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The total valuation of those 511 is currently about $11.5 billion. We ourselves don't know the percentage owned by founders. But considering that investors co

by pg 13y ago

The total valuation of those 511 is currently about $11.5 billion. We ourselves don't know the percentage owned by founders. But considering that investors continually complain that YC companies are overpriced, it may be higher than the industry average.

hollerith 13y ago
>We ourselves don't know the percentage owned by founders. When one of them goes public, we'll find out how much of that one is founder-owned :) Thanks for the info.
icpmacdo 13y ago
I find it interesting that the current average valuation of a YC company is 22.5 million which is almost identical to what it was 2 years ago when there was 210 companys "the average value of startups we've funded is about $22.4 million" http://ycombinator.com/nums.html http://ycombinator.com/nums.html
- pg 13y ago
  That is interesting. The reason it hasn't changed is convertible notes. Now most of the fundraising immediately after Demo Day is on notes. Since a note doesn't establish a valuation, we add zero to the total valuation for those companies. So the number you get by dividing the total valuation by 511 ends up being pretty conservative; it's equivalent to assuming all the companies that have raised money on notes will go out of business. The average valuation of the 268 of those 511 companies that have valuations (by being acquired, raising an equity round, or going out of business, in which case it's zero) is $43 million.
  - hglaser 13y ago
    Why not use the valuation cap on the note (in cases where there is one) in place of the valuation? Is there a reason you wouldn't consider it equivalent to a valuation for the purposes of a rough calculation like this?
    - pg 13y ago
      A valuation cap is merely an upper bound on a valuation. I'd rather be conservative and wait till there is a valuation.
nineteenturtles 13y ago
I'm bad at math, anyone know what's 6% of $11.5 billion? In all seriousness, congratulations pg. You've played your cards very well the past 10 years.
- pg 13y ago
  After dilution it will be more like 3%.
  - rdl 13y ago
    So arguably at least one of {pg, pb, etc.} could have made just as much value over the past ~10 years by starting another startup, instead of an YC, if that were the goal. 10 years is probably enough time to try/fail-fast at least 2 and maybe 4 times, each.
    - deleted 13y ago
      [deleted]
    - omegant 13y ago
      On money yes, but the overall impact is much bigger this way. And the experience is in a certain way more like founding 300 startups not only 2 or 3.
    - morganwilde 13y ago
      Probably, but you're only counting the tangible value. In my mind what they've done is far greater in intangible value. What about HN and the community it has nurtured? And let's not forget being a sort of pointer to true north to most of the people thinking of creating something out of nothing. Sure, money is easy to count and imagine, but there's plenty of people that make that, how many PG's appear every 10 years? To paraphrase Michael Scott - you think PG's grow on trees; well they don't; there is no PG tree.
      - rdl 13y ago
        Absolutely - I think YC's overall "consumer surplus" is over $10b, since it somewhat changed the game for early stage startups in general, not just startups in YC.
cperciva 13y ago
We ourselves don't know the percentage owned by founders. Isn't it almost always going to be the case that the founders got diluted by the same proportion as you did? In which case, based on your comment below of YC being diluted from about 6% to about 3%, presumably the founders (who started out owning almost all the stock) would now be around 50%. I feel like I must be missing something obvious here.
- pg 13y ago
  That's an estimate of what will happen eventually in the biggest companies, based on industry norms. But we don't know how much we've been diluted so far in individual companies.
beat 13y ago
Bah. They're not "overpriced" as long as someone is willing to pay the price. Startup pricing is about as close to a frictionless transaction as we're going to see. What they're actually complaining about is that the YC companies are getting better terms from investors, thanks to PG/YC's deliberate efforts to shift the balance of power in favor of the founders. I'm not crying tears for them. They don't like the terms, they're welcome to walk away from the table.

by pg 13y ago

hollerith 13y ago

>We ourselves don't know the percentage owned by founders. When one of them goes public, we'll find out how much of that one is founder-owned :) Thanks for the info.

icpmacdo 13y ago

I find it interesting that the current average valuation of a YC company is 22.5 million which is almost identical to what it was 2 years ago when there was 210 companys "the average value of startups we've funded is about $22.4 million" http://ycombinator.com/nums.html http://ycombinator.com/nums.html

pg 13y ago
That is interesting. The reason it hasn't changed is convertible notes. Now most of the fundraising immediately after Demo Day is on notes. Since a note doesn't establish a valuation, we add zero to the total valuation for those companies. So the number you get by dividing the total valuation by 511 ends up being pretty conservative; it's equivalent to assuming all the companies that have raised money on notes will go out of business. The average valuation of the 268 of those 511 companies that have valuations (by being acquired, raising an equity round, or going out of business, in which case it's zero) is $43 million.
- hglaser 13y ago
  Why not use the valuation cap on the note (in cases where there is one) in place of the valuation? Is there a reason you wouldn't consider it equivalent to a valuation for the purposes of a rough calculation like this?
  - pg 13y ago
    A valuation cap is merely an upper bound on a valuation. I'd rather be conservative and wait till there is a valuation.

nineteenturtles 13y ago

I'm bad at math, anyone know what's 6% of $11.5 billion? In all seriousness, congratulations pg. You've played your cards very well the past 10 years.

pg 13y ago
After dilution it will be more like 3%.
- rdl 13y ago
  So arguably at least one of {pg, pb, etc.} could have made just as much value over the past ~10 years by starting another startup, instead of an YC, if that were the goal. 10 years is probably enough time to try/fail-fast at least 2 and maybe 4 times, each.
  - deleted 13y ago
    [deleted]
  - omegant 13y ago
    On money yes, but the overall impact is much bigger this way. And the experience is in a certain way more like founding 300 startups not only 2 or 3.
  - morganwilde 13y ago
    Probably, but you're only counting the tangible value. In my mind what they've done is far greater in intangible value. What about HN and the community it has nurtured? And let's not forget being a sort of pointer to true north to most of the people thinking of creating something out of nothing. Sure, money is easy to count and imagine, but there's plenty of people that make that, how many PG's appear every 10 years? To paraphrase Michael Scott - you think PG's grow on trees; well they don't; there is no PG tree.
    - rdl 13y ago
      Absolutely - I think YC's overall "consumer surplus" is over $10b, since it somewhat changed the game for early stage startups in general, not just startups in YC.

cperciva 13y ago

We ourselves don't know the percentage owned by founders. Isn't it almost always going to be the case that the founders got diluted by the same proportion as you did? In which case, based on your comment below of YC being diluted from about 6% to about 3%, presumably the founders (who started out owning almost all the stock) would now be around 50%. I feel like I must be missing something obvious here.

pg 13y ago
That's an estimate of what will happen eventually in the biggest companies, based on industry norms. But we don't know how much we've been diluted so far in individual companies.

beat 13y ago

Bah. They're not "overpriced" as long as someone is willing to pay the price. Startup pricing is about as close to a frictionless transaction as we're going to see. What they're actually complaining about is that the YC companies are getting better terms from investors, thanks to PG/YC's deliberate efforts to shift the balance of power in favor of the founders. I'm not crying tears for them. They don't like the terms, they're welcome to walk away from the table.