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"On average, Y Combinator will increase your expected outcome by at least 5x. They usually take 2-10% of your stock in exchange. That's a great deal!" That see

"On average, Y Combinator will increase your expected outcome by at least 5x. They usually take 2-10% of your stock in exchange. That's a great deal!" That seems like an optimistic way to phrase the proposition. Sure, they increase the outcome by 5x(+) for the 20%(+) of companies that eventually get sold...as all VC funding hopes to do. Or, I suppose they can increase your outcome by 5x compared to sitting at home... YC sounds like it can be a fantastic deal, but it can't really be 5-20x better than your other options.

paul 20y ago
Why can't it really be 5-20x better than your other options?
- sethjohn 20y ago
  If you have an idea and a management team that's good enough to make it with the help of YC, it's hard to believe you couldn't get the funding and make the connections that you need to succeed in another way. I don't know a whole lot about the success of YC companies, but it looks like Reddit is their big success so far. Reddit sold for a reported 65 million (according to The Google), and they needed relatively little additional funding after the seed money. So let's say YC retained 3% of the company, they make 2 million which is a 100x return on their investment. Wow, I just did the math now...that's pretty impressive. Update: A new search on The Google (link) suggests that the purchase price may have been much lower. Proponents of the "50-million my ass" school of thought are suggesting 5 million is closer to the mark. At 5 million, YC gets a 10x return on investment which is what all VC money is shooting for among successful (non-broke) companies. http://reddit.com/user/bmatkin/ http://reddit.com/user/bmatkin/ Larger point, if you're in it to win it you should be able to pull it off with or without YC. Sure YC connections and advice are tremendously valueable...but 5x to 20x better than the other smart VC/angel/seed money out there? No way!

paul 20y ago

Why can't it really be 5-20x better than your other options?

sethjohn 20y ago
If you have an idea and a management team that's good enough to make it with the help of YC, it's hard to believe you couldn't get the funding and make the connections that you need to succeed in another way. I don't know a whole lot about the success of YC companies, but it looks like Reddit is their big success so far. Reddit sold for a reported 65 million (according to The Google), and they needed relatively little additional funding after the seed money. So let's say YC retained 3% of the company, they make 2 million which is a 100x return on their investment. Wow, I just did the math now...that's pretty impressive. Update: A new search on The Google (link) suggests that the purchase price may have been much lower. Proponents of the "50-million my ass" school of thought are suggesting 5 million is closer to the mark. At 5 million, YC gets a 10x return on investment which is what all VC money is shooting for among successful (non-broke) companies. http://reddit.com/user/bmatkin/ http://reddit.com/user/bmatkin/ Larger point, if you're in it to win it you should be able to pull it off with or without YC. Sure YC connections and advice are tremendously valueable...but 5x to 20x better than the other smart VC/angel/seed money out there? No way!