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Comment by ShivShankaran | Hacker News Reader

It's actually a bad thing. Just like cryto all the YC companies sell to each other. As per their 2022 stats, more than 50% of sales for all YC startups are other YC companies.

So this is just a game of hot potato until they get a fat valuation, raise a zillion dollar series and then list it on the stock market for the retail traders to hold their bags.

Less YC startups= less customers for other YC startups.

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As someone who was on the outside looking in on this until pretty recently, but also has spent much of the last 10 years working with a variety of different YC companies, this is pretty overblown. Moreover: there are so many YC companies at this point, the rate of increase is not an especially interesting marketing fact. For what you're saying to be true, the norm would have to be selling to your batchmates, which... I mean, batchmates are friendly with each other, but they're not like, your core market, even if you're selling pickaxes and shovels.

Still, I found it staggering that there were 414 companies in the recent batch. When we went through 13 years ago (crazy that it's been that long) we knew pretty much everyone in our batch. It was like 50 people. I had conversations with most of the speakers. A batch of 414 companies (or even 250) sounds like a completely different beast.

We went through S21, which was a large batch (400 or so). While we made great connections with folks in our little corner of the world, we definitely did not make a ton of connections broadly across the batch. In fact, we still meet people who are in our batch and we had no idea. Same for conversations with speakers - just not feasible given the size of the program.

This is something that people fail to understand about economics. The vast majority of wealth is created by the faster movement of money - Japan went into a period of stagflation because savings rates rose in order to cover loan defaults. A yen doing the 5 rounds in a family of three could buy 15 yen worth of goods.

Created by or represented by?

That is true, but consumption is supposed to be part of the loop. If a bunch of B2B companies are paying each other no B2C or C involved it's pointless economic activity and Ponzi-esque

>and then list it on the stock market for the retail traders to hold their bags.

Out of 3,840 startups funded by YC, fifteen have gone public: https://www.ycombinator.com/companies

That's 0.39%, not sure if this is typical but seems pretty low to me. Anything we can learn from this number, or it's simply just a number?

It's widely discussed in the industry. I like the Matt Levine hypothesis titled "Private markets are the new public markets", briefly stated: that for a while there was a lot more money available for private companies than there used to be, thanks to ZIRP and megafunds like Softbank VF, and also more regulations and disclosures imposed on public companies, which on net makes it more attractive to stay private and not go public https://www.bloomberg.com/news/newsletters/2020-08-05/money-...

Very informative, thanks for sharing. I guess one of the assumptions behind this is the overall economy is good so the private companies can raise funding easily without going public. Emm but on a second thought, it shouldn't matter when economy is good as companies can always raise funding easily no matter from private equality or public, vice versa, companies may find challenging to raise money when economy is downturn no matter from private or public. So, maybe what you mentioned are the main reasons.

The cynical would assume firms financials the hyper-efficient public markets would mock prefer to swindle uneducated private investors.

The public markets are fucking stupid. A good company is managed for the next 25 years while a public company has to be managed for the next quarter. This is why private equity investing, including angel investing, beats the socks off of public marketing investing if you know what you're doing (barring access to things like public market manipulation capabilities or insider information)

True. But the money is too good on the public markets

It's been YC's thing for a while now: have startups goose their financials by selling to other portfolio companies to give the appearance of traction.

Bad this quarter. Good over next 5

You don't have to be here, if you think it's all nonsense.

Despite the connection, HN != YCombinator

This thread is literally about Y Combinator.

So we're not allowed to criticize YC on HN?

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