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Does anyone know what has been PG's ROI on his investments is, for all we know it could be below industry standard. Also, by PG's own words he only invests in

by unono 13y ago

Does anyone know what has been PG's ROI on his investments is, for all we know it could be below industry standard. Also, by PG's own words he only invests in the relentlessly resourceful. What do they need PG and later round VC's for? I always get the feeling with PG that something hidden is at play, he's a really really clever guy. There's a sucker getting played when he's around. (For example, Zuckerburg is not as smart as PG keeps enthusing, there's a lot smarter guys than him, so I think he's got some sell YC companies to Facebook flow going on. Another, Andrew Mason is just a terrible business guy - why is PG linking with him - probably experience at knowing how to keep investors from realizing what's actually happening).

arbuge 13y ago
>> Does anyone know what has been PG's ROI on his investments is, for all we know it could be below industry standard. Hell no. Just do the math: http://ycombinator.com/nums.html http://ycombinator.com/nums.html The total value of YC companies is more like $12B today. That makes their average 6% stake worth around $700m or so. Around 600 companies total, at around $20k each - a total investment of just $12m or so by my calculations. $12m to $700m in <10 years is about as good as it gets in investing.
- unono 13y ago
  If that's true, then that's astounding. Why isn't some huge wall street fund swooping in to this? Do people not know. The White House should be calling in PG for advice.
  - patio11 13y ago
    That's a good question. The main reason is that the hypothetical Huge Wall Street Firm doesn't see a way to reproduce the project at scale. They don't have pg et al, and while YC is applying mass-production techniques to startups, by the standards of markets where APIs exist to conduct transactions they're still in the early industrial revolution. If pg was just a decision engine for Startup#fund(amount), a vaguely specified API which could put hundreds of millions of dollars to work on any given day and which didn't require artisanal mentorship and connection-making of the fledgling startups, you would expect somebody from Wall Street to already have said "We can offer you an arbitrarily high amount of money to do that for us."
    - unono 13y ago
      That's a good point - PG is essentially decision engine. All YC investments are public and some investor could go through and build PG's model using videotapes of all those founders. Collect all this data, put a few data scientists on it, and build a virtual PG. The connections don't matter if you're a huge fund, you can buy your way to a meeting with Presidents, silicon valley types are puny in comparison. This is a golden opportunity for oil tycoons (tesla and google are going to be demolishing them in the next few years with electric self-driving cars, they better get in the tech game, and so far PG has been most reliable at it).
      - rmc 13y ago
        you can buy your way to a meeting with Presidents, silicon valley types are puny in comparison. Ah, but how do you know who to talk to? What presidents of companies, what SV types?
    - nostrademons 13y ago
      That's basically exactly what Yuri Milner did. He decided that YCombinator did a great job picking startups and mentoring them, and so he would invest $150K into each one that went through the program, effectively freeriding off PG et al's mentorship & decision-making processes while contributing additional capital. It unfortunately seems not to scale, as making $150K available to otherwise equivalent founders made for worse outcomes, and so the program's been scaled down to $80K or so.
- noblethrasher 13y ago
  I thought their 6% stake typically got diluted to much less.

by unono 13y ago

arbuge 13y ago

>> Does anyone know what has been PG's ROI on his investments is, for all we know it could be below industry standard. Hell no. Just do the math: http://ycombinator.com/nums.html http://ycombinator.com/nums.html The total value of YC companies is more like $12B today. That makes their average 6% stake worth around $700m or so. Around 600 companies total, at around $20k each - a total investment of just $12m or so by my calculations. $12m to $700m in <10 years is about as good as it gets in investing.

unono 13y ago
If that's true, then that's astounding. Why isn't some huge wall street fund swooping in to this? Do people not know. The White House should be calling in PG for advice.
- patio11 13y ago
  That's a good question. The main reason is that the hypothetical Huge Wall Street Firm doesn't see a way to reproduce the project at scale. They don't have pg et al, and while YC is applying mass-production techniques to startups, by the standards of markets where APIs exist to conduct transactions they're still in the early industrial revolution. If pg was just a decision engine for Startup#fund(amount), a vaguely specified API which could put hundreds of millions of dollars to work on any given day and which didn't require artisanal mentorship and connection-making of the fledgling startups, you would expect somebody from Wall Street to already have said "We can offer you an arbitrarily high amount of money to do that for us."
  - unono 13y ago
    That's a good point - PG is essentially decision engine. All YC investments are public and some investor could go through and build PG's model using videotapes of all those founders. Collect all this data, put a few data scientists on it, and build a virtual PG. The connections don't matter if you're a huge fund, you can buy your way to a meeting with Presidents, silicon valley types are puny in comparison. This is a golden opportunity for oil tycoons (tesla and google are going to be demolishing them in the next few years with electric self-driving cars, they better get in the tech game, and so far PG has been most reliable at it).
    - rmc 13y ago
      you can buy your way to a meeting with Presidents, silicon valley types are puny in comparison. Ah, but how do you know who to talk to? What presidents of companies, what SV types?
  - nostrademons 13y ago
    That's basically exactly what Yuri Milner did. He decided that YCombinator did a great job picking startups and mentoring them, and so he would invest $150K into each one that went through the program, effectively freeriding off PG et al's mentorship & decision-making processes while contributing additional capital. It unfortunately seems not to scale, as making $150K available to otherwise equivalent founders made for worse outcomes, and so the program's been scaled down to $80K or so.
noblethrasher 13y ago
I thought their 6% stake typically got diluted to much less.