Ask YC/PG: Quantitative success of YC so far? | Hacker News Reader

Ask YC/PG: Quantitative success of YC so far?

27 pointsryanwaggoner10 comments

The story on Fool.com about YC being a force to be reckoned with got me thinking about whether the data backs that up. I'm not disagreeing, just curious. YC has funded a lot of startups and it would be interesting to know roughly what percentage have failed, become profitable, exited, etc. How does this compare to other venture portfolios? If it's still too early to tell, at what point will you have enough data to know if you're earning an acceptable return?

Perhaps this data is already available somewhere?

PS - One of the things about the article that bugged me is that they seemed to equate $$ raised with success. That's not really what I'm looking for.

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Obviously PG knows better than me, but I think it's still too early to tell given that most funding cycles are 7-10 years.

Yes. We have no idea yet what the returns might be. Quite a lot of the startups we've invested in are doing well, but I've never even tried to estimate what our shares in them are worth.

We'll start to have some idea how we're doing financially in around 2012. I feel optimistic we'll make money, but I never think about it. I just focus on the individual startups.

I surprised you aren't using any monetary metrics to quantitatively track investments. Wouldn't that be a good corrective tool to feed back into the criteria you use to judge potential investments?

Or do you get enough qualitative information to integrate into better judgment and intuition about startups?

So if you are attracting investors, why do they trust you? Or rather how to you measure success?

At Startup School in April 2008, PG cited a '50% success rate.' The full video of his talk is located here: http://omnisio.com/startupschool08/paul-graham-at-startup-sc...

What exactly constitutes 'success' tho?

He defined it during that talk as, "the founders are now 'rich', by some definition of 'rich'". Meaning, I think, that 50% of those folks, once vested in their respective acquiring companies, wouldn't actually have to work if they didn't want to.

Note, though, that the first batch was an outlier. No other batch has produced that many exits that fast. One could easily argue that ambition and dedication to being in it for the long haul is higher amongst more recent founders, however, and a low digit millions acquisition isn't as attractive.

$$ raised is a success in a way. I'm sure most people think Facebook has succeeded, but they're a long ways off from paying back their investors.

Facebook is the 5th most populous country in the world. That's more of where its "common knowledge success" comes from given where it is now, as opposed to venture raised.

Reference: http://en.wikipedia.org/wiki/List_of_countries_by_population

I think it's worth asking those that have went through the program as well. Lessons learned go way beyond "$$".

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