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What kind of return is Y Combinator looking at here? Probably more than covers all their investments?

I'm not totally sure, but I think each IPO of a YC company has more than covered all of their expenses since they started.

I doubt that much. There's dilution and they have offices, employees, accountants, etc etc. But certainly they are a very successful fund.

Something like $3bn so I guess so. (Assuming they have 3% and the market cap is 100bn)