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Comment by jnevelson | Hacker News Reader

Need to take dilution into account here. If we assume a (optimistic?) 1% stake, that's $650M.

YC recently (1-2 years ago?) started giving 120k. Before that, it was 10-20k. So let's say half of what you said is the total investment = 65M.

That's a 10X return. I actually was expecting higher. Am I missing something in my numbers?

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This is incredibly off in many ways. Someday we will just release our numbers.

Without stating where / how, can you give us an indication of dilution in a "YC Never invests again, company does series A, B & C" scenario?

It is complicated, I am sure, but YC participation in subsequent rounds, but just as a "what to expect as an investor", what dilution would / does one expect?

Sorry about all the FUD around YC's success. I'm curious where all this negative sentiment is coming from. Reminds me of this gem: https://news.ycombinator.com/item?id=35079

Because we expect more from YC. No one doubts that YC has been a hugely positive impact in the startup world. It seems below YC's standard to share selective metrics that might not tell the whole story.

It would be great to see how many jobs YC has created too.

that's probably roughly right. But why did you expect higher? they are generating somewhere around 20-30% IRR. That seems massive in the current low yield low return environment

20-30% irr is not very high given the risk involved. a lower risk portfolio that is leveraged can give you this return quite easily (in a mechanical sense). in that case you have or take a low-risk low return investment and add risk and return by adding say 10x leverage to a 3% return.

In this case, the more relevant number is $$ in and $$ out. and also the optionality to continue the business going forward. That is what seperates the two cases out, and arguably make the one quite distinct from the latter.

A leveraged portfolio is a bad comparison because you could also leverage this portfolio. Let's compare apples to apples. There is no unlevered investment right now that can give you such high returns, that I can think of.

No, its not a bad comparison. Any decent investment vehicle is not putting money out the door unless they are clearing 20% in their base case returns. The point is you expressly RAROC the two portfolios. A retail investor is not going to look at any of this as relevant, so avoiding leverage is pointless. Anyone benchmarking this asset class has access to leverage (and in this market, at low yields).

right. But since I can lever anything, leverage as a factor is irrelevant. I could also lever this portfolio and get 100%. The point is you need to compare apples to apples, not apples to oranges.

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