3 ms·

For Y Combinator startups, the average Series A is 5x larger than in 2008

11 points by dmor 12y ago

minimaxir 12y ago
> I also thought it would be interesting to remove the time aspect and simply look at these Series A rounds as a progression of deals, regardless of when they took place. This graph looks at the 10 deal moving average of Series A round size. That's not how moving averages work. You can't just take an unordered univariate and smooth it however you want. You argue in your first chart that time is a relevant factor; therefore, you must smooth as a time series for that analysis to make any sense. (which wouldn't make sense in this case anyways, due to the nonconsistancy in timing of seed funding.) Also, the annotations in the first chart make absolutely no sense since they are not relevant in any way. (unless you are asserting that correlation of these events implies the causation of the increase, which is very bad logic unless you have proof otherwise)
- dmor 12y ago
  My thinking here is that YC would try to get better at helping companies with their Series A with each deal... regardless of what amount of time elapsed between these deals. I think it fits well with the way investors think about the learning process, which is why I tried it out. Regarding annotations in the 1st chart, they are to set context for readers who do not necessarily follow major milestones in the private markets landscape.
  - minimaxir 12y ago
    It's faulty logic, because you can't isolate the impact of YC has the sole contributory variable for the amount of Series A. Otherwise, you're asserting that correlation implies causation. There are many other contributory factors in the raising of a Series A and why the amount has increased over the years, one major one of which is the fact that the US economy has vastly improved since the Great Recession of 2008 and investor confidence has rebounded. (notice the huge dip in the year of 2008) Chart annotations usually indicate events which have a causal, identifiable effect on the data that the user would otherwise question as odd without an explination, which is why adding the annotations only confuses your point.
    - dmor 12y ago
      I didn't assert that.
xiaoma 12y ago
The first graph would have been clearer if the two sets of labels for the vertical axis were the same color as the lines they referred to. As for the trend itself, it's probably due to overall market trends, and the increasing prestige and network effects YC companies receive as the number of them increase.
- dmor 12y ago
  I looked into the market trend question, and it looks like YC Series A is trending up significantly faster than the market as a whole. Graph: https://twitter.com/DanielleMorrill/status/493576080666542080 https://twitter.com/DanielleMorrill/status/49357608066654208...

11 points by dmor 12y ago

> I also thought it would be interesting to remove the time aspect and simply look at these Series A rounds as a progression of deals, regardless of when they took place. This graph looks at the 10 deal moving average of Series A round size. That's not how moving averages work. You can't just take an unordered univariate and smooth it however you want. You argue in your first chart that time is a relevant factor; therefore, you must smooth as a time series for that analysis to make any sense. (which wouldn't make sense in this case anyways, due to the nonconsistancy in timing of seed funding.) Also, the annotations in the first chart make absolutely no sense since they are not relevant in any way. (unless you are asserting that correlation of these events implies the causation of the increase, which is very bad logic unless you have proof otherwise)

dmor 12y ago
My thinking here is that YC would try to get better at helping companies with their Series A with each deal... regardless of what amount of time elapsed between these deals. I think it fits well with the way investors think about the learning process, which is why I tried it out. Regarding annotations in the 1st chart, they are to set context for readers who do not necessarily follow major milestones in the private markets landscape.
- minimaxir 12y ago
  It's faulty logic, because you can't isolate the impact of YC has the sole contributory variable for the amount of Series A. Otherwise, you're asserting that correlation implies causation. There are many other contributory factors in the raising of a Series A and why the amount has increased over the years, one major one of which is the fact that the US economy has vastly improved since the Great Recession of 2008 and investor confidence has rebounded. (notice the huge dip in the year of 2008) Chart annotations usually indicate events which have a causal, identifiable effect on the data that the user would otherwise question as odd without an explination, which is why adding the annotations only confuses your point.
  - dmor 12y ago
    I didn't assert that.

xiaoma 12y ago

The first graph would have been clearer if the two sets of labels for the vertical axis were the same color as the lines they referred to. As for the trend itself, it's probably due to overall market trends, and the increasing prestige and network effects YC companies receive as the number of them increase.

dmor 12y ago
I looked into the market trend question, and it looks like YC Series A is trending up significantly faster than the market as a whole. Graph: https://twitter.com/DanielleMorrill/status/493576080666542080 https://twitter.com/DanielleMorrill/status/49357608066654208...