Inside Y Combinator

A few things I learned from this article on Silicon Valley’s start-up incubator Y Combinator:

  • If you’re 32, don’t even think about trying to head a start-up. Investors are skeptical of any idea from older people, probably because they have the life experience to run their company how they want to and not how the investors would like.
  • “Among the eight start-ups that graduated Y.C.’s first class, in the summer of 2005, were the social-news site Reddit, recently valued at $400 million; Loopt, a location-tracking application, which at its peak was valued at $500 million; and Infogami, the Web-site builder created by the tech martyr Aaron Swartz, which merged with Reddit. Other Y.C. success stories include Dropbox (file-sharing service, $4 billion), Airbnb (online market for vacation rentals, $1.3 billion) and Stripe (Web-based credit-card-payment software, $500 million). In Y.C.’s first six years, 72 percent of its 249 start-ups raised money after Demo Day. Today the average value of a Y.C.-financed start-up is $22.4 million.” So, Yeah.
  • If you look like Mark Zuckerberg then investors will be more willing to give your company a break by showing you the money.
  • Hard-to-understand foreign accents are a no-go for the start-up’s CEO.
  • How can a company that earns no money be worth a billion dollars? “It’s because of this power law: If a company has a 1 percent chance of being a hundred-billion-dollar company, then it’s worth about a billion dollars […] that’s how this works,” said Paul Buckheit, an investor who was previously known as Google’s 23rd employee (he helped build Gmail and AdSense, yo)

Related: The other side of Silicon Valley

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