Jared Heyman writes data-driven analyses of Y Combinator startups, covering returns, batch quality, valuations and the standard deal.
Commenters cite his YC index analysis, noting that the 176% annual return is out of reach for the public, and discuss VC and founder incentives.
Yeah: VC incentives do not match with founders incentives - share classes are just one obvious signal of that. Good article on that conflict: https://siliconhillslawyer.com/2019/02/18/relationships-and-power-startup-ecosystems/
> ~9% where valuable enough for investors to take profit
Or aquihired.
Best analysis I have seen of YC: https://jaredheyman.medium.com/on-the-life-and-death-of-y-combinator-startups-d58aa03421f0
Disappointingly YC hasn't provided any good analysis for founders or employees.
YC doesn't try to align founders and investors incentives - Paul mostly reads like a Venture Capitalist to me (sell founders of their good intentions but don't actually structure incentives to align).
I actually think that YC is a great deal but startups are naturally a frog and scorpion system. It is hard to find better options.
Finding good information is difficult and YC don't help.
A) Very true!
B) peaked* :)
C) Can you think of any tech companies from the last 10 years that were successful? The answer is ultimately "they exist, but the victory condition is to be bought by MANGA, so you don't remember them even if you heard about them in the first place."
EDIT: to add more context, this is a great post: https://jaredheyman.medium.com/on-the-176-annual-return-of-a-yc-startup-index-cf4ba8ebef19 The TL;DR is that Stripe & AirBnB (and to a lesser extent DropBox, DoorDash, and Instacart) were absolutely massive wins that they have yet to (and shouldn't expect to!) replicate; otherwise, they're doing just fine in terms of ROI.
Because statistically it’s going to fail and even if you do make some side income, it’s not going to substitute even for an entry level enterprise dev job.
Also, the time one poster was spending “selling potatoes online” (literally not trying to be funny), he would be better off, spending that time doing interview prep and job hopping making more money.
You can take these numbers for YC investments and draw your own conclusion.
https://jaredheyman.medium.com/on-the-life-and-death-of-y-combinator-startups-d58aa03421f0
Take a look at the second chat at https://jaredheyman.medium.com/on-the-176-annual-return-of-a-yc-startup-index-cf4ba8ebef19. The vast majority of returns for YC are for the companies at the tippy top of that chart (Airbnb, Stripe, Dropbox and a few others).
YC certainly provides a nice package to founders. But they are definitely in the unicorn business.
Public...? Oh, you mean the ones meant to be left holding the bag.
When there's real money to be made investing in YC is off limits to the public: https://jaredheyman.medium.com/on-the-176-annual-return-of-a-yc-startup-index-cf4ba8ebef19
Yea it does! [1].
[1]: https://jaredheyman.medium.com/on-the-176-annual-return-of-a-yc-startup-index-cf4ba8ebef19