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Is it true that Dropbox/AirBNB make up most of YC's (monetary) value? I know they're the big ones, but it still sounds fishy. What about Reddit, for example? He

by edanm 14y ago

Is it true that Dropbox/AirBNB make up most of YC's (monetary) value? I know they're the big ones, but it still sounds fishy. What about Reddit, for example? Heroku? The company that built Draw Something? (I forget their name). Also, many of the 400 companies who have been through YC are very recent, and simply haven't had a chance to grow as much as Dropbox has. Other than these questions, I think the article does make a few valid points - it does seem to me that there are a lot of programs around, and I'm not sure they are worth the time for most people. I'd be interested to know if the prevailing sentiment among VCs really is that most seed accelerators don't matter (discluding YC).

ig1 14y ago
1) Yes. It's true of angel investments generally too, the top companies form a disproportionately large percentage of the value. 2) Yes, you basically need to do cohort analysis for meaningful results. 3) It depends what you mean by "most seed accelerators don't matter", certainly there's a big drop-off in quality in startups as you go further down the rankings of seed accelerators and VCs pay less attention to them. That doesn't mean that the accelerators aren't adding value to the startups though.
- edanm 14y ago
  Yes, it turns out the article is correct (see also frankdenbow's helpful comment below). Follow-up question/observation: the article makes it see like only Dropbox and AirBNB were "winners", which I understood to mean they were the only 2 that gave YC a return. Here's the quote from the article: 'And even though most YC companies have no problems raising additional capital, the program has only produced two big “winners.” Dropbox and Airbnb make up three quarters of the value of Y Combinator’s $10 billion portfolio. That’s two huge successes out of something like 400 companies.' Is this only true because Dropbox and Airbnb are spectacularly successful? E.g., if another YC company became the next Google next year, would the article have said "YC has produced only 1 success", and Drobpox/Airbnb would be relegated to "not as good as the Google-sized success"?
frankdenbow 14y ago
Yes, PG talks about it here http://paulgraham.com/swan.html http://paulgraham.com/swan.html
deleted 14y ago
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uptown 14y ago
>The company that built Draw Something? (I forget their name). OMGPOP

by edanm 14y ago

ig1 14y ago

1) Yes. It's true of angel investments generally too, the top companies form a disproportionately large percentage of the value. 2) Yes, you basically need to do cohort analysis for meaningful results. 3) It depends what you mean by "most seed accelerators don't matter", certainly there's a big drop-off in quality in startups as you go further down the rankings of seed accelerators and VCs pay less attention to them. That doesn't mean that the accelerators aren't adding value to the startups though.

edanm 14y ago
Yes, it turns out the article is correct (see also frankdenbow's helpful comment below). Follow-up question/observation: the article makes it see like only Dropbox and AirBNB were "winners", which I understood to mean they were the only 2 that gave YC a return. Here's the quote from the article: 'And even though most YC companies have no problems raising additional capital, the program has only produced two big “winners.” Dropbox and Airbnb make up three quarters of the value of Y Combinator’s $10 billion portfolio. That’s two huge successes out of something like 400 companies.' Is this only true because Dropbox and Airbnb are spectacularly successful? E.g., if another YC company became the next Google next year, would the article have said "YC has produced only 1 success", and Drobpox/Airbnb would be relegated to "not as good as the Google-sized success"?

frankdenbow 14y ago

Yes, PG talks about it here http://paulgraham.com/swan.html http://paulgraham.com/swan.html

deleted 14y ago

[deleted]

uptown 14y ago

>The company that built Draw Something? (I forget their name). OMGPOP