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YC Portfolio Stats

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288 pointsnedwin119 comments

"But we don’t keep statistics on total revenue or jobs created, though I expect both numbers would be impressive."

I find this rather odd, since these numbers actually mean a lot to YCombinator. You even blogged that YCombinator would like to create 1 million jobs recently (http://blog.ycombinator.com/new-rfs-one-million-jobs). How can you know you've reached one of your goals without even tracking the stats? Even though you don't have stats on revenue, do you at least keep track of profits? This seems like quite important/crucial information.

Ps. Don't see this post as a bash - I think what you guys are doing is awesome!

Cheers,

Sam Granger

One plausible explanation... YC needs to be notified when portfolio companies take on new funding, upon which they will receive access to valuation and financing information (eg. so they can exercise any pro rata rights). They don't need to go out of their way to request this information, nor do they need to unduly burden their portfolio.

For job and revenue information, they would need to directly reach out to portfolio companies and ask them to self-report. I'm sure most would... but it's not exactly passive.

We hate asking portfolio companies to do any extra work for us. They notify all previous investors when they raise more money, so we have that information, but for jobs and revenue we'd have to ask them to take time to do something that would be helpful for us and not for them.

(We may start asking for more company performance stats, since fewer and fewer companies have boards and it's valuable for companies to report this frequently. But that'd be because we thought it was in the best interest of the companies, not YC.)

Is the number of employees always one of the first bullet points in board meeting Power Point slide? You could just add them all up.

What board meeting?

> fewer and fewer companies have boards

Yeah, I saw that, I was thinking most of the bigger companies that have taken extra funding and have multiple employees would have a board. I'd say these would have the lion's share of the employee count.

Hey Sam, thanks for your reply. I understand your point of view, but surely, asking them on a yearly basis for example shouldn't take up that much time. At the end of the day, we're talking about figures that any founder should know out the top of their head (maybe not to the dot but at least a rough estimate). I agree that it should benefit the companies too, don't get me wrong. Ps. Please say hi to Lachy next time you see him!

Ps 2. Not sure why this is being downvoted, but whatever!

That's an individual decision, but this is really about a decision-making algorithm. If YC asks founders for revenue numbers in this case, that implicitly endorses the idea of taking up founder time in any other case with higher RoI. That can add up really quickly, and presumably YC doesn't want to set the threshold that low.

For a cult that asks founders to attend weekly dinners I'm sure they can ask for simple statistics once a year that takes 5 minutes.

Hi Sam, I was able to pull some data on these things via Mattermark. http://mattermark.com/yc-portfolio-stats-mattermark-crunches...

267 companies currently have 2 or more employees

8,164 people are currently employed by a YC company [1]

121 companies have disclosed an exit (no IPOs, all acquisitions so far)

66% of YC companies are based in the Bay Area, followed by New York (7%) and Boston (2%)

76 un-exited companies have raised a venture round of funding (Series A or beyond)

There is a nearly 50/50 split between B2B and B2C startups in the portfolio

The average Series A stage YC company has 26 employees and has raised $10.2M of funding in its lifetime.

[1] The total number is probably much higher, many of these companies do not have LinkedIn pages or employees on LinkedIn, Crunchbase, news, and other sources until they are further along. I think an estimate of 9,000 to 10,000 current jobs created by current YC companies is reasonable.

YC's goal is to help startups take first baby steps and raise money on a larger scale.

So most important stat is what % of companies do that. Based on your data it seems (76 + XYZ) out of 716 where XYZ is companies out of 121 exits who raised more money prior to exit.

It'd be interesting to know based on cohort (batch) analysis if YC is getting better in achieving its goal or not.

It'd also be interesting to know where YC stands on this compared to other comparable accelerators/incubators.

> YC's goal is to help startups take first baby steps and raise money on a larger scale.

I thought YC companies have moved up in maturity over the years. More specifically, I thought current YC batches have more companies that have built product, found early product/market fit and are now ready to grow.

While phrased as a statement, the above is more of a question, since I don't know the answer.

That said, "and raise money on a larger scale" is still probably spot on and hasn't change much over the years.

> "YC's goal is to help startups ... raise money on a larger scale."

I don't think this is YC's goal. I recall comments from pg to the effect that if all the companies raised money on demo day, then maybe YC wasn't selecting properly (for the risky, out-there, stuff).

Quote from the about page (http://www.ycombinator.com/about/) ...

"At Y Combinator, our goal is to get you through the first phase. This usually means: get you to the point where you’ve built something impressive enough to raise money on a larger scale. Then we can introduce you to later stage investors—or occasionally even acquirers."

I stand corrected, thank you.

What I was trying to get at above was that if "% of companies funded" post demo-day is a metric YC wants to maximise, then it would be trivial for them to get to near 100% by only selecting the obviously investable propositions 3 months earlier. If they did this, they'd simply be following whatever fad that VCs happen to be chasing and might miss outliers (even PG tried to convince the Airbnb founders to try something else).

This isn't quite right, those 76 are the ones that have not yet exited. Many of the exited companies also raised money and were not included in that particular stat.

I did some cohort analysis comparing YC, 500, and Techstars over a year ago. Probably time for another one: http://mattermark.com/startup-index-y-combinator-companies-h...

"we'd have to ask them to take time to do something that would be helpful for us and not for them."

I see it as what is good for you is good for them.

Knowing jobs allows you to influence policy because info like that is often used by politicians as a reason for agreeing with a particular position. Also a politician that is impressed with YC (for whatever reason "hey they create jobs") would be more likely to help a YC company (or YC) the same way a politician would take note and help anything that he personally has experience with. So keeping up the YC brand is important. [1]

I'm also not clear on exactly (with respect to jobs for example) how much work is involved in supplying that information. (Obv. someone at YC has to keep track of it of course which is work but it certainly seems worthwhile to do.)

[1] For example say I am contacted by YC for something that I do. Don't you think because I know who you are I am going to take notice and possibly be a bit more helpful than if I got a call from an incubator that I had never heard of?

You could get away with a voluntary Wufoo survey limited to 5- 10 questions. Our company would have time for that (2-3 minutes?)

I was just wondering last night when YC was going to build a free Mint-like money tracking app for portfolio companies that had the secondary effect of reporting back how they were doing financially. That way there'd be no bothersome reporting obligations for founders beyond checking a box to let YC pull reports or get read-only access.

Why should YC have access to this info and not other investors (who've arguably put more money in)? Reporting cycles allow you present more context, whereas real-time feeds would lead to knee-jerk reactions.

>Do you at least keep track of profits? This seems like quite important/crucial information.

I'd be surprised if many of the YC companies actually turn a profit. I imagine that YC's work has long since been done when a company finally starts making money.

I say this non-facetiously: any startup that looks like it might be hitting 1,000,000 jobs will be quite visible to YC as a good candidate to hit that number. They don't need to know how many jobs are created by most of their companies because it doesn't matter.

Also, once YC funds a company, they don't care what goal the company originally planned to hit during interviews.

Only a select few of the largest companies in the world employ 1,000,000+ people. The chance that a startup company will displace an international conglomerate like Walmart (most of whom's employees work for very low wages) is nil.

Walmart was a startup once. Starting a company to take on an entrenched giant is not rational. But I don't know what else I would do. It's right for me to take on Thomson Reuters and LexisNexis. Probably not for everyone.

Creating jobs doesn't necessarily mean employing people. A marketplace could create jobs by facilitating freelancer/client relationships which were otherwise impossible or unlikely to happen.

The criteria on the YC website specifically says they aren't talking about employing 1,000,000 people. They are talking about creating new things for people to do to earn a living.

While those are definitely interesting numbers, it's important to understand that for rapidly growing companies, jobs and revenue are typically trailing indicators of success, while valuation is more of a leading indicator (though obviously not 100% reliable). For example, Google and Facebook both had high valuations long before they had high revenue or head count.

Note the power-law distribution; Airbnb and Dropbox are ~2/3rds of the entire portfolio.

And at least 80% of the portfolio value comes from 23 companies - about 3% of companies funded.

That's the nature of startups. Most don't succeed. I don't think YC would make a claim that they are some automatic path to success, just that they help good ideas to get there

Although having a 3% (or greater based on what happens in the future) shot at your startup becoming worth $100M has got to be significantly better than the odds of any other startup reaching a $100M valuation.

Note that's 3% of the startups that get into YC... which has a 3% acceptance rate.

Looks like they'll get a 4th billion dollar company with machine zone if this round closes: http://blogs.wsj.com/digits/2014/07/16/newest-hit-game-maker...

Wow. If that round closes, they'll have a bigger market cap than Zynga (currently only $2.7B).

Funding valuation != Market Cap

Actually, they're the same thing: both are computed as (number of shares outstanding) * (price per share).

The difference is that market cap is used for companies that have IPO'd (and therefore have a broad market for their shares with continuous price adjustments) versus companies that have raised money through private markets (and therefore have infrequent price adjustments).

One can reasonably argue that valuations are less precise than market caps as a result, but both are dictated by sophisticated investors and should be more or less correct on average.

(In fact, valuations are less precise, but this has a lot more to do with the amount of uncertainty inherent in any early-stage company than it does with the availability of shares on a public market; Wall St. has its ups and downs just like Silicon Valley.)

Actually, they're the same thing: both are computed as (number of shares outstanding) (price per share).*

No, they are not the same thing. They are calculated the same way, but Market in the phrase Market Cap means "public (share) markets".

market cap is used for companies that have IPO'd [(] and therefore have a broad market for their shares with continuous price adjustments

A pretty important distinction! If a share is "valued" at a price but there are no buyers then the valuation isn't shared by many others.

To be clear: I understand that the math is the same, but a market cap shows the consensus view of the market, while a funding valuation only shows the value a small set of investors put on a company.

"Number of nuclear energy companies in the current batch: 2"

Awesome. I can't seem to find these two companies yet - have they announced or still under the rader?

That is awesome.

Have there been any aviation/aerospace companies yet?

Yep.

FireFly is a new space company in the micro-launch space. Not a YC company (to my knowledge) but they seem like a cool start up. They have some SpaceX talent on the team. They had an announcement of their new vehicle on their site but maybe they have gone into stealth mode because I cant find it right now.

"it generally takes companies a few years to get above [$100 million valuation]"

Sama, dropping knowledge...

Not clinkle. They didn't even need a prototype...

Or a CEO who can run a lemonade stand.

the idea of a nuclear energy startup is slightly frightening. v. interested to see what they're working on.

Very impressive.

I'd love to know how many out of the 716 companies funded so far are still in business per se as independent entities? And among those that are not anymore, what was the exit (successful exit vs. soft landing / acquihire vs. death). I suspect it's really hard to track though, and somewhat subjective.

It wouldn't be too difficult to pay someone a minimal amount to maintain a very detailed spreadsheet of every company that passes through YCombinator and record every stat they can find (and attempt to track how that changes over time). Some columns could be deleted if they are determined to not provide value obviously.

This might allow some interesting patterns to help filter future companies and let them know where the money is best allocated. Optimizing return on investment seems like it would be the most important part of YCombinator, then again I'm not a venture capitalist (but would love to be one some day).

I'm sure this is done somewhat at every incubator / startup investment group but it might be determined to be too valuable to release publicly, but at least a list of companies would be appreciated (all companies, not just the wildly successful ones).

Some possible stats off of the top of my head (per company):

- industry, location, target market

- founder's specialties (marketing, financial, developers). in-house developer or outside contractors. age of founders, university attended

- expected revenue after 1 year, 2 years, 5 years. actual revenue after those times

- number of users, number of paying customers, average revenue per customer. time from conception to first sale

Some of this might be information that they don't want to share, but if willing it would be wonderful to see. Just every data point possible that might offer some kind of correlation between extreme success / moderate success / failure.

Like http://yclist.com/ ?

Looks fairly up to date, but I'm not sure how accurate it is.

I recall seeing a spreadsheet that included other similar programs but I can't find it right now.

Yep, that's certainly a start. It doesn't really show the difference in success between companies like Reddit, Stripe, Loopt, and TextPayMe.

I think you're thinking of http://www.seed-db.com/

YCList is definitely not up to date. There are at least three companies that I know are dead (because I invested in them) that are not listed as dead. And there are almost certainly a lot more because I only looked at my portfolio.

http://ycpages.info/

http://ycuniverse.com/

Ohhh, very nice, it looks like that data does exist publicly.

I'm imagining a more consolidated view with filtering / sorting, I might work on building that in the next week or two if I have some free time and see if it's useful to anyone.

http://www.seed-db.com collects stats for YC and every other accelerator, too... the companies they've funded, who's invested for how much and when, etc.

The frontpage (http://www.ycombinator.com) now has a quote from Satya Nadella:

“It’s fantastic to see the work Y Combinator is doing to foster innovation and entrepreneurship in the startup community and Hacker News is one of my favorite sources of pointers to hackers and their hacks!”

What's his user name?

Did anyone else notice that Satya has quite a habit of using run-on sentences? I also thought this while reading his letter to employees.

It seems to be a fairly common occurrence in Indians who learned English as a second language (and I would guess other ethnic groups as well).

Satya has been in the US for quite a while though. For a C-level exec of such a prominent company you would think an editor could help or maybe it's something he could work on personally. I tried to chalk it up to "personal style" but it's really egregious. Might be a bit beyond what can qualify as "style" and more towards the "grammatically incorrect" side of the spectrum.

Bike shedding!

For any engineer/dev eloquent communication skills don't matter that much... but for a CEO they matter quite a bit!

Describing programming details seems to encourage complicated run on sentences in my experience.

Is that possibly the culture at Microsoft? I knew a guy who moved from Intel to Microsoft and I noticed his speech tended to more verbosity after the move.

No, it's definitely not. Some execs tend to ramble, but they don't use run-on sentences. Some of Microsoft's other execs are actually pretty staccato (Kevin Turner).

I'm not saying he doesn't have a user name but a user name is not required to read HN and click on the links.

The most impressive 'stat' about these stats is how little most of the startups were when they were accepted into YC. And the average goes on to raise ~$40M(taken from a existing comment on this thread). Take Airbnb as an example...probably no VC, and hardly any angels, would have ever invested in them at the stage YC did.

I wonder why they don't keep statistics on jobs created o rev generated, will be interesting to see quantifiable impact created by the YC community.

I also was surprised (not shocked) to see that data missing. Not shocked because those in the "VC business" usually don't care so much, as long as the get a return on their investment, which could be accomplished without any meaningful revenue.

I'd be interested in this. I bet it is much smaller than any of us anticipate. I'd estimate <5000 jobs total as a high water mark.

That would be only 7 employees per company on average. I'm sure there are a lot that never got past the 1-2 range but there are also Dropbox and AirBnb on the other end. Those two combined have around 2,000 employees according to Crunchbase.

In the FCC statement Alexis (YC Partner) mentioned 3,000 new jobs.

To put this in perspective, SalesForce employs ~12,000 (4x that) and has roughly the same market cap ($30b).

IMO, if I were YC I wouldn't be touting this number (nor am I indicating that they do currently). What's probably more important is how many new markets have been created, and therefore jobs, due to YC companies. A number which will be extremely difficult to measure unbiasly. Otherwise, this simply reinforces the notion that software is eating the world and developers are paid too much.

That was something that stood out for me in Alexis' statement. At a $30 billion market cap, that's $10m per employee. I think that number alone is enough to indicate that YC isn't creating jobs as much as it is deriving value from software killing jobs. (They'd phrase it better, but any software making things easier, faster, etc will require less brainpower/ employees.) The counter to this is either talk about the bubble making all valuations ridiculous, or that these companies are currently pretty small; If they grow to create or lead new industries, jobs will likely be created, and market-cap-per-employee numbers fall.

When going through YC, it was incredible how respectful the program was with founders' time.

This happens during YC (no pointless meetings) and afterwards (no burdensome data reporting requirements).

I'd be interested to see the stats on valuations of companies that applied to YC but were rejected.

The three companies worth over a billion dollars being: Dropbox, Airbnb and.. I can't seem to remember the third one. Reddit?

Stripe

Stripe, I believe.

Edit: Here's an article when they hit a $1.75B valuation: http://techcrunch.com/2014/01/22/with-an-eye-to-internationa...

Last I heard (early 2013), Reddit was valued at 400-500 million. I can't imagine it's gotten much more than that.

reddit sold for no more than $20M according to https://news.ycombinator.com/item?id=4530030

Ouch!

We'll see who's worth what when they hit the public market :)

I would be really curious to know what the median outcome is for YC companies and their founders.

Average is about a 40M valuation. (Yeah, I know that's not exactly what you asked about.)

I would bet that the median outcome is failure. Even within an impressive group, you're not going to escape the basic power law dynamics in starting companies.

I mean, did the median founders have a good experience overall?

What is the distribution of personal satisfaction amongst founders? (Is that a power law too where nearly everybody is miserable and wishes they stayed in school, but the billionaires are so happy that it averages out? :-))

From random anecdotal observations, the median outcome is that the startup fails and the founding team splits up to do other things. These things are the typical things that intelligent high-achievers do - engineers at other tech companies, PMs, biz dev. I see a disproportionate number working on their own ideas or joining other YC startups that are doing well.

> Total market cap of all YC companies

The word "market" seems pretty strange here. Are there any YC companies with a "market" valuation?

Yes - VC investment is a private market, but a market nonetheless.

I assume it is a combination of acquisition price or last VC valuation, or market cap of IPO'd companies (which I don't think there are any). It is a useful number, but calling it "market cap" seems strange to me.

Any company which has sold equity, whether on the private or public markets, has a "market" valuation based on the per-share price. Private companies may also get a market valuation with a 409A valuation, but those are typically kept as low as legally justifiable for stock option attractiveness.

Perhaps, but it is a market valuation for preferred stock, not for common stock, a distinction when market valuation generally refers to the latter. Ie, companies doing a round at a $1B valuation aren't implicitly worth a billion$ - the liquidity preference affects it.

I'd like to see some stats on the companies that failed after YC. How far did they get? Why did they fail? (e.g. failed to raise VS team exploded VS killed by competitor).

This sort of info would be valuable to first-time founders, as they're the sorts of hazards you only typically learn to navigate by experiencing them first hand.

Lots of success stories there with a 10x of investment and many jobs and fortunes made. But also interesting to see just how hard it is to succeed big with 20 of 716 (2.8%) making it to $100M valuation so far even among this every elite set of entrepreneurs given only 3% of the current batch's applicants were accepted.

So conservatively, by market cap it looks like YC is doing 10X on their investment, which is very impressive.

And this is conservatively, since the 3 billion in funding has already been handed out, but some of the companies that have received that funding haven't had a chance to grow and become valuable.

that's how much the companies have raised in total, not from us--we invest usually between 15-20k per company.

and of course, investors only own a percentage of the companies, not nearly 100%.

Way better return than that. Assuming they've invested $20k in each company so far (and not including current batch with the new investments but that's fair as there is no return from that) then they've invested $14MM or so for 6% of founders common stock. All that really matters is their ownership of the biggest companies, which will have raised a lot of money, but lets assume they got diluted 2/3rds and own 2% of airbnb/dropbox (I have little feel for how accurate that assumption is). Then the portfolio is worth about $600MM. That's an astonishing 40x return, and it's probably way better than that as we aren't seeing the full returns yet especially from the recent batches (a fairer analysis might be to only include companies 5 years old or something). The analysis I'd really like to see is a cohort analysis showing mean valuation by batch over time, but this might be misleading due to changing market conditions.

I think an even better idea would be yclist.com or total YC websites calculated along with alexa ranking. That would give a great indication of who has been successful or not. Keep in mind YC also gets also significant press than normal startups so its expected that most should do ok at least.

How do you keep track of how much the companies raise after leaving YC?

That sort of data usually makes it into CrunchBase eventually...

Crunchbase isn't the most reliable, so I was wondering if they surveyed their companies, etc.

As a past investor in all of the companies, I assume they would be informed about the future rounds and updated cap tables.

You fund <3% of applicants. Surely this means you are passing up a lot of potential positive value. Just curious, what's the limiting factor for YC in scaling to more companies?

Applications continue to grow. So while percentage drops, # sponsored (was/is?) growing.

There are certainly tangible hurdles to scaling. Namely, number of partners. Quality support, advice is hard to do with a 100:1 ratio. Much better at 10:1. There's also physical space, but as we see, YC is opening up more space so that will scale slowly. But as these companies mature and maybe become partners themselves, that will scale too.

Does YC own aprox. 5-7% of the $30B marketcap? Or is there dilution?

There's definitely dilution. YC gets common (aka founders) shares for their initial 5-7%, so they get diluted just like founders do.

  Number of companies funded by YC so far: 716

Can you share how many are outright dead and how many are working, more or less, on the same idea that they started with?

Another commenter posted this link: http://yclist.com/

According to it, 46 companies are "dead", 52 are "exited" and 445 are "active".

yclist has a few errors, so not sure if it's all 100% accurate.

To name a few: xobni - bought by yahoo and now shut down (listed as active) like.fm - dead, but listed as active Exec - listed as active, but was bought by Handybook Bump - listed active, but dead

Can you include a stat about (order of magnitude?) jobs created?

Market cap usually only refers to publicly traded companies... Does that apply here?

Power law. I wonder what companies make up 80% of these numbers.

Dropbox, AirBnB, and Stripe are the companies that have publicly achieved valuations of >$1Billion; those three alone likely drive 80%+ of the numbers.

"Total market cap of all YC companies: >$30 billion"

According to who?

All vanity stats. Where are the revenue and profit figures?

Number of YC companies Steve Jobs has worked at, so far: 0

> But we don’t keep statistics on total revenue

Ahhh, yet another reminder as to what matters and what doesn't in the game of VC.

or for that matter - profits or earnings.

It's important to criticize venture capital for the right reasons. VCs correctly care about value, not revenue or profit, but by itself this isn't a problem because the few most valuable companies typically dominate the returns, and they are virtually always insanely profitable in the long run. VCs thus don't deserve derision for not caring about revenue or profit in the short term.

On the other hand, because only the top few companies matter to a VC's returns, the VC's incentives are not always well-aligned with the interests of the founders. This is because VCs can invest in a large number of companies and thus realize the expected value of their investments (due to the law of large numbers [2]). Founders, on the other hand, even if they are insanely prolific, can probably only start a handful of companies in a lifetime, and are thus exposed to a much higher variance in outcomes.

For example, if the founders have a choice between a 50% chance of making a $50m company (expected value $25m) and a 1% chance of making a $10b company (expected value $100m), VCs have a strong incentive to push for the latter, even though most founders would prefer the former. This mismatch of incentives, not a lack of focus on revenue or profit, is the real problem with VC (at least from a founder's point of view).

[1]: https://en.wikipedia.org/wiki/Net_present_value

[2]: https://en.wikipedia.org/wiki/Law_of_large_numbers

VCs actually have a solution to this incentive mismatch: when you ask a not-yet-wealthy founder to swing for the fences (which typically happens during an investment round) you invite them to take some of the investment money out of the company and into their personal accounts.

How could YC possibly keep statistics on revenue for the entire portfolio?

Sam isn't saying "we don't care about revenue", he's saying "we don't have any way to keep statistics on the total revenue of all portfolio companies". Those are very very different statements.

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