsoft is probably made up of 100s of companies, and has itself been around for more than 40 years. I guess it's one of those numbers that - if you zoom out over the last 150 years - shows how much tech has taken over the world.
  - mxschumacher 5y ago
    I'm a hesitant about using "tech" and "software" as equivalents. Pharma, Oil & Gas and the car industry are all high - tech for example. What is unique about Microsoft and other large "tech" firms is that they are natural oligopolies that have very low distribution cost and become more valuable as they get bigger. They benefit from massive network and platform effects (the world is running on Excel, all companies are moving towards the cloud, there are only two mobile operating systems, Metcalfe's law drives social media company valuations). These companies are very valuable, because they are very profitable. They are very profitable because they're hard to compete with. Google couldn't make a dent in social media, Microsoft failed in search and mobile, Amazon couldn't get into mobile etc) In cars, almost nobody really makes money over the long term, all profits are competed away. But the car industry is gigantic, GM's revenue is only a little bit smaller than than of Microsoft. It's a high capex, low profit industry and many incredibly strong players exist. Great for consumers, bad for capitalists.
    - sumedh 5y ago
      > Google couldn't make a dent in social media Google had a pretty popular network in some countries called Orkut. Google Talk was fairly popular as well. Google could have just focused on making them better instead of creating new products like Google +, Buzz, Wave, and multiple chat apps.
      - 5y ago
ak_111 5y ago
Anyone wants to try and make an educated guess how much YC's market cap would be worth if it was trading on the stock market (similar to Berkshire Hathaway)? My estimate would be something like 25-30B.
- edwnj 5y ago
  100B+.. Stocks usually trade multiples of their net worth and revenue and this is especially high for tech companies. Also I cant imagine a more accurate index to put in your portfolio for tech startup exposure and when you consider the number of people who want exposure but is not accredited, its not a stretch to see a 100B+ market cap. Not to mention the hype, prestige and track record of YC. Basically every investor attends demo day has a pretty good reason to buy some YC.
raesene9 5y ago
Looking at the publicly quoted YC companies from this list https://www.ycombinator.com/topcompanies https://www.ycombinator.com/topcompanies they have a combined market cap of $297.18b and in 2020 their combined losses were $5.5b. only one of the 10 was profitable (coinbase) Seems like market valuations aren't that closely tied to profitability at the moment...
- ak_111 5y ago
  This is very common for tech stock, not a YC problem. Even Tesla was barely profitable until very recently, while Amazon spent the first 20 years of its existence barely breaking even.
  - raesene9 5y ago
    People often use Amazon as an example of why start-ups don't need to be profitable, but I'm not sure it's a good example. Amazon wasn't profitable (at least in part) because it was building a massive network of warehouses, datacentres and logistics systems, that provide a large competitive moat. That's not the case for most (or possibly even a majority) of start-ups. The standard reasoning is that we're pricing in future growth. but once a company fills most of it's market sector and stops growing, that rational makes less sense.
    - ak_111 5y ago
      I see your point, but am not using it as an example why start-ups don't need to be profitable. Just using it as an example to why being unprofitable doesn't prevent you from having a high valuation on the stock market. If you don't like this example, then almost all the recent crazy ipos were unprofitable companies. Actually a profitable tech ipo is highly exceptional these days.
      - raesene9 5y ago
        yep that's kind of my point :) There's a huge number of IPOs/public companies with very high valuations and low profitability. The YC companies are just an example of that, which is relevant to the story at hand.
hnmullany 5y ago
Has YC ever published a full retrospective of the YC classes by cohort: for every class showing last company valuation or year of exit (M&A, acquihire, shutdown)?
- sillysaurusx 5y ago
  Actually, I remember a website that did exactly that. It wasn't affiliated with YC, but it was a spreadsheet that listed all of those metrics (alive/dead/acquired, most recent funding round, acquisition price, etc) EDIT: Found it: https://yclist.com/ https://yclist.com/ It doesn't the show most recent funding round. I guess that was just something I've always wanted. (You'd get so much data about each company's trajectory...) Their github has a .txt file for each YC batch from 2005 through 2017 too, which is pretty neat: https://github.com/linrock/yclist/tree/master/companies https://github.com/linrock/yclist/tree/master/companies
deleted 5y ago
[deleted]
drumhead 5y ago
Its a bubble inflated by some of the loosest monetary policy in history. Caveat emptor etc, etc.
mdorazio 5y ago
Now, what's the value of the bottom 300 YC companies? The median value of YC companies? I think we all know the answer, but it would be nice if pg gave an accurate assessment of how the VC funnel works and the actual likelihood for a founder to get to even a $100M company level.
exogeny 5y ago
The implication of course is that YC is great at picking companies, which is assuredly true. But they also fund what, like 200 per session? Do not discount the degree in which quantity plays a part here.

99 points by sillysaurusx 5y ago

Airbnb's current market cap is ~100B. How much do you think is Stripe worth? I think Stripe doesn't go public because it'd just break the market; pop the bubble.

arnvald 5y ago
Earlier this year (Q1) they raised another round at ~100B
- beckman466 5y ago
  Being a middleman has never been more profitable
boringg 5y ago
How would it break the market? Stripe is going to be one of the biggest IPOs for sure when it goes shortly

karimf 5y ago

Anyone has any idea how much percentage YC has for those companies on average?

Sebb767 5y ago
See here: https://www.ycombinator.com/deal/ https://www.ycombinator.com/deal/ It's 7% pre-dilution. Given the value of the companies, however, that's still a solid share.
- karimf 5y ago
  Yes. Is there a way to calculate after dilution, or is it impossible without knowing the cap table of each companies?
  - pge 5y ago
    impossible without cap tables, as it depends on how much capital has been raised an and at what valuation
tomhoward 5y ago
They take 6-8% when they first invest, but then they get diluted down by later investments, though they also have the Continuity fund that participates in later rounds, so that reduces the dilution. On average it’s probably 2-4% by the time companies get past $1B cap.
santiagobasulto 5y ago
Starts with 7% of (I think) common stock. Then there's dilution on each following round. But I think YC started with the SAFE so they could match in higher rounds (with preference price) and avoid diluting. But I'm not sure at all, someone else might know better.

1cvmask 5y ago

This is Paul Graham tweet in full: Someone asked what the total value of YC companies was, so I tried calculating it. The current value of the top 30 is about $575 billion. When we started YC, I would have been astounded if you'd told me it would one day be $5.75 billion. - The remarkable thing about YC is that they truly innovated on the schooling aspect of venture and transformed the meaning of accelerator to business flywheel. For high school students with aspirations in the tech field it is like the MIT, Caltech and Stanford all rolled into one.

tester756 5y ago
>For high school students with aspirations in the tech field it is like the MIT, Caltech and Stanford all rolled into one. What does it mean? does PG teach maths and stuff? (/s)
- napoleoncomplex 5y ago
  I think it's meant as a comment on how much opportunity in the startup/VC world being a part of YC brings to one's life/career. You get access to great mentors/ex-founders with their strong networks of influence, you work alongside other above-average entrepreneurs, you present in front of a huge and reputable audience of VCs, wearing YC's stamp of approval, and on and on... It's like winning the opportunity lotto, much the same as with those top-tier universities, where the brand and the network is more than half the value, not the lectures themselves.
  - tester756 5y ago
    >It's like winning the opportunity lotto, much the same as with those top-tier universities, is it actually this good?
    - jacquesm 5y ago
      That depends on your life goals.
    - 5y ago

mxschumacher 5y ago

so a little more than one fifth of Microsoft

blowski 5y ago
Which is really impressive when you think Microsoft is probably made up of 100s of companies, and has itself been around for more than 40 years. I guess it's one of those numbers that - if you zoom out over the last 150 years - shows how much tech has taken over the world.
- mxschumacher 5y ago
  I'm a hesitant about using "tech" and "software" as equivalents. Pharma, Oil & Gas and the car industry are all high - tech for example. What is unique about Microsoft and other large "tech" firms is that they are natural oligopolies that have very low distribution cost and become more valuable as they get bigger. They benefit from massive network and platform effects (the world is running on Excel, all companies are moving towards the cloud, there are only two mobile operating systems, Metcalfe's law drives social media company valuations). These companies are very valuable, because they are very profitable. They are very profitable because they're hard to compete with. Google couldn't make a dent in social media, Microsoft failed in search and mobile, Amazon couldn't get into mobile etc) In cars, almost nobody really makes money over the long term, all profits are competed away. But the car industry is gigantic, GM's revenue is only a little bit smaller than than of Microsoft. It's a high capex, low profit industry and many incredibly strong players exist. Great for consumers, bad for capitalists.
  - sumedh 5y ago
    > Google couldn't make a dent in social media Google had a pretty popular network in some countries called Orkut. Google Talk was fairly popular as well. Google could have just focused on making them better instead of creating new products like Google +, Buzz, Wave, and multiple chat apps.
    - 5y ago

ak_111 5y ago

Anyone wants to try and make an educated guess how much YC's market cap would be worth if it was trading on the stock market (similar to Berkshire Hathaway)? My estimate would be something like 25-30B.

edwnj 5y ago
100B+.. Stocks usually trade multiples of their net worth and revenue and this is especially high for tech companies. Also I cant imagine a more accurate index to put in your portfolio for tech startup exposure and when you consider the number of people who want exposure but is not accredited, its not a stretch to see a 100B+ market cap. Not to mention the hype, prestige and track record of YC. Basically every investor attends demo day has a pretty good reason to buy some YC.

raesene9 5y ago

Looking at the publicly quoted YC companies from this list https://www.ycombinator.com/topcompanies https://www.ycombinator.com/topcompanies they have a combined market cap of $297.18b and in 2020 their combined losses were $5.5b. only one of the 10 was profitable (coinbase) Seems like market valuations aren't that closely tied to profitability at the moment...

ak_111 5y ago
This is very common for tech stock, not a YC problem. Even Tesla was barely profitable until very recently, while Amazon spent the first 20 years of its existence barely breaking even.
- raesene9 5y ago
  People often use Amazon as an example of why start-ups don't need to be profitable, but I'm not sure it's a good example. Amazon wasn't profitable (at least in part) because it was building a massive network of warehouses, datacentres and logistics systems, that provide a large competitive moat. That's not the case for most (or possibly even a majority) of start-ups. The standard reasoning is that we're pricing in future growth. but once a company fills most of it's market sector and stops growing, that rational makes less sense.
  - ak_111 5y ago
    I see your point, but am not using it as an example why start-ups don't need to be profitable. Just using it as an example to why being unprofitable doesn't prevent you from having a high valuation on the stock market. If you don't like this example, then almost all the recent crazy ipos were unprofitable companies. Actually a profitable tech ipo is highly exceptional these days.
    - raesene9 5y ago
      yep that's kind of my point :) There's a huge number of IPOs/public companies with very high valuations and low profitability. The YC companies are just an example of that, which is relevant to the story at hand.

hnmullany 5y ago

Has YC ever published a full retrospective of the YC classes by cohort: for every class showing last company valuation or year of exit (M&A, acquihire, shutdown)?

sillysaurusx 5y ago
Actually, I remember a website that did exactly that. It wasn't affiliated with YC, but it was a spreadsheet that listed all of those metrics (alive/dead/acquired, most recent funding round, acquisition price, etc) EDIT: Found it: https://yclist.com/ https://yclist.com/ It doesn't the show most recent funding round. I guess that was just something I've always wanted. (You'd get so much data about each company's trajectory...) Their github has a .txt file for each YC batch from 2005 through 2017 too, which is pretty neat: https://github.com/linrock/yclist/tree/master/companies https://github.com/linrock/yclist/tree/master/companies

deleted 5y ago

[deleted]

drumhead 5y ago

Its a bubble inflated by some of the loosest monetary policy in history. Caveat emptor etc, etc.

mdorazio 5y ago

Now, what's the value of the bottom 300 YC companies? The median value of YC companies? I think we all know the answer, but it would be nice if pg gave an accurate assessment of how the VC funnel works and the actual likelihood for a founder to get to even a $100M company level.

exogeny 5y ago

The implication of course is that YC is great at picking companies, which is assuredly true. But they also fund what, like 200 per session? Do not discount the degree in which quantity plays a part here.